What is your Net Promoter Score? — Highest score wins.

Loyal customers create value for a business or company through a variety of positive outcomes such as recommendations, repeat purchases and weaker response to activities from the competitor. Developing customer loyalty is a challenge as it takes a huge amount of skill across the entire customer experience, and brings a competitive advantage that is hard to beat. Every business thrives because of the activities performed by its promoters. These are the customers who will go to great lengths to spread positive word of mouth, praise and recommend the business to family and friends. Many organizations measure customer advocacy using the Net Promoter Score often referred to as NPS.

What is a Net Promoter Score (NPS)?

The Net Promoter Score (NPS) is an index that is used to measure the willingness of a company’s customers or clients to recommend its products and services to other people. This index is usually given as a percentage ranging from -100 to 100 and is used for measuring the overall customer satisfaction and with the company’s products and services. It is an indicator of the customer’s loyalty to the brand and how far the customer would go to advocate for the company’s products and services to friends and family.

Calculation for NPS

The measure of NPS is based on a single question: “How likely is it that you would recommend the company’s product and services to a friend or colleague?” normally the customers would give a rating ranging on a scale of 1–10, Where 1 means not at all likely’ and 10 means extremely likely’. Based on the responses, the customers are categorized into three groups as follows:

1. Promoters (9–10)

These are loyal enthusiasts who will keep buying goods from the business and will refer other customers hence fueling growth for the business.

2. Passives (7–8)

These are customers who are satisfied but not enthusiastic about the company’s products or service and are, therefore, vulnerable to competitor offerings.

3. Detractors (1–6)

These are unhappy customers who can damage the company’s brand through negative word of mouth hence impeding growth.

NPS is calculated by subtracting the percentage of detractors from the percentage of promoters. The passives are not included in the calculation.

Calculating NPS on a 1–5 scale

Customers can use a 1–5 scale instead of the 1–10 scale when responding to the NPS question. With this scale, scores 1–3 are considered to be detractors, 4 passives and 5 promoters. A 1–5 scale is an ideal range because some customers get confused with the 1–10 scale (it is overwhelming), this helps reduce the time they take to respond to the NPS question and improves their willingness to take part in the surveys.

Conclusion

It is not enough for a business to simply measure NPS to know where the business stands in terms of customer advocacy, the NPS score only informs the business of its standing and makes a starting point for more probing questions whose answers will inform the business on what it needs to do in order to earn customer loyalty. With NPS the business can compare its performance with their competitor and learn how to improve by asking the detractor the why’ question to know what it is that they are not doing right.

Want to collect Net Promoter Score from your customers. Gazella Wifi automatically prompts customers already in your store to give their opinion. Check us out online. Find out how to get more customers and learn from your current customers.

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