How Knowing Your
NET Promoter Score Can Help You Grow Your Business

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Referrals are a treasured source of new business for many of today’s entrepreneurs. With a strong referral system in place, you could turn a good number of your sales into jumping-off points for new customers at minimal expense.

 

Before you can create a system to win more recommendations, however, you have to understand the numbers that govern your business’ marketability in the eyes of your existing customers. After all, your metrics are your guide to knowing whether your efforts are paying off or going to waste.

 

In this article, we’ll discuss one popular concept used to this end: NET Promoter Score (NPS). We’ll then proceed to walk you through the different ways you could use it to improve your business outcomes.

 

What is a NET Promoter Score?

 

In the simplest possible terms, a NET Promoter Score is a measure of how likely people are to recommend something (in this case, your business) to their friends and colleagues. Some use it to power other initiatives like customer segmentation while others treat it as an indicator of customer satisfaction—both treatments see common use among the world’s top businesses.

 

To find out their NET Promoter Scores, companies survey their customers using a single question. Usually, it looks something like this:

 

“On a scale of 0 to 10, how likely are you to recommend our product/service/company to a friend or a colleague?”

 

If a respondent answers 9 or 10, they’re considered promoters: customers who are likely to perform actions that benefit your business. They’re seen as likelier to refer you to their peers, leave positive reviews, or return to you for future purchases.

 

If a respondent answers 7 or 8, they’re considered passives: customers who are not likely to perform either positive or negative actions. They’re dead in the center of the spectrum, and will steer your eventual NPS to a neutral score of 0.

If a respondent answers a number from 0 to 6, they’re considered detractors: customers who are much less likely to perform beneficial actions. Don’t expect to see them recommending your business, and don’t be surprised if they leave negative reviews.

 

Take the percentage of your detractors and subtract it from the percentage of your promoters—then multiply the number you get by 100 to arrive at your NPS. Have a look at the following example to see how this might play out:

 

NET Promoter Survey Results

Survey

Response

# of Respondents

Percent of 

Sample Size

0

143

11.38%

1

44

3.50%

2

35

2.78%

3

10

0.80%

4

19

1.51%

5

80

6.36%

6

74

5.89%

7

17

1.35%

8

184

14.64%

9

324

25.78%

10

327

26.01%

 

*Total respondents: 1257

 

In the above example, the surveyor’s NET Promoter Score would round up to 20 (51.79% minus 32.22%). The math makes it so that your score will always fall between -100 to 100.

 

Designing a NET Promoter System

 

Discovering your NET Promoter Score is easier said than done, and putting it to good use can be even more complex. It’s important to think systematically when working it into your business.

 

I. Tracking Your NET Promoter Score

 

When working with an NPS, you unlock the best options by keeping an organised, real-time view of your data. This means making sure that your survey question reaches as many customers as possible and keeping your collected data tidy and ready for analysis.

 

Most large companies that use NPS rely on software vendors for one-stop solutions that cover all stops from data collection to analytics and reporting. Smaller companies either go the diligent route and run these complex tasks on their own or look for an agency or consultant to handle the work.

In any case, large amounts of data will need to be captured using software (ex. SurveyMonkey, surveys baked into your website). They’ll also need to be cleaned and maintained as you run your calculations and try to convert detractors and passives into promoters.

 

II. Using Your Score

 

You can use your Net Promoter Score in a number of ways, each one benefiting a different aspect of your business.

 

First, you could treat your NPS as a high-level gauge of your overall customer satisfaction. It can be taken as a bird’s eye look at how well your products and/or services do the job in solving your customers’ needs. If you can manage to keep a real-time view of how your NPS changes over time, then you could use this as a baseline to monitor the impact of changes to your core offerings or customer service operations.

 

Your NPS is also a powerful tool for customer segmentation: breaking your customer base into groups that share common traits. You can group customers by their relative satisfaction with your products, or work backwards to spot commonalities among those who are highly satisfied, or highly dissatisfied for future marketing efforts.

 

Second, your NPS can be used in conjunction with referral programs. If you place a strong emphasis on encouraging customers to recommend your products to others, then your NPS could be taken as a measure of your efforts to convince your customers to promote your business.

 

Finally, it can help to use NPS as a way to steer your business’ culture. When you have a hard number that reflects how your business looks in the eyes of your customers, it becomes easier to convince your managers and staff to focus on your customers’ experiences. With the right set of management policies, you could translate this into better service and more pleasant interactions with customers all around.

 

III. Converting Passives and Detractors

 

Finally, one of the most exciting things that come from having a NET Promoter system in place is the opportunity to flag which of your customers could benefit from extra attention. 

 

When you’ve identified the least satisfied among your detractors, the people who handle your sales or customer care can reach out and attempt to address their concerns. We recommend paying the most attention to customers who respond from 0 to 2—lower numbers reflect more extreme disappointment that can lead to unfavourable outcomes if left unchecked.

 

The specifics of this deserve an article of their own, but let your biggest takeaway be the idea that any signals of customer satisfaction or disappointment should be acted upon.

 

Conclusion

 

While learning and using your NET Promoter Score can go a long way towards improving your business, getting there can be a long and arduous process. Dealing with a constant stream of data is no walk in the park.

At Emedia Creative, we specialise in helping businesses realise the benefits of complex processes. We work with tools like NPS to power our clients’ marketing and related operations. Contact us today to learn how our team of seasoned experts can take your business to the next level.

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