In this article I will be speaking about NPS and how it can help your business, you may have clicked onto this article if you have no idea what NPS is, you may have heard these three letters circulate in conversations or quite possibly you are aware of what NPS is but would like to know how this can benefit your business.
Net Promoter Score Definition
The definition of NPS is ‘Net Promoter Score.’ NPS is a key metric used to measure the loyalty of a customer to a company. This can then be used to pinpoint key areas to improve or highlight performance within your company.
Net Promoter Score Benchmarks
The benchmarks or meaning behind net promoter score breaks down into three sections:
- Promoters – scores either 9 or 10.
- This implies that the recipient is happy with the service given and would be more than happy to recommend you to others.
- Passives- scores either 7 or 8.
- This is where they are not disappointed with the service, however, believes there is room for improvement.
- Detractors – which is anything between 6 and 0.
- This is when the customers are not happy with the service given and more than likely will not give repeat business or recommend you to others.
In terms of how NPS works, it is a number shown between -100 and 100 and your overall score will only show as minus if you have more detractors than promotors so keep those promoters up!
Why would you use NPS?
NPS is a great metric for rating specific areas of a business, and this helps you see which areas are running smoothly, or which areas might need some work. It can even be used by your customers to provide some positive feedback to help shine a light on the work you and your team are doing.
With these scores the individual can also leave a message afterwards to explain why they left these specific ratings, allowing that choice to offer positive or negative feedback can massively help influence future decisions going forward. Unsure if a new product or service is hitting that target audience? Focus an NPS score on that area and let the customer show you what they love and even possibly hate about the process to see what you can do to turn it around, as Bill Gates said - “We all need people who will give us feedback. That’s how we improve.”
How NPS helped me
When I was first made aware of the Net Promoter Score meaning, I was working in a B2C position that sent out a survey text each time an agent had opened a customer’s account. This made sure we provided the customer with the absolute best customer interaction in each conversation.
Like with anything you will have good days and you will have some bad, but reading the feedback given from customers on specific scores allowed me to change my approach with certain interactions to help better the customer journey and from this allowed me to increase the number of positive responses to come in.
What is the formula for NPS?
You may be asking what is the formula behind NPS and how do I know the scores we are bringing in are good enough? Most companies will aim for 70% or above as a strong benchmark for great service however some of the larger companies do not even hit that quota.
To work out your NPS score all you need to do is use the following formula – Total % of promoters – total % of detractors = net promoter score – it’s as simple as that.
An article posted by Hotjar shows that in 2018 Global companies like Amazon, Netflix, Google and more only achieved a score of 63%, to find out more on this here is the link to the article.
When it comes to implementing Net Promotor Score into your operation the larger the company the harder it is the maintain that 70% or above scoring. Consistency is key, and you need to use the scores and feedback as another weapon in your arsenal to help evolve and adapt your company’s way of working. The more you listen to the feedback the greater chance of positive feedback you can bring in.
I hope from reading this article you now have a better understanding of what Net Promoter Score is and why it can be beneficial to any company. Once implemented you can start to see where you may need to tighten up those bolts and before you know it you are on your way to a better experience all round.
Where can I get more advice?
With us! If you need help with choosing a suitable CRM system for manufacturing and engineering, or you want to make sure that your CRM project will be a success, talk to our team. We offer a free, independent CRM consultation that will help you get started with your CRM project. During the session, one of our CRM experts will help you define your needs, what your goals are and what tools you need to achieve these goals. Schedule your CRM consultation now!