Word-of-mouth is one of the most powerful forms of marketing. In fact, 92% of consumers trust recommendations from friends and family over paid advertising. Marketers can guide these conversations by pinpointing who their promoters are using an NPS® or Net Promoter Score℠. In this blog post, we’ll explain what is NPS and why marketers should care.
What is NPS?
NPS, or Net Promoter Score, is used to measure how likely your customers are to recommend you to a friend or colleague. The survey results allow you to categorize your customers into those who are willing to promote your brand and those who could cause harm to your brand.
Businesses can use the NPS results to measure, evaluate, and improve customer loyalty. When compared to the other customer experience metrics, NPS is the go-to measurement to understand how customers feel about your brand overall.
How to Measure NPS?
An NPS uses a single question to gauge how likely your customers are to recommend your brand to others. The question may look something like this: “On a scale of 1-10, how likely are you to recommend our business to a friend or colleague?” Your customers will respond with 1 being least likely to recommend and 10 being most likely to recommend.
Based on the response your customers give, they’ll be placed into one of three categories:
Customers who respond to the question with a 9-10 are considered promoters. These are your loyal customers who are enthusiastic about your brand. They’re the ones who will tell their friends, family, and colleagues about your business without prompting.
Customers who respond to the question with a 7-8 are considered passives. These customers are indifferent about your brand. This means they could become promoters or become the opposite and leave you for another brand.
Customers who respond to the question with a 0-6 are considered detractors. These customers are unhappy with your brand and could switch to another brand at any moment. Not only can you lose them, but they’re also more likely to cause harm to your brand by sharing their negative experience.
How to Calculate NPS?
Total % of promoters – total % of detractors = Net Promoter Score
To determine your NPS, subtract the percentage of detractors from your percentage of promoters. The score will range from a low of -100 (all detractors) to a high of 100 (all promoters).
For example, let’s say 70% of your respondents are promoters, 20% are passives, and 10% are detractors.
Your NPS would be 60, which means there is a 60% chance that your customers will recommend you. It also means there is room for improvement with your passives and detractors.
How to Analyze NPS?
The NPS can be measured and analyzed with just one question. However, this only provides you with quantitative data. To understand the “why” behind your customers’ responses, you may want to ask additional questions.
These open-ended questions allow your customer to share why they would or wouldn’t recommend your brand. This qualitative data can help you understand what areas of your business may need improvement.
Try adding these questions to your NPS survey to gain insights into your customers’ responses:
- What can we do to improve your experience?
- What product/service do you enjoy and use the most?
- What was missing in your experience with us?
It’s also essential to track your NPS over time. Therefore, you should be surveying your customers regularly. This will allow you to understand what changes over time and where to make improvements.
Now we understand what is NPS and how to measure, calculate, and analyze it. Let’s take a look at why this is important for marketers.
Why Should Marketers Care about NPS?
The NPS metric is an excellent tool for all areas within a business. Today, we’re focusing specifically on how the NPS can benefit marketers. Let’s take a look at 5 reasons why marketers should care about NPS.
1. Provides a Foundation for Proof-Based Marketing
Proof-Based Marketing is a modern marketing strategy that relies on testimonials, reviews, and word-of-mouth to build trust with prospects. Consumers don’t want to hear promises. They want to see proof. Proof that your products or services do what you claim they can do.
Measuring your NPS provides you with the opportunity to connect with your promoters. Your promoters are most likely already sharing their positive experiences with your brand. Try sending an email to request a testimonial or online review. You’d be surprised at how willing your customers are to share their experiences.
Once you have a collection of proof from your customers, you can use them in your marketing campaigns. Video testimonials are a powerful form of social proof. In fact, 77% of people were convinced to make a purchase after watching a testimonial video.
2. Identify Areas in Need of Change or Improvement
As we discussed earlier, it’s helpful to include follow-up questions to understand the meaning being your customers’ responses. You’ll gain insight into why your customers do – or don’t – recommend your brand by asking additional questions.
With this qualitative data, you can identify what areas of your business are doing well and where improvements are needed. This information can also be valuable for marketing campaigns.
3. Identify Characteristics of Your Target Audience
Depending on the questions asked in the NPS survey, you may be able to understand more about your customers. As a marketer, this will help you identify your target audience and draw in more leads.
To identify the characteristics of your target audience, you’ll want to include some demographic information in your NPS survey. These questions are easy to add in and give you insight into your loyal customers.
The data can then be used to target your marketing campaigns to audiences who fit the demographics of your loyal customers.
4. A User-Friendly Customer Loyalty Metric
The NPS metric is user-friendly for both the customer and business. From a customer’s perspective, the NPS survey is quick and easy to complete. Generally, the survey is short, with just a few questions. On average, the survey takes no more than 5 minutes to complete.
From a business’s perspective, the NPS provides you with valuable insights from a simple calculation. No need to worry about complicated formulas or confusing analytics. Plus, the data from one NPS survey can impact multiple areas within the business.
5. Track change over time
As a marketer, it’s essential to understand your customers. You can create marketing campaigns tailored to the right audience, based on your current customers. The NPS is an excellent tool to measure customer loyalty over time.
If you’re using an NPS survey, you want to collect responses at least twice a year. With regular survey data, you can identify trends and track the business’s performance over time. These trends include, but are not limited to:
- Changes in the business (e.g., staff, feedback-related, product)
- Internal (e.g., departments, teams)
Now that you understand what is NPS and why it’s important to marketers, we’d like to share how Boast can help!
How Boast Can Help
Boast offers an all-in-one platform for customer feedback, video testimonials, and online reviews. Our customer survey tool includes pre-built templates for NPS, CSAT, CES, and more. These templates are customizable so you can collect the data you need to get a pulse on your business.
Boast helps businesses implement NPS surveys so you can collect valuable data at the right times with ease. Our tool will help you identify your best customers and those at risk of churning.
Understanding what is NPS and how it’s beneficial to your marketing team is just the beginning. We recommend using an NPS software tool to manage your NPS data. Boast is just one option of many. These tools will help you set recurring survey dates and provide a platform to manage all your data.