Extensive research has shown that your Net Promoter Score®, or NPS®, acts as a leading indicator of growth. If your organization’s NPS is higher than those of your competitors, you will likely outperform the market, and managing your organization to improve NPS will also improve your business performance, whether you are aiming for faster growth or increased profits.
Your NPS forms the core of a measurement framework that should be tightly tied to the customer journey, that is, the path customers take as they interact with your business. NPS measures customers’ overall experience of your brand.
Net Promoter Scores are calculated using the answer to a single question, using a 0-10 scale: How likely is it that you would recommend [brand] to a friend or colleague? This is called the Net Promoter Score question or the recommend question. Respondents are grouped as follows:
- Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others, fueling growth.
- Passives (score 7-8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
- Detractors (score 0-6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.
Subtracting the percentage of Detractors from the percentage of Promoters yields the Net Promoter Score, which can range from a low of -100 (if every customer is a Detractor) to a high of 100 (if every customer is a Promoter).
Use Additional Insight to Guide Action
NPS2, the latest Net Promoter methodology, emphasizes responsive action geared toward improving the customer experience in the short and long term. That kind of action requires a nuanced understanding of the drivers of loyalty and satisfaction. The best practices in NPS2 direct you to monitor the customer experience at key points along the customer journey so that you can make improvements that matter to customers.
To begin gathering the nuanced insight you’ll need, always follow the Net Promoter Score question by asking for the respondent’s reason for the score. Net Promoter surveys should also include questions that gauge customer satisfaction with various aspects of the relationship and brand, along with the importance of those aspects.
While Net Promoter Score measures customers’ overall experience, it isn’t always the best measure of the transactional aspects of your business, and that’s why NPS2 embraces and encourages the use of complementary metrics so you can get a full picture of the customer journey and more easily use the data you gather to inspire employees to act. For interactions like the purchase process or a call to your help line, it’s often more effective to measure satisfaction or Customer Effort Score. These diverse measures, along with unstructured feedback, operational data, and other insights, should all tie into the measurement framework that guides your customer experience management work.
Driving action begins with delivering actionable insights to people throughout your organization. In the NPS2 methodology, a focus on democratizing your Net Promoter data helps ensure that employees at all levels feel empowered to act.
When your goal is to use the insights you gain from customer feedback to drive action, it’s helpful to think about the employees who consume the information. Consider their roles and their goals. Broadly, they’ll fall into one of three categories: frontline, management, and executive. At every level, employees need to know what customers have to say about your business.
Closing the Loop
Net Promoter methodology has always taught that customer feedback should inspire action. Begin by reaching out to customers who take the time to share their thoughts with you and directly addressing their concerns or ideas. We call this process “closing the loop.”
NPS2 takes the closed loop concept to the next level: smart loops. In the smart loop framework, we encourage three types of closed loops support your customer experience management. Frontline closed loops, in which frontline employees promptly call customers after they have given feedback, have always been a great way to prevent Detractors from taking their business elsewhere. They become smart loops when you also use them chance to gather insight on root causes. These one-to-one interactions are powerful relationship builders too.
Two additional smart loops build on the frontline process. A one-to-many closed loop, for action planning, engages management in overall improvements to customer experiences, while a resource allocation closed loop guides executives to engage in organization-wide prioritization.
Your Net Promoter program gains power when it becomes integrated into the business as a whole. Organizational adoption happens when make sure that you give leaders in sales, marketing, product, service, and indeed every area of the business, the information they need to keep their operations focused on the things that matter to the customer, and to drive improvement and innovation. You’ll also want to ensure that customer data is built into the operational rhythms of the business.