The "Net Promoter Score" – All there is to know.
What is NPS?
The ‘‘Net Promoter Score(NPS)” is a management tool used by businesses to calculate the loyalty of their customers. The Net Promoter Score is an indication of how likely customers are, to recommend a brand to a third person. It is an easy to understand value, that can be shared with front line employees.
How do NPS systems work?
In general, NPS systems work on the established premise that customers can be divided into three categories – promoters, passives and detractors. It is based on a single question: “On a scale of 1 to 10, how likely are you (the customer), to refer the business to friends or family?”. The responses are divided into 3 categories:
- Score of 9-10: These are the ‘promoters’ who are loyal to the brand, and would recommend it to others.
- Score of 7-8: The ‘passives’, are satisfied customers who generally unenthusiastic and can be easily won over by competitors.
- Score of 0-6: The ‘detractors’ are the unhappy customers, who can cause serious damage by negative word of mouth.
Subtracting the percentage of ‘detractors’(net detractors), from the percentage of ‘promoters’(netpromoters), gives the final NPS score. It is a number that can be tracked and compiled regularly, not just for the whole business, but for each store, product, business or customer service teams.
How does calculating the NPS help the business ?
NPS score is used by many large organizations as a customer feedback tool. The balance between promoters and detractors, indicates a business’s potential for success. Measuring customer loyalty gives a better indication to whether a customer is likely to stick with the brand, or not. Accompanying the NPS question with one or more open ended questions, would help identify the reasons behind the given score. The NPS survey helps identify customers who need to be followed up with. It would let the business ‘intervene’, to learn more about the customers that provided feedback, to change a negative image, and even convert a ‘detractor’ to a ‘promoter’.
How does Geckolyst help improve NPS ?
Geckolyst uses NPS along with other industry parameters to get a more accurate reading on what customers think and feel. This helps in creating customer delight and preventing customer churn. Our tool primarily leverages customer satisfaction metrics, which in turn correlates your company’s revenue growth.