When it comes to measuring customer loyalty, satisfaction, and advocacy, businesses use various metrics and tools. One of the most popular and effective metrics is the Net Promoter Score (NPS), a customer experience metric that measures the likelihood of customers recommending a brand or product to others. In this blog post, we’ll cover the why, how, what, and when of NPS.
Why use NPS?
NPS is a valuable metric for several reasons:
- It’s simple and easy to understand: NPS is based on a single question that asks customers how likely they are to recommend a brand or product to others, on a scale from 0 to 10. This makes it easy for customers to provide their feedback and for businesses to collect and analyze the data.
- It’s actionable: NPS provides businesses with a clear indication of their customers’ satisfaction and loyalty, and allows said businesses to identify the drivers of both promoters (customers who give a score of 9 or 10) and detractors (customers who give a score of 0 to 6). This information helps businesses improve their customer experience, retain loyal customers, and win over new ones.
- Businesses can use it as a benchmark: NPS can be compared across different brands, industries, and regions, allowing businesses to see how they stack up against their competitors and the market average. This benchmarking helps businesses set realistic goals, track their progress, and stay ahead of the competition.
How to calculate NPS?
To calculate NPS, businesses need to follow these steps:
- Ask the NPS question: “On a scale from 0 to 10, how likely are you to recommend the brand/product to a friend or colleague?” This can be asked via follow-up survey to customers.
- Group the responses into three categories:
- Promoters: customers who gave a score of 9 or 10. They are loyal, satisfied, and likely to recommend the brand/product to others.
- Passives: customers who gave a score of 7 or 8. They are neutral, satisfied but not necessarily loyal, and may or may not recommend the brand/product to others.
- Detractors: customers who gave a score of 0 to 6. They are unhappy, dissatisfied, and likely to share their negative experience(s) with others.
- Calculate the NPS by subtracting the percentage of detractors from the percentage of promoters: NPS = % Promoters – % Detractors
The NPS score can range from -100 (if all customers are detractors) to +100 (if all customers are promoters). A positive score indicates that the brand/product has more promoters than detractors, while a negative score indicates the opposite.
Overall NPS Ranking
70 or more: Outstanding
50 to 69: Strong
49 or less: Needs Improvement
Below 0: Red Flag!
What to do with NPS?
Once businesses have calculated the NPS, they can use it to:
- Understand customers’ feedback: NPS provides businesses with a high-level view of their customers’ sentiment and loyalty, but it’s important to dive deeper into the drivers of both promoters and detractors. This analysis can uncover specific issues, pain points, or strengths that businesses can address or leverage to improve their customer experience.
- Identify improvement opportunities: By analyzing the drivers of detractors and passives, businesses can identify the areas where they need to improve their customer experience, such as product quality, customer service, pricing, or delivery. This analysis can also help businesses prioritize their resources and initiatives based on the impact they will have on the NPS.
- Monitor their customer experience performance: NPS is not a one-time measurement, but an ongoing process that businesses should monitor and track over time. By tracking their NPS
Bluebird Network’s NPS
The telecommunications industry only has a 31 as an average NPS score, while Bluebird Network has a B2B NPS score of 70. This shows that Bluebird is well above the curve when it comes to the customer experience.
In conclusion, NPS is an essential customer experience metric that enables businesses to understand their customers better and make informed decisions to improve customer loyalty. By understanding the fundamental aspects of NPS, including its purpose, implementation, interpretation, and timing, companies can improve their customer experience and gain a competitive advantage in the marketplace.