Net Promoter Score is a popular metric for organisations wanting a simple but meaningful measure for their success.
Based on customer feedback to a single scale question, NPS is a customer loyalty metric asking to what extent a customer would recommend your organisation to friends, relatives, colleagues.
Responses are rated on a scale from 0 (not at all likely) to 10 (extremely likely). The score defines customers into three categories:
Promoters: Loyal enthusiasts who keep buying from your organisation and encourage their friends to do so too.
Passives: Satisfied but unenthusiastic customers who can be easily wooed by the competition.
Detractors: Unhappy customers trapped in a bad relationship.
Your official NPS score is the percentage of promoters minus the percentage of detractors. This can change over time and give you and your team a KPI to measure and monitor over time, tracking improvements.
How is it useful?
Good NPS scores correlate to customer loyalty and can be used as a predictor of business growth. When your company’s NPS is high (or, at least, higher than the industry average), you know that you have a healthy relationship with customers who are likely to act as evangelists for the brand, fuel word of mouth, and generate a positive growth cycle.
Conversely, if your score is low or in decline, this indicates trouble ahead.
Understanding what customers do and don’t like about your organisation provides you the opportunity to improve; targeting limited resources at specific improvements with the overall aim of increasing your number of Promoters and decreasing (ideally eliminating) Detractors.
Other questions in your survey template will help target improvements by offering greater detail around the areas of dissatisfaction, giving you practical pointers for where to make changes that will matter to your customers.