Measuring your customers’ loyalty is vital for business growth. The best way to do this is by asking one simple question, allowing you to track your Net Promoter Score® (NPS).
Top brands all over the world use this metric and marketers are crazy about it. But what is NPS and why is it so important?
NPS is a metric that measures customers’ loyalty by asking one simple question:
How likely is it that you would recommend us to a friend or colleague? Where 0 is not likely and 10 is very likely:
So, why this particular question?
In 2003, Frederick F. Reichheld discovered that the likelihood of customers recommending your company to their network is correlated with the growth of companies.
When a customer decides to stick with your products, your customer acquisition costs are reduced. And what’s more, loyal customers tend to buy more products over time.
Finally, loyal customers talk up a company to their friends, family and colleagues. This is called “word of mouth” and is one of the most powerful marketing forms because individuals are likely to follow recommendations coming from people they trust. So, this is the reason why you should measure loyalty by asking customers whether or not they’re likely to recommend your company or products.
To sum it up, the NPS question can help companies gather insights about:
We have just seen that NPS consists of asking one simple question to your customers. It is important to allow customers to vote on a scale from 0 to 10, as this is the basis for calculating your overall NPS score.
A good way to ask customers for their score is to use online surveys that collect users’ insights right on your website or app. Online surveys have a high response rate because they require a small effort from participants and can reach a very high number of customers.
It is important to know whether your score is high or not, but it is just as important to know the reason behind your score. One of the best practises when asking customers to give their rating is to add a follow-up question, typically “why did you choose this rating?”. By adding this follow-up open-ended question, you will understand how your customers feel about you – one way or another.
With a broad question like this, you will get actionable and detailed feedback from your customers.
As mentioned above, the rating in the NPS question goes from 0-10 while the NPS ranges from -100 to +100.
Based on the different scores, customers are split up into three groups: promoters, passives and detractors.
Once you have calculated the percentages of promoters and detractors, you can calculate your NPS:
NPS = % Promoters – % Detractors
The higher your NPS is, the better. Since the lowest possible score is -100 and the highest is +100, a score above 0 is already considered good. A score above 50 is considered very good, while a score above 70 is excellent.
Please notice that your NPS also depends on the industry you’re operating in. Make sure you take into consideration industry benchmarks before drawing conclusions on your score.
NPS is much more valuable if you understand the reasons driving customers to give you a lower score rather than a higher one.
Try to make sense of the answers you have gathered from your follow-up questions. In other words, try to isolate the most common pain points from your customers. Are lots of customers mentioning your interface design as the reason for the low score they’re giving you? Or are they giving you a high score because of your excellent customer service?
Most businesses are interested in specific customer segments. It can be a good idea to include some sociodemographic questions in your survey and not only the NPS question. This way you will get an exhaustive understanding of how different segments rate you and e.g. understand if the customers more valuable to you are promoters or detractors. You can also build customer personas to better isolate valuable customers with a specific profile and NPS.
You should always know, at any time, what your current NPS is. Keeping track of your customers’ loyalty is a great way to check customers’ reactions to new changes such as product or feature launches. It is also a good index to measure if you are improving or not.
UserReport offers a survey widget that can be implemented on any website or app. In this survey, you are able to choose whether to ask predefined questions or create your own ones more directly related to your brand and offerings.
One of the predefined questions UserReport offers is the NPS question. This means you can easily measure your NPS on your website or app without thinking about question formulation or answer options. What’s more, the NPS question comes with a follow-up question, allowing you to also collect feedback from users who gave you a score.
Once results are collected, you will access the NPS report, where you can immediately see your overall score and how many promoters, passives and detractors you have. Also, you can track your NPS over time and monitor how one period differs from another. Check out the video below to explore the NPS report:
Installing and activating UserReport is easy. Once you’ve created a free account, you will need to add some basic information about your website or app. You will then get a small piece of code which should be implemented on your website or app. Once the survey is activated, you will be able to access the results you’ve collected in the reporting interface.
Try the new UserReport interface and start tracking your NPS now!