Think about a time you had a bad customer experience. Maybe it was an hour-long wait on hold with your cell service provider. Or maybe you ordered a defective product and didn’t get proper customer support.
Chances are, if you’re unhappy — you’ll vent about it! “I had the worst experience with X” or “Whatever you do, don’t buy Y from X.”
At the LEAST: you certainly won’t recommend the business or product to a friend!
But, if you had a great experience with a certain company, you won’t spread negative word of mouth. You might gush about your experience and recommend their services to a friend.
How can companies assess whether their customers are loyal? How can they know if customers would recommend the company to a friend? Turns out, there’s a metric for that: net promoter score!
What is Net Promoter Score?
Net promoter score (NPS) is a metric that measures customer experience and loyalty. Fred Reichheld, an expert in loyalty economics, created the net promoter system to measure how likely a customer is to recommend a company, product, or service to a colleague or friend.
Contact centers measure NPS by giving their customers a survey. NPS surveys entail only one question:
How likely is it that you would recommend [Name of Company, Product, or Service] to a friend or colleague?
Customers answer on a rating scale of 0 and 10.
- 0 is the lowest: not at all likely
- 10 is the highest: extremely likely
Contact centers can categorize customer answers into three categories:
- 9-10: Promoters are loyal customers and recommend the company to friends and colleagues regularly. Promoters also make up the company’s biggest spenders and make up 80% of a company’s referrals.
- 7-8: Passives are satisfied but not as enthusiastic as promoters. They might recommend a company to a friend. But, they’re just as likely to switch companies after seeing a competitor’s ad!
- 0-6: Detractors are unhappy customers. They’re likely to spread negative word of mouth about a company to friends and colleagues.
After a contact center has gathered a sufficient number of customer responses, they can start calculating their net promoter score.
How to Calculate NPS.
Calculating your net promoter score is easy. All you have to do is subtract the percentage of customers who are detractors from the percentage of customers who are promoters.
NPS Calculation = % of Promoters - % of Promoters
NPS scores are numbers between -100(lowest) to 100 (highest).
Why is NPS so Important?
Net promoter score is vital to business growth. It helps companies to:
- Identify areas in the customer experience that need improvement
- Helps create more promoters and boost referral marketing
- Improve processes, products, and customer service
- Helps target customer strategies for detractors
Net Promoter Score: Dos & Don’ts.
DO provide a field for customer comments.
Qualitative feedback is gold, especially when it comes to evaluating customer service. While NPS scores are great for quantifying the customer experience, a simple score doesn’t tell the whole story.
Let customers expand on their feedback by offering a text box with the NPS survey. Combining quantitative and qualitative data is the best way to understand your audience and their expectations.
Quantitative data refers to numbers and scores, while qualitative data takes the form of anecdotes and written responses.
DO track NPS by department, agent, or product.
NPS can inform changes for customer service, products, departments, and entire companies! Experiment and calculate NPS among different branches of your company.
For example, NPS might be lower for one department than another. You can focus your improvement on the department that needs it to save costs and time.
DO take action with your NPS findings.
If you calculated NPS scores across your call center, that’s great news! Your work isn’t finished, though. Your actions in response to NPS will power improvements to your call center.
One action might be to invest in technology. For example: if customers voice dissatisfaction with long wait times, consider adopting call-back technology. This will shorten wait times and give customers autonomy in opting for a call-back.
DID YOU KNOW?
Voice Call-Backs shorten wait times, while offering your customers the option of a call-back over waiting on hold.
DON’T treat NPS as a one-time project.
Companies evolve over time, and so does customer experience. Tracking NPS only once every couple of years doesn’t tell you anything about your customer experience past the survey time. Calculate NPS frequently to understand how your company is supporting its customers. This could be once a quarter, or bi-annually depending on your business’ needs.
This approach will let you measure performance over time and chart areas of improvement. For example, let’s say you calculated a poor NPS at the beginning of the year, and you took action to try to improve it. Calculating NPS again at the end of the year will help you understand which tactics worked, which didn’t, and inform your customer service strategies moving forward.
DON’T ignore detractors.
Unhappy customers deserve your attention just as much as happy customers – maybe more. If you learn that a customer is a detractor, don’t ignore their experience. Instead of writing it off as a loss, take time to communicate concern and care to these individuals and show them that you’re willing to improve their experience.
While not all detractors will return to your business, you may be able to regain the trust of a few individuals. Ultimately, if your business is able to demonstrate its willingness to take constructive feedback and act on it, you’ll have a much better chance of earning customer loyalty in the future.
DON’T use the same strategy for every customer.
Your customer base is diverse, filled with different people with different needs. Treating them all the same may seem like a good plan on paper, but in reality this approach can backfire.
Creating customer profiles based on location, history of interactions, and other categories can help you engage your audience more effectively. Use NPS to create tailored strategies for different customers based on their feedback.