What Does NPS Mean? A Marketer’s Guide to Net Promoter Scores

With the induction of the digital age, many businesses are pouring over $500 million dollars into their businesses. This is to improve their NPS scores and their workflow.

But, what does NPS mean, and how important are these scores? This short comprehensive guide will give you all the ins and outs of understanding NPS scores.

What Is a Net Promoter Score?

The Net Promoter Score is a familiar term to professionals working in the business. But what exactly does this mean? The industry acronym, known as NPS, is a popular metric for rating customer experiences.

This system puts customer user value into the hands of the consumers. This is part of the core understanding of customer service valuation. This concept circles around consumers recommending a company. 

NPS is a system of measuring a company’s worth, it follows the likelihood of receiving returning customers. It tracks these customer’s recommendations of companies. So, overall this market generates a score that reflects customer satisfaction.

Customer Satisfaction Metrics

First, let’s discuss the direct system of measurement under the NPS design. This starts with asking a single question to all customers. This question asks how likely are they to recommend the said business to a person or relative.

There is a specific range of numbers that The customer response scale ranges from zero to ten. The customers choose which number best represents their satisfaction with the business.

The Lowest Score is 0 and represents the response “not at all likely”. While 10 represents the customers’ peak satisfaction at “extremely likely”.

Among these answers, businesses rank each customer in a different category. All customers’ answers ranging from zero to six, known as detractors.

Any customer selecting either 7 or 8 falls into the passers category. The top customers selecting either 9 or 10 fall in the promoters section.

The NPS is calculated by acquiring the exact percentage of promoters. You then separate this group by subtracting this percentage of detractors.

Afterward, you take the result and multiply it by 100. This whole number will fall somewhere between-100 to 100. 

NPS Score and Customer Value

The NPS is broken down into an equation that can provide the customer score rating. The number itself does not perpetuate the power of the system. The number is not the main focus of the rating system.

The overall goal of the NPS value system is to detect and understand why there are a certain amount of detractors. It also focuses on the issues that may cause an increase in these detractors.

It is also a mechanism that can identify a specific demographic of promoters. It can hone in on the group of promoters and understand what methods can improve upon this promoter score. This includes locating and defining what activities need repetition to gather more promoters.

Post-Survey Promotion

So we are looking to increase promoters and decrease detractors. But also, we want to understand the exact reasoning around the average user’s response.

You can also aid in determining the NPS score by providing a follow-up questionnaire. These follow-up surveys will asks questions such as: How likely are you to recommend this business to a friend or relative?

This follow-up question allows consumers to elaborate or expand upon their initial reasonings. It will not only answer what is lacking but why the consumer gave the specific score.

This question is not multiple choice. This is an open-ended question to allow consumers to give detailed answers reflecting their personal experiences.

The market research metrics are vital to improving upon the net promoter score. This is a core goal of gathering this data. The industry term for improving upon this score is called closing the loop.

This means connecting the dots to understand what is needed to turn detractors into promoters, thus closing the loop. This means reaching out to consumers that respond to the survey. It doesn’t have to be the entirety of the group, but a small sample of the consumers is an effective approach.

Companies tend to reach out to mostly detractors as it is a useful group to help reiterate the issues. It may be a successful improvement to understand and resolve the issues of the detractors.

It can also yield positive results to reach out to promoters to provide personal thanks for their business. It can help narrow down positive business practices by understanding their positive experiences.

Improve Net Promoter Scores

It is important to review what activities will help promote a better business. Understanding the situations that divide promoters and detractors can promote company health.

Companies must acquire the responses given and analyze the responses. This is done separately to narrow down the information. It’s important for users to compartmentalize each section’s demographics.

Dividing the data can help you examine what causes the rifts between these different businesses areas. It can allow companies to look at different customer segments and reach a conclusion on how to improve.

It is useless for a company to analyze scores unless they engage with the user rating. The company must take action according to what needs improvement. This comparison can you further understand the relationship between NPS and the user experience.

Once a company reviews the necessary data, it must establish changes. This involves a company prioritizing the necessary actions needed to improve upon the score.

What Does NPS Mean for You?

Many companies want to know: what does NPS mean? Basically, it means improving the customer experience by repeating this cycle. Reviewing the surveys and taking what aspects of the study need improvement.

Then, you consult with the right teams to help aid in the development of the company. Following these guides and listening to your customer fan base can help build an efficient company.

Check out more of our blog for extra information on NPS scores and how to improve upon your business!

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