Do you know what your company's NPS is?
After selling a product or service, companies send buyers a satisfaction survey. Through a few questions about the customer experience, it is possible to translate feelings of satisfaction and dissatisfaction into a performance indicator.
This indicator, called the Net Promoter Score (NPS), is used by Customer Success teams to understand how products and services are perceived by their consumer base. And what do you do if they are perceived negatively?
In this article, we will explain more about NPS, how it is calculated and present five strategies for reversing poor results.
What is NPS?
The Net Promoter Score, or NPS, is a metric used to transform the opinions of a company's customers into a numerical indicator.
Introduced by Fred Reichheld in 2003 in the article The One Number You Need to Grow in the Harvard Business Review, the NPS is based on a single question:
"On a scale of 0 to 10, how much would you recommend our company, product or service to a friend or colleague?"
Based on the answers, customers are categorized into three groups:
Promoters (Score from 9 to 10)
Promoters are extremely satisfied and loyal customers who tend to buy again and again.
In addition, they make positive recommendations about the company, products or services to relatives, friends and work colleagues. That's why they're called promoters, they promote your business out of pure satisfaction.
Neutral (Score from 7 to 8)
Neutrals are satisfied customers who don't have a strong bond with the company. Faced with a more attractive offer, they may be influenced to buy from the competition.
Detractors (Score from 0 to 6)
A detractor is a customer who is currently dissatisfied and can damage the company's reputation through negative comments. They can express their feelings on social networks and dissuade potential buyers.
How to calculate NPS?
Calculating the NPS is simple.
The first step is to determine the percentage of promoters, neutrals and detractors in relation to the total number of respondents. Then you need to use the following formula:
NPS= %Promoters - %Detractors
The resulting NPS can vary from -100 (if all customers are detractors) to +100 (if all customers are promoters).
Here's an example: If 60% of customers are promoters and 20% are detractors, that would indicate an NPS of 40.
Is my NPS good?
It depends. In general, NPS values are separated into four categories.
- Excellent: 75 and 100
- Good: 50 and 74
- Regular: 0 and 49
- Bad: -100 and -1
However, benchmarking is necessary for each market sector. See the average NPS of US companies calculated by Customer Gauge in 2018:
- Health: 62
- Financial Services: 46
- Information Technology: 33
- Tourism: 53
- Retail: 54
Each NPS varies according to the product sold or service provided by the companies. So before jumping to conclusions, benchmark the sector.
What to do when the NPS is low?
Knowing the theory is only the beginning. The most important thing is to know what to do to reverse a low NPS. So, in this article, we're going to look at five actions that can be used to increase a company's NPS.
Prioritize customer service
One of the main factors influencing NPS is the quality of customer service.
For this reason, invest in training so that the team responsible for interfacing with customers can offer quick and effective solutions to problems.
When they feel they are well looked after, consumers tend to form a favorable opinion in the NPS and are more likely to become promoters of your brand.
Collect feedback constantly
To improve the customer experience, it is essential to know what their needs and expectations are in relation to the product, service and company.
So collect feedback regularly, whether through surveys, forms or even social media.
Analyze the data obtained on the complete shopping experience, from the use of online search engines to after-sales follow-up. With this information, you can find out which points need to be improved.
Personalizing the customer experience
In a market increasingly saturated with options, you need to remind your customers why you are ahead of the competition. And to show your customers that you occupy this space, offer personalized experiences.
Use your customers' behavior and preference data to make product and service recommendations based on previous purchases, exclusive offers and targeted communications.
By seeing that your company cares about each individual consumer, buyers feel that they are listened to and cared for. Thus, their positive opinions are reflected in the increase in NPS.
Building lasting relationships
Having a solid customer relationship is essential for increasing loyalty and NPS.
As well as offering an excellent product or service, maintain regular contact with your buyers. Offer loyalty programs and be present on social networks to answer questions and interact with your audience.
By opening up channels of communication, your customers feel that they are being listened to and that their questions are relevant to the company. So make the most of every opportunity to talk and strengthen ties with your customers.
Solving problems proactively
When a problem takes longer to resolve, the more time the customer has to consolidate an unfavorable opinion. So get ahead of the game! Solve problems before they become insurmountable situations.
By constantly monitoring customer feedback, the Customer Success team will be alert to any sign of dissatisfaction and ready to act.
Start by finding the problems, act quickly to resolve them and, if possible, offer compensation in recognition of the inconvenience. This way, you can get around a bad NPS and achieve a more favorable opinion.
Conclusion
The Net Promoter Score (NPS) is a valuable tool for measuring the satisfaction of a company's customers. Using it, a company can implement strategies to attract more customers and retain those who already buy, thereby boosting business growth.
Prioritizing customer service, constantly collecting feedback, personalizing the customer experience, establishing long-lasting relationships and proactively solving problems are some of the strategies that can help raise a company's NPS.
By implementing these strategies consistently, you'll be well on your way to creating a customer base that recommends your company and does business with you again.
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