Hey everyone, Sara here from GetFeedback. Welcome to another episode of Simplifying CX.
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Today I’m going to go over the basics of the Net Promoter Score, also known as NPS, which is one of the most popular customer loyalty metrics.
First, I’ll explain why NPS is important. Then I’ll go over how to measure it. Lastly, I’ll explain how you should use the Net Promoter Score metric.
Net Promoter Score is a customer loyalty metric used by companies to evaluate the overall customer relationship and end-to-end experience.
NPS is quite popular in executive circles because it’s easy to understand and communicate the concept of increasing advocacy.
It’s also the most commonly used metric overall—by 83% of CX programs, according to CustomerThink.
OK so how do you measure it?
Net Promoter Score (NPS) asks the question: “How likely are you to recommend us to a friend or colleague?”
The respondent ranks their likelihood on a scale of 0 to 10—0 being highly unlikely, 10 being extremely likely. You can also add an option for the respondent to leave a comment and explain his or her rating.
On the rating system, people who select 9 or 10 on the NPS survey are considered Promoters, people who select 7 or 8 are Passives, and people who select 6 or below are Detractors.
NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters.
A score above 50 is excellent, and any score that is 75 and above is considered world-class.
The Net Promoter Score is a relationship metric. As a relationship metric, the NPS survey should be sent out annually and every 90 days to gather an overall assessment of how customers perceive the brand, its products, services, and support delivered.
NPS is not a touchpoint metric like CES and CSAT, which is why it’s important to use all three metrics in your CX program to get a full view of the experience.
Also, keep in mind that NPS has some technical challenges because it’s calculated by subtracting two percentages. This means that two companies can have the same NPS score, but quite different compositions of Promoters and Detractors.
For example, an NPS of 20% can be achieved with 60% Promoters minus 40% Detractors or 25% Promoters minus 5% Detractors.
In summary, the Net Promoter Score is used to measure long-term customer satisfaction and loyalty. It’s a big-picture metric.
For a complete guide on how to use the NPS metric, click on the description section of this video.
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Until next time!