What is NPS and Why it Matters for Your Business
Have you ever wondered how to gather feedback from every customer who shops at your store without bombarding them with mass emails that are unlikely to be opened?
Have you ever considered how to keep track of your loyal customers, and maybe find out why some of them may not want to return?
At the end of the day, you did something right, and they made a purchase, but will most of your customers rave about your product or services to their inner circle? Or will they make sure to take their money elsewhere next time.
Net Promoter Score (NPS) is a business tool that provides valuable insights into your business’ customer satisfaction and loyalty. It uses an easy-to-understand scale of 1-10 and it is the go-to tool for businesses to gather analytical information about their customer's perceptions of their business.
While it shouldn’t be the only tool you use to get a health check on your business, let’s look into the dos and donts of implementing NPS for your business.
What is Net Promoter Score (NPS)?
Invented by Fred Reichheld in 2003, NPS is known as the modern way to understand exactly how customers feel about your business.
It was born out of the idea that people will undoubtedly talk about a business when their experience falls on either end of the spectrum. So, why not work towards identifying these groups and uncovering the reasons behind their sentiments? After all, word-of-mouth marketing and customer loyalty are some of the most powerful marketing channels.
With NPS you can identify your biggest fans (promoters), your biggest haters (detractors), and everyone in between (passives).
For every business, there is a chance to learn and act upon the feedback that each group provides.
What does each group represent?
😄 Promoters (9-10)
➜ Loyal to you and make an effort to spread the word about your business.
➜ Fully support your business and don’t see a reason to turn to your competitors.
😐 Passives (7-8)
➜ Satisfied with your service, but won’t necessarily shout it from the rooftops.
➜ They might come back to you or go to one of your competitors because they have no reason to stay loyal.
🙁 Detractors (0-6)
➜ Not happy with their experience.
➜ There’s a high chance that they will leave a negative review and feel compelled to share their thoughts online.
Everything You Need to Know About a Successful NPS Implementation
How NPS Is Calculated
Your Net Promoter Score is calculated by taking the difference between your promoters and detractors.
Percentage of promoters - percentage of detractors = Your NPS
Your score can range between -100 to 100, meaning that on one end 100% of your customers that responded to your NPS survey are detractors (scored your product or service between 0-6) or 100% are promoters (scored between 9-10). While these represent two extremes, what does a healthy score look like?
At the end of the day, any positive score is great because it means you have more promoters than detractors, but a healthy NPS score will look different for most businesses depending on their industry.
How to Interpret Your NPS Score
NPS scores offer real-time analytics on how your business is doing, and once you have an idea of what a healthy NPS score looks like for your business, you can use it as a tool to measure the success of changes you make in your business.
But how should you interpret your score? Especially if you just got started with NPS.
Your promoters and detractors are the ones that provide you with clear insight into what they're thinking about your business. These two groups can give you a good idea of any trends in your business and help you identify areas for improvement.
However, it's important to keep an eye on the passives. Paying attention to your passives is crucial because they can be an early warning sign of potential problems. If your passives are trending upwards and your promoters are decreasing, it's an indication that you might start getting more detractors if you don't take action.
On the other hand, if you see your passives trending downward and your detractors decreasing, it's a sign that you are doing something right. Keep it up 😀!
It's important to take all three groups into account when evaluating your NPS scores because they are each essential reminders of how your business is doing.
The Next-Generation of NPS
If you're looking to get more honest and accurate feedback from your customers, you might want to consider a whole new way of asking how they score your business.
As we discussed earlier, emails tend to have a lower open rate, and asking customers to click through multiple links to provide an NPS score may come across as assigning homework. So, what’s a more effective option? Asking for your NPS score via text message.
Texting is quick and easy, and most people are more likely to respond to a text message than to an email. Text messaging is not only a more accessible form of communication; all you are asking them to do is rate their experience with your business on a scale of 0 to 10. Effort level: almost 0.
Here’s the beauty of text messaging, you just opened a whole new communication channel with your customer and now you have the chance to have a real conversation and clearly strategize how you want to move forward with each customer group.
The next generation of NPS is not only about leveraging the power of texting, the real game-changer is the ability to strategize after receiving a response.
Keep reading, in the next section we will discuss the steps you be taking for each customer group.
And if you have more questions about business text messaging, check out our business text messaging guide where we cover all the basics.
Maximize Growth with NPS and Text Messaging
The Power of Follow-Ups
First, it’s important to remember that timing is crucial when it comes to asking for an NPS score. If you ask too early or too late, you may not get an accurate reflection of the customer's true feelings about their interaction with your business.
But asking at the right time can make a significant difference – we have found that the sweet spot to ask for an NPS score is 24-48 hours after the interaction.
You can ask for an NPS score after an in-store purchase or a web chat interaction that started on your website. Our customers have found that asking for an NPS score right after a sale more often results in ‘I haven’t had a chance to try the product yet’.
Once you receive your NPS score, you can strategize how you approach each customer group. For promoters, you can ask for positive reviews to boost your online reputation, we map out the how-to in this blog post.
For passives, you can probe deeper to understand what could have been better. This customer group allows you to increase your score by showing that you care about their experience.
For detractors, you can address their concerns in a personable way because you are now on texting terms and you have the opportunity to solve any issues outside of a public platform. The important part is to remember that while your team's intentions may have been in the right place, it's always essential to actively listen and gauge how your service is perceived by your customers. There's always room for improvement, and customer feedback is a valuable tool in achieving it.
Showing your customers that you value their feedback and using it to make improvements will help you build a stronger and more loyal customer base.
Escape the Email Sludge With Texting
Personalizing the way you ask for an NPS score can make all the difference. Customers are more likely to respond positively and honestly when the interaction doesn’t feel “transactional”. Sprinkle in some personality to make it feel more casual.
One way to personalize your NPS request is to use the customer's name or use it as an opportunity to ask specific questions about the customer's recent experience.
For example, if you tried curbside pickup for the first time this holiday season, it might be a good idea to check in and see if it’s something your customers appreciate.
Here are 5 different ways to ask for an NPS score that allows you to shine through some personality depending on your industry.
Hey {first name} ! How likely are you to recommend {store name} to a friend? Rate us from 0-10, and help us improve our style game!”
“Thanks for choosing {store name} for your bike needs! How likely are you to recommend our shop to a friend for a new bike or service? {first name}, rate us from 0-10, and help us pedal forward!”
“How likely are you to recommend our jewelry store to a friend? Rate us from 0-10, and let us know how we can shine a little brighter next time.”
“Your furry friend deserves the best! How likely are you to recommend {store name} to a friend? Rate us from 0-10, and help us give the best pet care!”
“We’re here to help you feel your best, {first name}! How likely are you to recommend us to a friend? Rate us from 0-10, and let us know how we can power up your health journey!”
The #1 NPS Mistake to Avoid
The #1 biggest mistake that businesses make with NPS is falling into one of two extremes.
Some businesses become obsessed with their NPS score and forget about the bigger picture. On the other hand, some businesses dismiss the importance of NPS altogether.
It allows businesses to not only talk the talk but walk the walk and become more customer-centric than ever.
Ready to see the benefits of the next generation of NPS for yourself?
Sign up for our free trial and start measuring your customer satisfaction today!