What is NPS® & Why it Matters
Any business needs an evaluation of their services and products, so they can keep growing and improving. That’s when you can use a Net Promoter Score® to check your business performance and how it is perceived by customers.
Created by Frederick Reichheld, the NPS is a management system to measure customer satisfaction. It is widely used by businesses everywhere, and you can even compare your business performance with others in the same industry.
Getting to know how your customers feel about your business is key data on the pursuit of a high-quality and well-known brand.
But, what exactly is an NPS? How can you capture such data? And how can you use it to grow your business? These are the answers you’ll find in this article.
Spoiler alert: MightyForms has the perfect feature to help you calculate your NPS. Keep reading to learn more.
What is the NPS score
Net Promoter Score, or just NPS, is a metric businesses use to understand and learn about customer experience with their product/service and brand, and it also helps with growth prediction and to anticipate the audience needs, so businesses can provide a solution with the product/service offered.
When you add an NPS question to your survey you can discover the loyalty of your customers and clients to your brand.
Usually, this score is made with a single question, with points to measure people’s answers.
An example of an NPS can be:
You attribute values to each answer option so you can measure and calculate your brand score.
0-6: Detractors - when your brand receives such a score, it means it needs a lot of improvement. And that customers are hardly coming back to do business with you again.
7-8: Passives - this score tells you you can still get better and that your customers have a chance to replace you by competitors.
9-10: Promoters - this score means that people not only will come back to do business with you, but they also will tell about your brand to others, becoming ambassadors for your brand.
Why does it matter to the bottom line?
NPS is a performance indicator that helps you measure your business performance. With such indicators in hand, you can anticipate and determine what your next actions should be in order to improve your product, service, and brand awareness, all with customer experience in mind.
Define business objectives and goals by using the scores and measuring your business performance. Once you have all the data from an NPS survey, you can increase the brand satisfaction rate. Consequently, with the score results, you can have a trustworthy indicator of possibilities for business growth.
To the bottom line, an NPS survey is important to your business because it says how your brand and product are perceived and your chances to conquer ambassadors for your brand. And all that lets you know how much you still need to improve, making your business every day better.
One more reason is for the customer experience. Listening to your customer is vital for your business growth, and also for your customer satisfaction indicators. Are your customers happy? The NPS not only will tell you that but also how happy they are. And companies that keep their focus on their customers are 60% more profitable than those that are not customer-centric. One good reason to keep an eye on your score results and improve them.
What are the advantages of using NPS?
One big advantage was already mentioned - the help an NPS survey gives to business growth. But we are going to explain this better now. Another advantage is that this type of survey will tell you how customers evaluate your business performance giving you the opportunity to improve your customer experience and satisfaction.
Customer Satisfaction rate
Get to know your customer loyalty rate by evaluating their satisfaction with your product and service offers. With this score, you can learn your weaknesses and strengths, improving your user experience, consequently improving how your customers feel about doing business with you. You can then create loyalty. And a loyal customer is five times more likely to purchase again.
Once you improve your customer experience and learn more from your customers using the score, you can also predict your business growth, or at least estimate it. All because loyal clients are more likely to refer your business to friends and relatives, becoming real ambassadors for your brand.
And what are the NPS disadvantages?
There is one disadvantage to the score performance: You need more information to improve your business. Let me explain. An NPS alone will not tell you what is wrong with your product/service in the case of a low score, nor tell you why your business is worth a high score. You need to ask the respondent more questions, or at least ask for them to leave a comment on their score.
You can use a survey to have your product and website evaluated, or a customer experience form, just to mention a few examples. The important thing is to complement your research, in order to get more and precise information.
How to calculate and analyze NPS
When analyzing a Net Promoter Score you get to know how your business growth is going, where it stands right now, and how your business is doing compared to the others in the same industry.
To make a complete analysis of your NPS benchmark is not an easy process, I know, but you can achieve it if you follow a few tips to help you conquer this task.
Start by splitting your responses by their score. What is the number of customers that gave you each score? Then, with the answer to this question, you can add the detractors (0-6) and the promoters (9-10) and calculate each percentage.
To calculate the NPS you must take the percentage of promoters and subtract the percentage of detractors, then you can know how well your brand is doing.
The good news is that you don’t have to do all the math yourself. MightyForms calculates the score for you when you use the rating field. Automatically. All you have to do is check it out periodically to make sure your business is doing well.
But that is not all.
You want to evaluate your business completely, so you can keep improving your product, service, and customer satisfaction. So, it is a great addition to your survey to add an open-ended question after the score, so your user can tell you the reason for their score. By doing so you can see what makes them unsatisfied and where you must put your efforts to improve.
What is a good NPS?
An NPS range goes from 0-10 score as your respondent choice. But in order to calculate it, it will be -100 to +100, since it is the percentage of people that are promoters (9-10) minus people that are detractors (0-6). So, anything above 0 will be a good NPS.
The perfect score of 100 (where every single one of your customers are promoters) is very unlikely, so set your expectations accordingly.
Big brands like Apple, Microsoft, and Amazon have NPS 47, 45, and 25, respectively. You must, however, make a big effort to keep a high score. That means you must offer good service, excellent products, and a great user experience.
And what about a bad one?
Anything below zero will be a bad score, and also bad news for your company. It means that you have more detractors than promoters. Instead of people talking about your business to friends and families, and doing business with you again, becoming a real ambassador for your brand, you have people that not only won’t do business with you again but they can also be talking badly about your company, spreading around that none should ever buy from you. As I said, bad news.
With negative indicators you should start immediately to improve all your products, services offered, and customer experience, so you can become above zero in no time. Use the score as a lever, that tells you how much work is still needed to improve your brand and conquer more ambassadors.
How to improve NPS
Your score will tell you only how satisfied or unsatisfied your customers are. But you’ll need an in-depth survey if you want to learn the “why”, the reason for their score choice. So, you ask more than the widely known question “how likely would you recommend us to a friend or family”.
You can add a comment field, where the respondent can give you more details. And you can always ask 3 or more questions on your survey, definitely employ Logic Rules to your advantage so you can Show the next question based on their NPS answer.
You may ask:
- How can we improve?
- What disappointed you? (in the case of a low score)
- What did you like about your experience with us? (in the case of a high score)
The idea here is to understand what led to the score the user gave you. This brings you an in-depth insight into the reality of your brand and product, allowing you to offer better performance and experience.
Another action to take to improve your NPS is by engaging with unhappy customers. Try to understand them and to reassure them you’re doing your best in order to develop wherever that left them unsatisfied. Your goal is to become a top brand, so remember that you must always offer excellence to users and customers. Keep in mind that companies with customer-centric minds outperform those who are not and that 77% of consumers have a more favorable view of brands that not only listen to their feedback but also put them into practice.
All that will improve your brand NPS, meaning you are gaining more loyal customers.
Examples of questions and templates
The traditional NPS question is the one that asks the likelihood of the user to talk about your brand to friends and family. But you can vary this formula, creating uniqueness and with brand “personality” as part of it.
If your brand has a more casual and cool take, you can make your question sound the same way, talking in the language that your target audience expects from you. That’s assuming an identity and being recognized by it.
How to create an NPS survey
There are a few key elements that can help you gather the necessary data to keep your business growing, as well as your NPS. Learn from your customers by doing a great survey.
Here are 5 tips for you to make a data-driven Net Promoter Score Survey:
1. Build your Net Promoter Score question
Your NPS question can follow your business identity, as mentioned above, but there’s a standard pattern to follow that is to ask the likelihood of your customers to tell others about your business. It is their given score that will tell you the probability of your business growth based on the number of promoters you have. And also what tells you if you should improve. But the why and where is conquered using other questions on your survey. So, be straightforward in your NPS question, since it will guide the following answers as well.
2. And add a comment space
This is how you get the “why” and “where” you can improve your business - if it is in customer services, product, website, forms, etc.
Use Logic Rules to show the right question to your user. Something like: “how can we improve”, in case they give you anything under 8 score, or “what did you like the most” if they give you a 9 or 10 score. The important thing is for you to learn your weaknesses and strengths.
3. Ask the reason for the score
Not only the comment section after the score question but also a “why” question about the score they gave you. Ask your user directly why they have chosen a specific rate and use this as a push to help you grow your business.
4. And how you can make the customer experience better
The customer can just say “I didn’t like you”, right? So, probe them a little further and ask directly how they suggest you can improve. Last time a company asked me that, I said the problem was the time they took to deliver me the products I’ve bought. In this case, you can choose or hire a new delivery company, as an example.
5. Follow up with the customer (with their permission)
Ask them if you can keep in touch with them, and send a nice message thanking them for taking the time to answer your survey. Since you can improve your business using their answers, the minimum you can do is give something back in recognition for your client’s time and for them having given you feedback. Be nice in your thank you message, and, even if it is an automatic one, don’t forget the human tone.
Free NPS survey templates
MightyForms has dozens of templates for you to use or be inspired by. Here you have 3 great examples of how you can build your NPS survey:
Customer Experience Feedback
This ready-to-go feedback form is great for you to learn more about your customer’s likelihood to come back and to refer to your company. And it comes with the space/field for comments we’ve been mentioning.
Although it is not the main purpose of an NPS, you can also use it for market research before launching a new business or product, or even a new version of your old product. Use market research to learn more about your target audience.
Learn more about your product reception and how your target audience reacted to it with this ready-to-go product evaluation form template. Discover your Net Promoter Score and get suggestions from your customers on how you can keep improving.
An NPS survey can be the game-changer your business is waiting for to boost its growth. And MightyForms has what you need for it. Automate your process with integrations and features like Zapier and the Abandoned Form Recovery, which allows you to track your form field-by-field, learning where a lead drops off. Use logic rules to create intuitive forms that ask the right question for each respondent based on their previous answer, and also allow them to save and resume the form.
Your survey can be as great as your business. Learn more from your customers and keep improving your business, customer service, and products.
Net Promoter, Net Promoter System, Net Promoter Score, NPS, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld, and Satmetrix Systems, Inc.