Have you heard about NPS? This simple acronym, which means “Net Promoter Score” is one of the most powerful tools to measure customers loyalty level.
We all know that every kind of businesses have more potential to survive and growth when they have credibility and loyalty from their clients. And it is not just about sales results, but mostly from clients’ opinions and their recommendations about one company or brand.
These actions are natural, spontaneous, powerful and can work better than any marketing action or advertising. However, when customers have bad experiences, low trustful level or are not satisfied with a product or a service, their opinion can be very prejudicial for the brand.
Researchers say that one satisfied customer usually recommend one brand to 3 people, while unsatisfied customers, tell their bad experiences to 11 people.
Although we can see how important is to know your customers’ opinion about your business, it can be difficult to measure sometimes.
Created in 2003 by the business strategist Frederick Reichheld, NPS is a simple and efficient tool which, if used correctly, can provide a very good overview of customers satisfaction.
How does it work?
NPS consists in a survey form, which has just one simple question “How likely customers are to recommend one brand for a friend?”. And for the answer there is only one scale with numbers from 0 to 10.
When the forms are responded, the data has to be analyzed according to the score in the scale. The customers will be divided into 3 categories, which are:
Promoters (9 – 10 points) – Customers who are very happy with their choice for that brand and would highly recommend its products or services to friends or family.
Neutrals (7 – 8 points) – Customers who utilize some products or services from that brand but are not loyal. They would change to another brand if there is something more interesting or better price. They could recommend the brand to others, but not always.
Detractors (0 – 6 points) – Customers who had a bad experience with the brand and would not recommend it to anyone.
The final result is calculated by subtracting the percentage of detractors from the percentage of promoters. Then you can see the NPS score, which will be considered to understand your customers satisfaction and as a guide for your CRM (sales and marketing activities).
CRM and NPS
Companies that utilize actively CRM have more chances to have greater NPS score. Understanding your customers’ feelings, marketing and sales team can develop efficient strategies to keep their satisfaction, delivering a higher customer experience. Or, if the NPS result is low, they can rapidly improve the relationship with their clients, by offering personalized solutions when they reach the company with any inquiry or request, for example.
However, NPS should not be considered the only way to evaluate your customer satisfaction, but a part of the whole process. This tool measures their opinion just in the moment that the survey is applied, and it can change significantly from time to time. It is important to diversify metrics to get an overview of the operation and identify different business perspectives.
After all, your customers will use varied channels to post questions, frustrations and compliments – and it’s up to you to stay active on those channels as well.