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Net Promoter Score

How Net Promoter Score Drives Customer Experience and Loyalty

In this day and age of global economy, the effect of a review of a customer is more widespread than ever. A satisfied customer may tell a few, however, a distraught customer may tell the whole world and this is not a good image for a brand. 

If a customer leaves a bad review on a community support page or social media, it may be available for the world to view publicly and thus may lead towards losing potential customers. Similarly, word of mouth have a potential to reach increasing number of people and can serve as free marketing for your brand. Your loyal customer is a walking advertisement and nothing speaks for your brand as sincerely as a satisfied customer. It is all the more important now to build a loyal customer base and provide a seamless customer experience. To gauge the loyalty of your customer, there exists a metric known as NPS or Net Promoter Score.

Net Promoter Score, What & How

Net Promoter score is a metric designed to gauge customer loyalty and to measure customer experience. NPS can be calculated by answering to a simple question which asks, ‘how likely you are to recommend this product or service to a friend?’ Customers can then answer based on their satisfaction levels and can select from numbers ranging from 1 to 10, with 1 being the lowest satisfactory score and 10 being the highest. There can also be a number 0 which can refer to fraudster services. It’s extremely simple yet very powerful.

How it works

NPS is considered one of most effective and widely used metric. Loyalty is lucrative, the ability to measure is imperative and NPS is useful. 

When customers select a score based on how likely they are to recommend a product to a friend, they can be further categorized into the following categories:

Customers from 0-6 are considered a detractor, 7 and 8 are passives and promoters are 9 and 10; customers who are most likely to recommend your business. 

From then onwards, they can be converted into percentages. if there were 10 ratings, 6 of which were promotors then the promoter percentage will be 60%. In order to measure the NPS, you need to subtract the percentage of detractors (people who will not recommend your service) from the percentage of promotors (customers who will recommend your service). The goal of the companies is to have least number of detractors. If out of 10 of your customers, 9 are most likely to recommend you and 1 is least likely to recommend, your score will be 90% and 10% which will translate to:

Net Promoter Score = 90% – 10% = 80%

How to understand NPS

While collecting NPS, it is important to understand how real companies are using this information. It is important to understand that NPS scores vary from one industry to another so instead of comparing two companies of different industries, NPS scores should be compared between two companies of the same industry. It is also important to keep checking NPS scores regularly as customer reviews can impact NPS score. Customer loyalty is perhaps the most important aspect for any organization and therefore it is of utmost important to not only keep measuring you NPS scores but to try to consistently improve them. 

Effects of Net Promoter Score

Net Promoter Score effects a lot of aspects of your business.

Generating Referrals

With referral marketing technique, you can reach out new customers with the help of your already existing customer base. With NPS, you can take advantage of referral marketing, which is one of the most effective marketing techniques. Customers are more likely to complete a purchase if a friend refers them to a product or service and they have longer lifetimes as customers. NPS builds your brand reputation, upholds your brand image, increase your brand awareness and makes it highly likely for your customers to close a sales deal.

Customer Loyalty

For businesses, their utmost prized possessions are their loyal customers. We not only calculate NPS score for you to generate new leads, but we also make sure to keep your already existing customers satisfied. Since it costs more for businesses to create a new customer base compared to sustaining an already existing one, we make sure to satisfy your most loyal customers.

Meaningful. Personal. Human.

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