Are Net Promoter Scores Still Valid? Let’s Review

Net Promoter Score is a tried and tested metric that is being utilised by businesses all over the world, for the past 16 years. It simply refers to a customer’s likeliness in recommending a company. As most of us are aware, it is easier to secure a customer’s loyalty than attract a new one. If your customer seems as though he or she is willing to recommend you, that customer’s loyalty to your brand is guaranteed!

NPS was created by renowned business strategist and author Frederick Reichheld in association with an experienced think tank team from Bain & Company, the well known US consulting company. But what made NPS  ever popular was an article published in Harvard Business Review called “The One Number You Need To Grow”.

Sixteen years ago, NPS may have been that one number that helped businesses to grow, but today in 2022, is it still the valued metric it once was? Let’s discuss…

NPS – Asking The Right Questions

Net Promoter Score is a foundational business metric based on a simple question posed to existing customers. You may have seen it or asked it yourself –  ‘On a scale of 0-10, how likely are you to recommend our company?’

Though this sounds pretty straightforward, it offers consumer sentiment on a variety of aspects about your brand, product and company:

• How happy the customer is with your range of products and services
• If the customer is likely to continue purchasing additional products or services from your company
• If the customer is confident enough to recommend your brand, products or services to a new or potential buyer

These are valuable pieces of data that can help businesses to alter or grow their operations. They can direct a company in a particular direction and eliminate any guesswork regarding what its customers feel about it.  

Related: Why Listening To Customers Is The Key To Organization’s Succcess

However, to attain a deeper and wider view of customers and their sentiments, one should ideally follow NPS survey formats that ask follow up questions such as: 

1. Why the customer has given a particular score
2. What they like or dislike specifically
3. Areas in which the company can improve 

And so on….

Secondly, NPS surveys should be conducted on a regular basis. This allows companies to create benchmarks, gauge better and improve over time. 

How To Administer NPS Surveys 

Since Net Promoter Scores are based on customer answers to company questions, they need to be worked out based on consumer surveys. 

There are automated ways to conduct these surveys. 

• Through your website or app: Once a customer completes a purchase, an on-page pop-up survey can be presented for the customer to fill up. Here, you may also ask simple follow up questions, ending with a ‘thank you for your time’.  
• Through email: After a consumer buys something, send them a purchase confirmation email with a colourful 1-10 scale with the NPS question. This allows the consumer to fill out the survey in their own time, without placing any pressure. In this technique, you may also include a more detailed customer survey questionnaire that serves your purpose better. 

If you prefer to conduct an NPS-based survey over the phone, you may hire a customer support team to personally call every customer on your database and record their results. This can be a useful way to get NPS scores as it allows the agent to ask more relevant questions based on individual customer experiences. It also initiates closer relationships between your brand and customers. 

You may also like: Why is CPaaS Critical To Customer Experience? 

Categories Of Customers And Score

NPS results divide your customers into  3 definite categories. These are:

1. Detractors – Unhappy customers who don’t like you and are therefore definitely unlikely to recommend you and your services to others
2. Passives – Customers who like your company or brand but may not necessarily recommend you to others
3. Promoters – Happy, impressed customers who favour your brand, are willing to purchase from you again and recommend you to others

To work out your NPS result, all you need to do is minus the percentage of detractors from the percentage of promoters, to get a number that is your NPS.  Passives are usually ignored in this equation. An NPS of 50 and above is considered to be a good score.  Do note that it is possible to have a negative NPS. 

But as a company, if you wish to take your findings to the next level, it would be important to know the answers to questions such as:

• The reasons for detractors being unhappy
• How you can fix their issues
• Why are your passives not excited about your brand?
• Why are some customers happy and others not? 

Such investigations bring us to concepts such as customer segmentation, personalisation and paying more attention to the entire customer journey, for the desired CX levels. 

Certain critics have also highlighted the limitations of NPS in today’s age of advanced metrics, detailed tracking and realisation about consumer complexities. 

Conclusion  

So, are Net Promoter Scores valid?

The answer is Yes! 

However, the NPS metric is more effective if grouped with other tools.  Also, since the NPS is globally recognized, it makes it easier to compare with companies across sectors and locations. It’s simple to implement and even smoother to adapt and move into deeper feedback mechanisms. 

NPS is a reliable indicator of future prospects. In day-to-day functioning, if combined with a powerful CRM system, it can do wonders.  For small businesses and startups, NPS is a good starting point. It has its uses but relying merely on an NPS score, without exploring further and collecting specific data about your consumers, could prove to be less effective. 

If you would like assistance in finding your NPS score, contact us today!