Nps

NPS (Net Promoter Score) - is a metric of customer loyalty that shows how willing customers are to recommend a company’s products or services to others. It is calculated by asking customers to rate their likelihood of recommending the business (from 0 to 10) and subtracting the percentage of detractors from the promoters.

How to calculate Net Promoter Score?

The Net Promoter Score (NPS) is calculated as follows:

• Conduct a survey: Ask customers the key NPS question “To what extent would you recommend our company/product to a friend?”, asking them to rate it on a scale from 0 (least likely) to 10 (most likely).
• Classify respondents:
• Promoters: those who answered 9 or 10.
• Neutral: people who answered 7 or 8.
• Detractors: those who answered 0 to 6.
• Calculate percentage of Promoters and Detractors.
• Calculate NPS data: Subtract the percentage of Detractors from the rate of Promoters.

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Customer loyalty survey

The NPS (Net Promoter Score) survey should be conducted by companies and organisations that want to measure the level of loyalty and satisfaction of their customers.

When should it be conducted?

The appropriate timing and frequency of an NPS survey can depend on several factors:

• Post-transaction: NPS can be surveyed immediately after a purchase or service is made when the customer experience is still fresh.
• At the post-sale stage: Conduct a survey some time after purchase to assess long-term customer satisfaction.
• Regularly: Regular NPS surveys (e.g. quarterly or annually) help track brand perception changes and respond to trends.
• After changes: If a company has made significant changes to a product, service or customer service, it is worth investigating their impact on customer loyalty.
• In the event of a decline in sales: An NPS survey can help you understand the reasons behind a drop in sales or a reduction in customer satisfaction.

Who it is for?

• B2C companies: All companies selling directly to consumers, from e-commerce to services.
• B2B companies: Businesses that offer products or services to other companies.
• Startups: Young companies that want to understand the market response to their offering quickly.
• Non-profit organisations: Organisations that want to measure the engagement and satisfaction of their donors or beneficiaries.

Why an NPS survey is worth using?

The use of the Net Promoter system is valuable to companies for a number of reasons:

1. Simplicity and effectiveness: the Net Promoter scores’ indicator is easy to understand and implement, while providing powerful insights into customer loyalty.
2. Customer satisfaction index: Helps to assess how satisfied customers are with a company’s products or services and whether they are willing to recommend them to others.
3. Growth predictor: A high NPS often correlates with repeat purchases, greater customer loyalty and organic business growth.
4. Rapid feedback: Allows for rapid feedback from customers, allowing for ongoing monitoring and quick response to any issues.
5. Product and service development: With customer feedback, the company can better understand which aspects of products or services need improvement.
6. Relationship management: Helps identify both promoters and detractors, enabling more effective relationship and communication management.
7. Benchmarking: NPS allows performance to be compared to competitors and industry standards, which can indicate a company’s position in the market.
8. Employee engagement: A high NPS can motivate the team to continue working on service and product quality.
9. Cost optimisation: Understanding customer needs can help avoid unnecessary spending on less effective marketing activities.

What is considered a good NPS score?

The answers collected are presented on a scale from -100 to 100, and its rating depends on the industry and market context. In general:

• A score between 0 and 30 is thought to be good, indicating a healthy number of Promoters relative to Detractors.
• A score between 30 and 70 is thought to be very good and indicates strong customer loyalty.
• A score above 70 is thought to be excellent and indicates extremely high levels of customer engagement and loyalty.

However, it is worth remembering that a ‘good’ NPS score can vary from industry to industry, as each has its own standards and customer expectations. Therefore, it is important to compare a company’s NPS score with industry averages and competitors’ scores to get a more complete picture of customer satisfaction success.