What is Net Promoter Score or NPS?

Net promoter score (NPS) – the gold standard of customer experience metrics

NPS is a customer loyalty and satisfaction measurement taken from asking customers how likely they are to recommend your product or service to others on a scale of 0-10. You measure loyalty and customer satisfaction of a business. It is measured on a scale from 0-10 based on customers’ subjective assessment of the probability of a recommendation to a friend or colleague. It is claimed that there is a correlation between development in NPS and development in turnover.

Net Promoter Score

What does a loyal customer or employee do?

Your most loyal customers and employees are easier to keep. They are often ambassadors who give recommendations to other potential new customers or employees. Therefore, NPS is a simple and effective method to identify the proportion of those you have contact with who are ambassadors, compared to those who are more negative. The logic behind this is that what you do that both increases the proportion of ambassadors and reduces the proportion of negatives, will contribute positively to your company’s financial results.

How can you take advantage of NPS in your business?

The challenge in customer dialogue is an increasing volume across different channels , together with an ever-increasing demand for speed in dialogue. How can you best organize yourself to leverage NPS, work across different channels, work faster and at the same time gather data for valuable insights that lead to meaningful change?

NPS measures customer loyalty

The method (NPS) was developed by Fred Reichheld, Bain & Co and Satmetrix . They launched the method in 2003 . The result from the Net Promoter Score or NPS Score method is used by several companies as a KPI to measure development in a digital customer satisfaction, or how well we handle customer feedback across all channels. Socialboards are an example of how you can better enable yourself to work actively with your NPS Score, by gathering all inquiries in one inbox .

Socialboards’ customers are among the companies in Norway that take customer service very seriously, gain increased trust and spend a lot of resources on customer satisfaction. They use NPS Score actively in their development work. We want to be an inspiration and resource for working with the NPS method where you work.

How does the Net Promoter Score or NPS Score work?

NPS is designed to be simple. Both to answer, handle, follow up and analyze.

Your customer is asked one question in addition to a follow-up question. The first question can be designed as follows: “On a scale from 0-10, how likely is it that you recommend us (read your business) to others?”

The answers are divided into three categories:

  1. 9-10: You are happy and recommend us to others. (If you want to recommend us, what do you want to emphasize?)
  2. 7-8: You are satisfied, but will not recommend us further.
  3. 0-6: You are not satisfied and may not want to cooperate with us.

The next question is asked to everyone who has answered the first question: “In order for you to be even happier, what is the most important thing you think we should get better at?”

How do I calculate the NPS Score?

The NPS Score is calculated as follows: You take the percentage that recommends (category 1) and subtract the percentage that is dissatisfied (category 3) for a certain period. Let’s say 35% say they will recommend you further and 15% say they are dissatisfied. Then your NPS Score is 20 in that period (35-15 = 20).

How do I analyze the NPS Score?

We recommend that you define periods that make sense to you, whether it is week, month, quarter, year, season, special events or other ways to limit time. Accruals make it possible to compare data across periods, based on comparable criteria. Perhaps you should compare a week with another week (eg previous week, corresponding week in previous month or previous year), instead of comparing with a randomly selected month. It may also be wise to define levels on the NPS Score you are happy with and what you are not happy with, so that you can always react if the level is outside what you consider acceptable, good or desired.

What is the value of the NPS Score?

NPS Score is an indicator of how and how well your business meets the customer’s needs every time the customer contacts you. If there is a correlation between NPS Score and revenue development, the reporting will help you with measures to ensure:

  • More satisfied customers
  • Increased turnover
  • Correct incorrect customer service faster
  • Detect deviations that have a negative effect and ensure that they appear quickly in customer service
  • Faster customer-driven product and service development via the principle of harvesting low-hanging fruit
  • Better development of a collective memory in how we develop products and services in the future

Be inspired by how others use NPS. You can download Satmetrix’s NPS Benchmarks here .

Socialboards work every day to make it easier and faster for you to understand how to constantly optimize your customer service . Feel free to contact us today if you want help with your customer service optimization .