Net Promoter Score: Why You Need to Know Yours (and How to Use It!)

November 13, 2018

This guest blog was provided by Julia Clem, a member of the marketing team at Best Pick Reports

In service-related industries, happy (and loyal) customers are your best form of advertising. And while you may feel like you have a good pulse on your customer satisfaction levels, you’d likely be surprised at how many people simply don’t speak up when they aren’t completely satisfied.

Most people avoid conflict, especially if the project is finished and they’re mostly pleased with the outcome. But if your crew neglected to fully clean up the job site or forgot a seemingly small detail, your clients will probably mention that error to their family members, friends, and neighbors.

This negative feedback’even the casual, offhand comments about something relatively small’lowers the likelihood that the people in your customers’ network will hire you. And this decrease in customer loyalty means that your Net Promoter Score probably isn’t as high as you’d like it to be.

Not sure what a Net Promoter Score even is? Let’s take a look.

What Is a Net Promoter Score?

Your Net Promoter Score (or NPS, as it’s more commonly called) is a number that indicates the loyalty of your client base. If the majority of your customers are over the moon about your company and the work you do, they’re likely to tell their friends, family members, and coworkers about you. This usually translates to more work, higher revenue, and a high NPS score for your company.

Calculating NPS

Your company’s NPS is easy to calculate. In fact, it’s based on answers to one question:

On a scale of 0 to 10, with 0 being highly unlikely and 10 being highly likely, how likely are you to recommend [company name] to a friend, family member, or coworker?

Here’s how to view the results:

  • Scores of 9 and 10. These customers are your Promoters. They’ll continue to use your services and recommend you to people in their social circle.
  • Scores of 7 and 8. These folks in the middle are called Passives. They were satisfied with your work, but they don’t feel any loyalty to your company. They won’t hesitate to use a different company next time.
  • Scores of 0 to 6. These customers, known as Detractors, were unhappy with their experience with your company and won’t be return clients. This group has the potential to harm your company’s bottom line by discouraging their social circle from hiring you.

Your NPS is the percentage of Detractors subtracted from the percentage of Promoters. The result will be a number between 100 and -100, and it shouldn’t be expressed as a percentage’NPS scores are written only as whole numbers.

What Is a Good Net Promoter Score?

There really isn’t a hard and fast answer to this question, mostly because every company and every industry is different. From a purely mathematical standpoint, any NPS above 0 is good’even a score of 1 shows that you have more happy customers than displeased customers.

But are you going to be happy with an NPS of 1? Probably not. On the other hand, a score of 100 isn’t a reasonable expectation. No one is perfect.

View your score through this rubric:

  • A score between 0 and 50 is good. Really, truly. Is there room for improvement? Of course.
  • A score between 50 and 70 is excellent. You’re clearly doing a lot of things right.
  • A score between 70 and 100 is outstanding. Your company and customer service are first-rate.

How Do You Use NPS Data?

While your company’s NPS gives you a sense of whether your customers are willing to recommend you, there’s not a whole lot you can do with that number alone. So, if you want more information, what’s your next step? And if you’re not happy with your score, how can you improve it?

The answer to both of these questions is the same: Solicit detailed feedback from your customers via third-party customer satisfaction surveying.

If your NPS is low, a customer survey can help you determine areas of your business that need improvement.

If your NPS is high (or is a number you’re happy with), you should still proceed with a customer survey. The details you gather from the survey will help you understand what you’re doing right. This information can be used to create or enhance training manuals and onboarding procedures.

The importance of a customer feedback survey

As your company completes jobs, you’ll probably hear from customers who experience major problems with the crew, the quality of work, or other issues, but the people in the middle (those who are neither thrilled nor unhappy) may not get in touch.

These Passives’the people who are mostly satisfied with your company but aren’t likely to hire you again’may not alert you to the issues they experience. Some of your Detractors might stay silent too. The job will end, the invoices will be paid, and you’ll never hear from them again.

This is unfortunate, because many of the issues that your less-than-pleased customers experienced are probably easy to fix.

The important takeaway here is that you don’t know what you don’t know. Any blind spots that you have about your business or your customers’ experience will hurt you, which is why customer feedback surveys are so important.

Designing a successful client satisfaction survey

Gathering customer feedback doesn’t have to be difficult or especially time consuming. In fact, shorter surveys are typically more successful. No one wants to answer a 50-question email survey or talk to a telephone surveyor for more than a few minutes, after all.

Here are a few tips for a great customer survey:

  • Include your NPS question early in the survey. This increases the chance of an answer from people who are likely to abandon an email survey or who are anxious to get off the phone.
  • Keep it short. Aim for no more than 10 to 15 questions.
  • Include people who didn’t hire you. If someone chooses another company, it’s helpful to understand why. Be sure to include prospective clients and those who only requested estimates in your list of survey recipients.
  • Don’t let negative feedback slip through the cracks. Follow up immediately on reports of negative customer experiences. When you address problems promptly, you have a better shot at retaining a customer who might otherwise go elsewhere.
  • Use a third party. Customers are far more likely to give honest feedback to someone they don’t know and who is not connected to your company.

Regardless of your exact score, a well-designed customer survey is the best way to move forward with your newly gathered NPS data.

The Bottom Line

Net Promoter Score is a helpful piece of information to have, but what really matters is what you do with it. Your customers are a wealth of information about what your company is doing well and where it could improve, so don’t be shy about asking for their help.

To learn more about how Best Pick Reports utilizes consumer satisfaction research to evaluate performance, visit their Website today.

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