Net Promoter Score, or NPS, is a customer loyalty and satisfaction measurement derived from asking customers how likely they are to recommend your product or service.
This proven metric can provide the core measurement for customer experience and can be correlated with predicting business growth.
When your company’s NPS is high, you can be assured that the user experience is positive particularly when used for customer acquisition or onboarding.
NPS is a valuable metric on a strategic level and the overall NPS system is important because it allows businesses to:
- Ask follow-up questions as part of the standard NPS survey, by giving customers the opportunity to share why they’ve given a specific score
- Gives a clear picture of what your business is doing well or how you can improve
- Track and quantify a score over time, creating internal benchmarks
- Use this as a customer experience tool to achieve a critical objective – earning more satisfied customers
Net Promoter Score (NPS) is calculated by asking customers one question: “On a scale from 0 to 10, how likely are you to recommend this product/company to a friend or colleague?”
Data from this question helps businesses improve upon service, support and delivery.
How does LABform capture and use Net Promoter Score?
LABform has Net Promoter Score capability out of the box to capture feedback from individuals using the LABform onboarding process.
When one of your customers uses LABform to apply for an account with your business we will capture their sentiment at the end of the application process.
As LABform digitises your onboarding process, NPS is a valuable feedback tool to highlight areas to improve your customer acquisition process and to collate valuable insights from real users. We can aggregate these insights and provide back to you via dashboards, success metrics and regular account reviews.
Net Promoter Score scale: detractors, passives, promoters
In the Net Promoter system, customers are categorized into three groups—promoters, detractors, passives—depending on how they answer the standard “how likely are you to recommend us” question:
Promoters (score of 9 and 10) represent a company’s most positive customers: these people are likely to act as brand ambassadors, enhance a brand’s reputation, and refer your company.
Detractors (score of 0 to 6, included) are unlikely to recommend a company or product to others and could actively discourage potential customers away from your business.
Passives (score of 7 or 8) are not actively recommending a brand but are also unlikely to damage it with negative word of mouth. Although they are not included in the NPS calculation, passives are very close to being promoters. This feedback is invaluable in improving the customer acquisition process.
How to interpret Net Promoter Score
NPS is always expressed as a number from -100 to 100; the score is negative when a company has more detractors than promoters, and positive in the opposite situation.
In the Net Promoter system, average scores vary greatly between industries:
Knowing NPS averages by industry helps to understand how key competitors in a specific market are doing and gives extra context to what counts as a ‘good’ or ‘bad’ score.
You can read about industry averages in Financial Services for NPS here.
How else can NPS be used for your Business?
Trust is paramount when acquiring a new customer and positive reviews and sentiment have been proven to drive business growth. When a customer is identified as a Promoter, you can not only use this for internal review, but give the customer the opportunity through email automation to provide a public review of your product directing them to your chosen platform such as Trust Pilot or Google Reviews.
You can also identity Customer Loyalty and aim to reduce other metrics such as churn rate by directly focusing on increasing your Net Promoter Score and a positive user experience.
For more information on Net Promoter Score, digital customer acquisition and LABform contact us at email@example.com