In this movie we will define What is NPS? And look at how to measure NPS. Your NPS or Net Promoter Score is a measurement of customer loyalty. It is very powerful in understanding the perception of your brand. We'll learn how this measurement came about and how you can put it into practice in your brand.
- Simply put, Net Promoter Score is a measurement of customer loyalty. A company's NPS is measured by asking one simple question. How likely is it that you would recommend brand or company X to a friend or colleague? Following the question is a consistent scale, with a range of zero to ten. Zero being not at all likely. Five being neutral, and ten being extremely likely. This simple question provides fantastic insight into customer loyalty and eliminates long and complicated surveys that most people ignore.
The idea was introduced by Fred Reichheld in 2003 through a Harvard business review article. Reichheld invested two years into research, linking survey responses with actual customer behavior. And the results revealed the true value of NPS. This one question about a customer's willingness to recommend a product or service reveals their true loyalty. Based on the score a customer indicates they'll fall into one of three groups, promoter, passive, or detractor.
A promoter would score a nine or ten. They're huge fans of the product or service and will go out of their way to advocate for it. Promoters will put their own reputation on the line. A response of seven or eight makes that customer passive. This person probably liked what you had to offer but there was no wow factor. They may have had a few issues or didn't see much value over you from your competition. A passive customer isn't likely to steer others away from your company, but they're not going to recommend it.
And, finally, anyone answering with a score of six or below becomes a detractor. Detractors are often more vocal than promoters because their level of dissatisfaction is incredibly high. And a detractor will take any chance they can get to push people away from your product or service. The ratings are then used to develop one numerical score. And this metric allows companies to quantify how changes to a product or service impact the customer experience over time. A score of greater than 50 is really good.
But you can do some research on NPS by brand or industry and see how it pans out in your specific market. The biggest takeaway here is that your brand needs to be working to secure loyal customers. Evangelistic customer loyalty is one of the most important drivers of growth. Loyal customers spend more over time, they churn less and they work to introduce the company to their friends, family, and colleagues. So, consider the advantage of evaluating your NPS. You can start by surveying a statistically valid sample of your customers with the question we talked about earlier.
How likely is it that you would recommend brand or company X to a friend or colleague? It's important to resist the urge to add additional survey questions. You need only one question to determine their status. Then introduce the scale from zero to ten along with the key for what the values correspond to and then collect the results. From there, calculate your score. You'll take the percentage of customers who respond with nine or ten and subtract the percentage who respond with zero through six. In other words, subtract the percentage of detractors from the percentage of promoters to arrive at your Net Promoter Score.
And don't be surprised if your score is lower than you expect. The median Net Promoter Score of more than 400 companies in 28 industries was just 16. You can conduct an NPS survey before your rebrand and see if the score changes after the rebrand. Or you can measure it over time to see how your brand is trending. There's a lot of online services that you can use to survey customers. Just run a Google search for NPS survey tools and evaluate the options to see which fits your needs.
Explore best practices for researching, developing, visualizing, and managing your brand, and learn about incorporating your brand throughout various customer touchpoints and keeping tabs on your brand as your company grows.
- Components of branding
- Creating a brand strategy
- Conducting a brand audit
- Crafting your vision statement and selling position
- Evaluating brand visuals, colors, and language
- Enhancing brand touchpoints
- Measuring brand loyalty and equity