In today’s world, a business must sell constantly in order to retain customers and obtain new ones. Afterall, keeping customers happy is the key to customer success management – and ALL companies seek growth. The Net Promoter Score is a simple one to two minute survey metric that can stimulant substantial growth for a business, by way of measuring customer satisfaction.
This simple relationship survey was introduced in 2003, and measures overall customer satisfaction and loyalty based on the how inclined a customer might endorse a business to others. NPS asks a simple question: How likely are you to recommend our business to a friend or colleague? The person answering the survey will then rank how likely they are – on a scale of 0 to 10. A score of 0 would infer that they are highly unlikely, and a score of 10 would mean that they are extremely likely. This makes it a good way for businesses to measure their performance compared to their competitors.
The NPS approach is mostly meant to measure customer loyalty to a company. How likely will a customer buy again? How likely will that customer recommend you to others? And lastly, how likely will that customer repurchase or cancel their subscription or membership to your company? This information is essential, because as we know – it is much less expensive to retain a customer than it is attain a new one. In fact, acquiring a new customer can cost five times more than retaining an existing customer. Increasing customer retention by 5% can increase profits from 25-95%.
Since the question is counted only on a scale of 0-10, the Net Promoter Score is not complex, which is a primary benefit of the survey. The key take away is how likely are they to recommend, which is the single metric that can be measure and tracked weekly or monthly. This gives a business the chance to change a negative impression on an ongoing basis.
NPS is also extremely user-friendly. You are able to conduct the NPS surveys in at kiosks on site, by phone, email or online. The responses can be quickly be calculated so that your business can measure their performance on a daily ongoing basis, thus enabling you to easily share with your team as well. And since the survey only takes a minute or two of time to complete, it makes it fairly easy to get your customers to engage.
When companies evaluate their NPS scores and start to study these as key metrics, it allows them to hone in on their customer service efforts and increase revenue substantially by retaining customers and encouraging referrals.
NPS is a fabulous tool to have for obtaining customer feedback, but the most important thing to remember is that NPS shouldn’t be a worthless pride metric. It should be used as a stepping stone for refining customer service, and transforming customer experience into a vital part of your company culture!