NPS for growth
What is Net Promoter Score® and Why it is Important for Growth
Net Promoter Score®, or NPS® for short, is a metric system used to measure customer involvement, satisfaction, and experience.
It is important for growth because it can be used to predict business growth with only one question: How likely are you to recommend us to a friend or colleague?”. This is a proven sole metric demonstrating the ability of the company to grow. NPS is a holistic metric, measuring all aspects of user experience (but also perception).
NPS is both holistic and technical meaning that you need to understand all aspects of the business, all touchpoints with customers, and then to change them. Understanding alone is also technical as the NPS score is been asked in Websites, IVR systems, Mobile apps, chatbots, email campaigns, even physical by pressing buttons.
The NPS Calculation
Calculate your NPS using the answer to a key question, using a 0-10 scale: How likely is it that you would recommend [brand] to a friend or colleague?
Respondents are grouped as follows:
- Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others, fueling growth.
- Passives (score 7-8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
- Detractors (score 0-6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.
The clients of each category or segment have particular characteristics. Detractors are essentially disgruntled clients who are dissatisfied with your brand in general and are unlikely to use your services again.
The NPS is calculated by subtracting the Detractors from the percentage of Promoters. It ranges from -100 in the worst-case scenario (everyone gave a 0), to a +100 in best case (everyone gave a 10). Generally, NPS of 40 and above is considered as a benchmark for high-performing brands with strong customer loyalty.
Find out your NPS.
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Your NPS score predicts your company’s growth. Why?
1. It evaluates client loyalty.
Customer NPS aids businesses in assessing client loyalty and the possibility that they will refer business to a friend. It also aids in determining the possibility that customers may “churn,” discontinue their subscription or refrain from making a subsequent purchase in favor of buying goods or services from a different business.
Even if you want to draw in and convert new clients, there is a larger return on investment in keeping and empowering your current ones. It goes without saying that a crucial part of making this happen is recognizing customers who are at risk of leaving, and tracking customer NPS over time aids businesses in doing just that.
Companies can determine how probable it is that the typical customer will refer you to a friend by monitoring changes in the general NPS. Customer success teams may also tell what way the entire NPS is heading by observing changes in the ratio of promoters, passives, and detractors.
For instance, it may indicate a good trend in consumer opinion if the proportion of detractors falls and the proportion of passives rises. On the other hand, a decline in promoters and a rise in passives can point to a risk of customer turnover and unfavorable evaluations.
Changes in the customer NPS may be a helpful indicator of the current level of customer satisfaction and the likelihood of churn.
2. It points out areas for improvement.
Customers may provide a low score, or even a 0, in response to the NPS question. When that occurs, especially when it does it repeatedly, it can be difficult, but it also offers a chance to focus on consumer input and make product or service improvements as a result.
We advise an NPS survey that includes additional opportunity for customers to provide detailed feedback on why they gave the score they did. By doing so, you may assess the quality of consumer feedback from people who might be able to point out particular modifications you could make to enhance their experience with your good or service.
Sure, not all comments will be beneficial — there will always be trolls on the internet — but specific notes about bugs, poor user experience (UX), or a bad contact with a customer success manager may be promptly forwarded to the right team to address.
3. It strengthens affiliate marketing.
Customer NPS helps businesses determine how probable it is that they will receive positive customer recommendations, which are known to be quite influential.Asking for client case studies, testimonials, and online reviews can help businesses leverage the power of referral marketing to attract new consumers. Additionally, brand ambassador and incentive programs may offer gift cards, gear, or special deals as a way to acknowledge and appreciate a customer’s devotion.
NPS data can help you find those satisfied customers. Referral marketing can be a mutually beneficial relationship between brands and their customers, but you need to make sure your current customers are happy first.
4. It helps you prioritize reaching out to detractors.
Detractors are those NPS survey participants who gave your product or service a score between 0 and 6, which suggests that they are unlikely to promote it to others. And just as putting money into your supporters can pay off for the expansion of your business, so too is concentrating on your detractors crucial.
When you obtain the NPS findings, categorize the replies into three groups and examine the rationale behind the respondents’ choices. It’s crucial to stay in touch with your esteemed clients, but it’s especially crucial if they mention a problem or issue they’re having with your goods or services.
If you follow up with critics, you can help them feel heard and valued and may even reduce their likelihood of leaving you or, worse yet, recommend that others not buy from you. It might be a case of misunderstanding or user error, or it might be a larger-scale complaint that you alone can’t resolve.
What's a good Net Promoter Score
Depending on the sector and environment, a positive Net Promoter Score (NPS) can vary. However, any positive NPS score can be regarded as favorable as a general rule of thumb. Scores above 0 show that there are more supporters (customers who are eager to suggest) than opponents (dissatisfied consumers).
Here are some NPS score standards for various industries
- Authentic Retail Locations: NPS scores for businesses similar to Nordstrom are frequently very high, with an average of about 75. This suggests a substantial consumer base with a high propensity to recommend the brand.
- E-commerce Giants: Companies with NPS scores of approximately 70 typically include Apple and Amazon. Their outstanding ratings are a result of their emphasis on providing exceptional customer service. A respectable NPS score in these sectors, such as mobile operators or cable television, is normally around 0. This indicates that there is potential for improvement in customer satisfaction because the proportion of supporters and detractors is fairly balanced.
- Political Context: NPS ratings in the political sphere are frequently low. A “good” NPS score in this situation would still be a negative score, but ideally as high as feasible within the negative range, even though it might not reflect favorably.
Let’ s talk numbers…
Based on the global NPS standards, any score above 0 would be considered “good” (50 and above being excellent while 70 and above is considered “world class”). Simply put, any positive score means that you have more promoters (advocates willing to recommend you) than detractors (unhappy customers and potential negative word-of-mouth).
Now, depending on the industries, you can find different benchmarks for NPS:
- Physical Store such as: Nordstrom have an average of 75
- Brands like amazon and apple have an average of 70
- Mobile operators or cable TV – A good NPS score is around 0
- In the world of politics, a “good” NPS score, as unfortunate as it may be, is still negative.
When and where to measure NPS
The NPS can be measured in various marketing channels:
- An email survey
- An SMS survey
- On chatbots
- On IVRs (call centers)
- After completing a transaction (order, top-up, recharge, renewal)
- When visiting the website
- When searching for FAQs or answers
- On messenger bots
One or multiple NPS scores?
In the company, you may have multiple NPS based on the segment or the campaign or the touchpoint. After talking to an agent, to the call-center, to the chatbot, searching on FAQs, upgrading a service, rolling-in, signing-up, ordering may lead to different NPS. Besides NPS you may have other metrics such as stars, thumbs-ups, claps, upvotes, or various ways to collect customer feedback (Retention of the customer also signifies satisfaction). That feedback should be analyzed from specialized consultants, apply statistical formulas on them, combine with the paths leading to the feedback and predict the NPS you will get when the survey will be sent out! NPS should not be a surprise for the company.
What is affecting NPS?
NPS is been affected by many elements and parameters. A good NPS is always a balance between customer’s happiness and ROHC (Return on Happy Customers). For example, offering a very cheap service will result to a very high NPS score (assuming you will ask for the NPS at the time of completion) but in any case, it’s not a sustainable model. It’s rather a manipulative one. Another example is an IVR Service. If all calls will be delivered to live agents will lead to higher satisfaction but also to higher costs thus the effort should be in serving customers in an automated manner (NLU, chatbot), but making sure that customers will get the answers or services they ask for without waiting on the queue or having to talk with someone.
What an NPS project includes?
An NPS project includes various stages:
Auditing of current situation.
During this stage our consultants will work with the various stakeholders getting answers to various questions such as:
- What’s the NPS score of the brand?
- What’s the change of the score over year or months?
- What’s the percentage of participation vs. total addressable audience?
- Does the brand has one NPS or multiple NPS score for specific channels?
- What’s the happy path of the customer
- How the brand treats detractors and how promoters?
Measurements (Statistics)
Measurements on collected and normalized individual metrics, where we try to predict the NPS score before hitting the crowd
Suggestions for improvement
That includes all channels and touchpoints. Specialized consultants may have to further analyze NPS because there are many cases that we may not be sure where the NPS score is been derived. Thus, the company has to implement more metric-related touchpoints, change the follow-up sequences, change tone of voice, or implementing breakthrough innovations to handle it.
NPS Services by GrowthGirls
Let’s discuss on the skillset of a growth hacking team:
- they are familiar with UX (VUI (for voice) or GUI (for digital)),
- they are familiar with digital marketing tactics and ways to approach a customer via various communication channels
- they are familiar with experimentation which is very important when we try to propose improvements to control groups with minimum impact
- they are familiar with data science (R, scripts, spreadsheets, python) that is used to analyze, compose and consolidate various metrics trying to predict NPS
- they are familiar with touchpoints (building, correcting, or integrating them) with various systems
As per above, it is pretty obvious that a growth hacker is your ideal NPS consultant
