Net Promoter Score®

Net Promoter Score® is a method of measuring customers’ loyalty by sorting them into promoters, passives and detractors (see below, “Calculating Your Net Promoter Score®”). But more than that, NPS is a management philosophy, a way of running a business.

Net Promoter companies commit to specific processes and systems that help everyone focus on earning the passionate loyalty of both customers and employees. The business payoffs are substantial.  Loyal, passionate customers stay longer, spend more, contribute suggestions and sing your company’s praises to friends and colleagues. Loyal, passionate employees love working for you, come up with new ideas and go the extra mile to delight customers.

That’s why loyalty correlates so strongly with sustainable, profitable organic growth. On average, an industry’s loyalty leader grows more than twice as fast as its competitors.

“The beauty of Net Promoter® helps to simplify complex issues and helps people to make the right decisions. [It] makes people ask themselves: Is this the right thing to do for our customer, and is it economically appropriate for the firm?” CEO Walt Bettinger, financial services firm Charles Schwab.

Net Promoter Score®, or NPS®, measures customer experience and predicts business growth. This proven metric transformed the business world and now provides the core measurement for customer experience management programs the world round.

But this only works when NPS is implemented correctly. At 6peas we work on creating the organizational change that supports your NPS program. We help you drive the customer centric culture that is inherent to your NPS score moving in a positive direction and realizing the value of your lifetime customers.

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.

Subtracting the percentage of Detractors from the percentage of Promoters yields the Net Promoter Score, which can range from a low of -100 (if every customer is a Detractor) to a high of 100 (if every customer is a Promoter).

The four key steps to effective implementation of NPS

Step 1: Identify your customer ‘contact’ points.
Understanding the contact or touch points and how they impact your customer and their experience is the first stage of your NPS system. These customer contact / touch points need to be considered regardless of whether the survey is ‘transactional’ or ‘relationship’ focused.

Step 2: Develop your NPS system.
It is important to determine the links between your NPS survey questions and your company Key Performance Indicators (KPI’s). Consideration also needs to be made about the type of NPS survey that is conducted – transactional or relationship focused, sampling methods as well as the data collection method – online or telephone.

Step 3: Understand the drivers of customer loyalty.
In order to make improvements, it is vital to understand what is influencing the behaviours and feelings of your detractor, passive and promoter customers who are providing feedback based on their individual customer experiences. It may be necessary to conduct post-survey follow-up to clarify feedback provided to effectively gain greater insight and strengthen the customer relationship.

Step 4: Create a closed loop system.
Front-line, middle management and senior management is required to have an effective closed loop system. Front-line staff such as customer service, technical support and sales play a key role in developing promoters and neutralising detractors. Middle managers provide performance coaching and know how to manage excellent customer experiences. Senior managers help create and provide appropriate systems for recognition, communication and ensure the NPS results remain in line with strategy deployment.

6peas a customer experience consultancyThe 6peas NPS® solution is an excellent option for organisations wanting to establish a sound customer satisfaction assessment process, receive actionable data, and receive maximum return on investment. It is the only metric that can evaluate the value of positive word of mouth and predict your future losses in dollar terms.  NPS assists you prioritise your strategic activity where it gives you the largest return. It is more than a survey it is an indicator of your future growth.