NB The article is originally produced in Danish
What is NPS?
The Net Promoter Score (NPS®) is an effective method for measuring, understanding and acting on your customers’ experiences.
Therefore, NPS has become a method that many successful organizations use to create better customer experiences, more loyal customers and thereby increased sales.
Satisfied customers are happy and have got what they expected. But loyal customers experience that they have received more, are therefore less price sensitive and generally buy more. They are your ambassadors in the market and attract new customers.
Dissatisfied customers, on the other hand, spend more time on customer service, cost more to maintain and happily tell others about their bad experiences. They happily change brand or company and are at the same time the most expensive to get to buy.
With an NPS-based loyalty program, you simply and effectively gain important knowledge about what your loyal, passive and dissatisfied customers are experiencing and how you should act on it.
The NPS method - How does it work?
The reason why the Net Promoter Score has become an international standard is that it is partly a very simple measurement method and partly that a linear relationship between Net Promoter Score and growth has been documented. The Net Promoter Score is also called the “Ultimate Question” because you only ask your customers a question and index them based on their answers:
“How likely is it that you will recommend our company/product and why?”
The Response is valued on a scale from 0-10. You can then classify the customers in three groups, based on their responses.
Promoters (scores 9-10) are loyal enthusiasts that will keep purchasing and who are often recommending your organization or product to others. These customers help strengthen the company’s brand through positive Word-of-mouth and often drive profitable sustainable growth.
Passives (scores 7-8) are satisfied but without specific preferences for your organization and “Passives” will therefore be susceptible to your competitors offers.
Detractors (scores 0-6) are unsatisfied customers that could potentially damage the organizations brand and prevent growth in the organization through negative mention.
How does one calculate the Net Promoter Score?
To calculate the NPS of an organization or a product, one would detract the percentage of detractors from the percentage of promoters. This will result in a score of the total customer experience between -100 and 100.
When the receiver has answered the question, they are given the opportunity to elaborate on their response. Essential to this, the response rate and relevance for the comment, is that the follow up question is related to the actual rating.
What could we have done better?
What does it take yo reach a 10?
What is the reason for your positive rating?
By giving the respondents the opportunity to elaborate on their answers you are not affecting the response but will the receive the tool to understand the reasons for the respondent’s answer. This means that you do not have ask more questions, as the respondents will tell you what is most important to them.
This is the core of the NPS-method. Only asking questions on the premises of the receiver instead of a series of questions that the sender think is important. We give the respondent the opportunity to share exactly what is important for them.
Customer Experience Management with the NPS method
NPS can do more than just measure customer loyalty. It is also an effective method of measuring and acting on the basis of customer experiences. by reformulating the question a bit, you can adapt it to all of your company’s touchpoints. This allows you to use the same method across the entire organization, from customer service, sales, delivery or in your marketing.
Here you get the respondent’s primary input for the specific experience. Instead of asking your customer a variety of questions about their experiences once a year that they may not find essential, ask your questions in the current situation. Thus, the question has greater relevance to the recipient and you get the answer while out still have an opportunity to act on it.
With NPS.Today you can combine satisfactory and loyalty measurements in one total solution based on the NPS-method. Furthermore, you have the opportunity to ask the NPS-question, and the specific questions that you need to ask, in every transaction, touchpoint and channels throughout the customer experience.
Do you want to know more about how you can convert your annual customer investigations to operational NPS? Reach out for us now!
NPS - FAQ
- What is NPS?
The Net Promoter Score is also called “The ultimate question” because you ask your costumers only one question. - How does one calculate NPS
To calculate the NPS of an organization or a product, one would detract the percentage of detractors from the percentage of promoters. This will result in a score of the total customer experience between -100 and 100.
