The Net Promoter Score (NPS) is a widely used customer loyalty metric. Respondents rate the likelihood that they would recommend a company, product, or service to a friend or colleague.
In practice, for a company, the best salespersons are often not their salespeople but the customers themselves. Satisfied customers serve as the most effective spokespersons for a brand or company. This is especially true in the world of social media, where information rapidly spreads among users, influencing those considering a future purchase.
An excellent description of the Net Promoter Score can be found on Wikipedia: https://en.wikipedia.org/wiki/Net_promoter_score
While NPS is powerful, it should be seen as part of broader customer market research methods that help uncover the ‘why’ behind customer behaviors.
On a scale of 0 to 10, individuals scoring from 0 to 6 are detractors, those scoring 7 or 8 are passive, and those scoring 9 or 10 are promoters. Those with a rating of 9 or 10 provide genuine support to a company, as they can be relied upon to contribute to company growth. On the other hand, those with ratings of 1 to 6 can have a negative impact.
The NPS formula is simple:
NPS = % of Promoters – % of Detractors.
For example, if 70% are promoters and 15% are detractors, the NPS score is 55. This score can range from -100 to 100.
This is why the Net Promoter Score may seem biased. The simple truth is that a company needs more promoters and fewer detractors, precisely what the NPS aims to measure.
Making the NPS score effective is not just about measuring the score; the goal is to transform it into a powerful metric for actionable insights and continuous improvement. While this may seem obvious, the ultimate aim is not merely to gauge the NPS score but to leverage it for enhancing company operations and performance.
The objective is to elevate the entire customer base to higher satisfaction levels. Transform detractors into at least neutral respondents, move neutrals towards becoming promoters, and ensure that promoters remain advocates. There are various strategies to achieve this. The NPS serves as a compass, guiding the company to fully engage in enhancing the customer experience for mutual benefit.
However, NPS is not without its challenges. Firstly, there’s the risk associated with small sample sizes, which can lead to high variations in the NPS score, especially when detailed by customer segments or other classification schemes. Secondly, the sample may inherit the bias of your existing customer base, posing a risk of not accurately representing the broader market. This risk is amplified when the NPS question is not uniformly posed across the customer base, such as asking it only after a transaction with a positive outcome.
To mitigate these challenges, it is wise to explore additional approaches to understand and learn from customers, such as interviews, surveys, focus groups, and other means that provide insights from a diverse range of customers beyond your immediate market presence.
To increase NPS and improve customer loyalty, companies should consider:
These practices not only improve loyalty but also reinforce solution perceived value, showing how customers experience your solutions compared to competitors.
The decision to utilize the NPS score is crucial. Measuring it is just a part of the overall effort to ensure substantial actions are taken to enhance the score. This investment is a long-term commitment that involves various functions beyond quality, including sales, marketing, manufacturing, service, and finance.
As mentioned, the NPS score primarily targets existing customers, recent or not. However, it shouldn’t be the sole method for gauging customers’ willingness to buy from your company. It is essential to explore other opportunities to gather insights from customers and competitors. The optimal approach involves a combination of techniques to understand customers beyond the NPS score.
This broader perspective connects directly to value creation, where promoter advocacy can be transformed into long-term growth.
Leveraging the NPS to gain deeper insights into customers can be achieved by adding a couple of qualitative questions alongside the NPS score inquiry. Typically, this involves a single or very few questions allowing customers to provide additional feedback on their NPS rating and aiming to capture recommendations for enhancing their experience. This approach combines the quantitative NPS score with qualitative information. However, it requires dedicated individuals to analyze and process the gathered feedback.
Concretely, this raises more questions than what the NPS is often used for—namely, evaluating transactional interactions with customers. Which questions will help you identify actions to improve the customer experience?
NPS survey tools and software platforms can simplify this process, but it is equally important to connect findings with market visibility, since customer advocacy strongly influences brand reputation.
While the NPS primarily targets existing customers, it’s essential to address other customer segments through dedicated market studies. Utilizing segmentation allows for measuring the NPS score across different segments, providing a more comprehensive view beyond chronological data.
When relying solely on NPS measurements, regular customer feedback becomes crucial in addressing ongoing issues and challenges. Monitoring social media for customer feedback can significantly enhance this approach. The feedback on social networks serves as the direct voice of promoters, neutrals, and detractors, presenting an opportunity to promptly identify and address concerns.
In summary, your most effective salespersons are your satisfied customers who naturally refer your products and solutions. Interestingly, customers are more receptive to suggestions when they are not in a purchase cycle, showing a heightened interest in learning about new products and solutions during this period. Strikingly, this is also when traditional salespersons are less effective because usually dedicated to active sales transactions. Hence, your customers emerge as your best salespersons. This underscores the importance of the Net Promoter Score (NPS) as a measure of customer loyalty and a driver of business growth.
For sales teams, these insights become practical when integrated into sales enablement and value selling strategies, helping align customer advocacy with revenue growth.
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Regularly engage internal teams to discuss how the NPS score can be made more efficient and action-oriented. NPS should be more than just a measure of customer satisfaction—it should drive meaningful improvements. Use workshops and team exercises, such as the frame in/out method, to gather a wide range of ideas and ensure everyone has the opportunity to contribute. Always ask the “why?” behind the score to better understand customer needs and identify actionable insights.
Segmenting NPS data by customer group—such as by demographics, behavior, or account type—can reveal hidden strengths and weaknesses, helping you tailor strategies to specific segments and uncover areas for targeted improvement.
Additionally, consider market research to reach customers who may not be covered by your current NPS process, ensuring a comprehensive view of customer sentiment.
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