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How Net Promoter Score Unleashes Your Company's Growth Potential

Updated: Apr 8, 2023


Tracking a Net Promoter Score is an established method for uncovering the key to customer loyalty. It's something I used over 15 years ago working for a franchise system that after implementation more than doubled its number of units in a short period of time.


With technology and so many different platforms available to gain customer feedback, the NPS can be overlooked nowadays. However, a key difference is that this is an internal system that is counted on to be reliable so that it can lead to improvements in the business.


Let's revisit what a Net Promoter Score is and why it can be useful for any company regardless of size or industry.




A Net Promoter Score (NPS) is a customer loyalty metric used by businesses to gauge their customers' overall satisfaction and predict the likelihood of their recommending the company's products or services to others. NPS has been a popular tool for companies of all sizes, as it provides a simple, easy-to-understand metric that can be used to make strategic decisions and drive improvements in customer experience.


NPS is beneficial to companies for several reasons:

  1. Simple and easy to understand: NPS reduces complex customer feedback data into a single, straightforward number.

  2. Benchmarking: Companies can compare their NPS to industry averages or competitors to understand their relative performance.

  3. Predictive of growth: A high NPS often correlates with increased customer loyalty, positive word-of-mouth, and business growth.

  4. Identifies areas for improvement: Analyzing NPS data helps companies identify areas where they can enhance customer satisfaction, leading to increased retention and new customer acquisition.


To implement a Net Promoter Score system leveraging digital capabilities, follow these steps:

  1. Develop a survey: Create a short survey that includes the NPS question: "On a scale of 0-10, how likely are you to recommend our company/product/service to a friend or colleague?" (Optionally, add one or two open-ended questions to gather qualitative feedback.)

  2. Select a digital platform: Choose an online survey tool or customer feedback management software that offers NPS functionality. Some popular options include SurveyMonkey, Qualtrics, and Delighted.

  3. Distribute the survey: Share the survey with your customers through various digital channels, such as email, social media, or in-app notifications. Make sure to target a representative sample of your customer base to obtain accurate results.

  4. Analyze the data: Calculate your NPS by subtracting the percentage of detractors (customers who rate 0-6) from the percentage of promoters (customers who rate 9-10). Passives (customers who rate 7-8) do not directly affect the NPS score. NPS can range from -100 (all detractors) to +100 (all promoters). Determining a good NPS score can vary significantly across industries; however, a score above 0 generally indicates that more people are likely to recommend your company. Familiarizing yourself with industry-specific NPS benchmarks is crucial for long-term success.

  5. Segment the data: Segment your NPS data by factors such as customer demographics, purchase history, or product usage to identify trends and areas for improvement.

  6. Close the loop: Follow up with customers who provided feedback, especially detractors, to understand the reasons behind their ratings and address their concerns. This will demonstrate your commitment to customer satisfaction and can potentially turn detractors into promoters.

  7. Monitor and improve: Continuously monitor your NPS and use the insights gained to drive improvements in your products or services. Regularly reassess your NPS to track progress and adjust your strategies as needed.


By implementing a Net Promoter Score system using digital tools, businesses can gain valuable insights into customer satisfaction and loyalty, enabling them to make data-driven decisions that lead to growth and success.


 

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Tom Fragala
Tom Fragala
29 mars 2023
Betygsatt till 5 av 5 stjärnor.

🌝

Gilla
Funder Intel Staff
Funder Intel Staff
30 mars 2023
Svarar

Thanks Tom!

Gilla
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