NPS (Net Promoter Score): calculate wisely, apply the results

Much has been written about NPS (Net Promoter Score) calculation. It is rather hard to bring something new in these stories but I will still try. While reading loads of materials on NPS I understood that the key points we need to know to apply NPS in practice are still difficult to find.

So what is NPS?

NPS definitions which can be found on Internet are generic and obscure, so let me put it this way: if you want to know how much your customers love you, calculate NPS! This is the main thing, you hardly need memorized definitions like “the method to define customer loyalty…” and so on.

How to measure NPS?

It seems as easy as ABC. Following this method you ask your customers a question:”How ready are you to recommend our company to your friends?” Depending on the answer you divide the audience into three groups:

  • “critics” – people who will never, not for the world, recommend you to their friends. They may reduce your NPS, but they play an important role in measuring it, later I will explain why;
  • “neutrals” – the  customers who are either “occasional” for you or just neutral about your brand;
  • “promoters” – the customers who will gladly recommend you to their friends, which means they will provide you with a steady flow of new customers.

So, let us assume that you’ve obtained these indicators. What is next? Next we calculate NPS according to the formula: (number of promoters – number of critics) x100%=NPS.

Measuring NPS: pitfalls and nuances

While making a survey you should take into consideration some nuances. You should not forget that the survey must last long enough to receive representative results. As practice shows, as long as the number of interviewed customers is under 20%, the results may be deceptive.

If you run a survey via e-mail newsletters, the level of answers should be not less than 30-40%. Besides, the fact that makes me doubt is that, as a matter of principle, your letters are opened by more or less loyal customers, which means that you risk underestimating the number of “critics”. What can be done about this? Perhaps, I would advice you to add other channels than e-mail newsletters.

It is best to fix the respondents’ answers on the paper or electronically so that you could study each of them thoroughly.  Even better would be if respondents gave you their contact details so that you could obtain more detailed answers if you are interested.

How you can collect the answers:

  • if you are a café, for example, you most probably have a wi-fi page, make a survey there;
  • you can use your subscriber base and address to them by e-mail;
  • you can place a survey form on your website;
  • you can collect the answers offline if offline contacts with customers is a frequent phenomenon at your company.

Anyway, use all the possibilities to get the most precise picture.

We have calculated NPS. What does it mean and what to do with it?

This is where problems arise. You can find the information how to calculate NPS anywhere, but you will never (meaning almost never and nowhere) find out how to interpret the results and what to pay attention to. But this is what the blog is for – to give you such important information.

So, when interpreting the information, the obtained figure is not the most essential indicator. Feedback from your “critics” is what means a lot. Thanks to their opinion you can improve your service and increase your customer loyalty, on its base you can make necessary changes, find weaknesses of your company. In a nutshell, they give you directions and you understand where to move to become really customer-oriented. Don’t neglect analyzing your critics’ questionnaires, and if you have their contact details, contact them to obtain as much information as you can! If you manage to turn “critics” into “promoters”, they will become real defenders of your brand and the most loyal customers.

What level of NPS should you strive for?

It would seem that nothing can be more precise than figures, but considering NPS you understand that figures are ve-e-ery relative. Let’s assume that you found the NPS of your company to be 53%, but whether it is good or bad you don’t know. Let’s try some examples. The companies with the highest NPS in America* have the level of 70-85%. For example, NPS of amazon.com and Apple equals 70% and 72% respectively; and a bank branch of financial company USAA has NPS of as much as 87%. I found an interesting statistics on the average NPS across the niche and the NPS level  of a leader.

American companies.

Of course, 70-85% is a very high NPS, but as we see everything still depends on the niche. However, this doesn’t mean that you shouldn’t strive for catching up with the companies which have gained the highest possible level of customer loyalty.

Regularity is also very important in NPS measuring. By tracking this indicator trend you can estimate the quality of your work on loyalty and whether your efforts are justified or not. It is still hard to say what periodicity should be, it depends on the field you work in, on frequency of your interaction with your buyers, as people tend to visit cafes more often that buy sofas, don’t they?

via

Leave a Reply

avatar
  Subscribe  
Notify of

Recent posts

How to quadruple website traffic in the real estate niche in 8 months | Case Study

December 21, 2020

Marketing in the real estate niche has certain peculiarities. In this article, we share the case of Kampas, a Lithuanian online business and explain how SEO assets can help to increase visibility in the search results and quadruple the organic traffic! Check the whole story of cooperation on our website. Client Kampas.lt is a real Continue reading >

The future is here: a detailed overview of Google Analytics 4

December 18, 2020

The year 2020, among other things, has brought to the world the long-awaited Google Analytics 4, which is now officially released and available worldwide. What are the key changes and how Google Analytics 4 differs from Universal Analytics? Who will benefit from the transition to the new data model and how to get started with Continue reading >

How to enter a new market using PPC advertising | Case Study

December 1, 2020

How to enter a new market? This is the question lots of retailers who successfully promoted their products within certain regions frequently ask. Marketers tend to believe that display advertising is the easiest way to market a product when entering a new market. In this article, we share the case of an international player and Continue reading >

How to find expired domains: best places to buy expired domains with traffic

November 27, 2020

Imagine a perfect SEO world with traffic coming non-stop to a newly created eCommerce website or a related blog, with the backlinks placed right where you need them, relevant keywords carefully selected for your business and even with its name and the domain name known among the target audience. Making this real is possible with Continue reading >

Let's get the ball rolling

Please fill in this short form and we will be in touch with you soon

For any questions [email protected]

UK | USA | EST

+44 (0) 20 313 766 81
+44 7852 537715

Lincoln
The Terrace AT5,
Grantham Street,
LN2 1BD

+1 347 809 34 86

Las Vegas
6920 S. CIMARRON RD.,
Suite 100,
NV 89113

Tallinn
Roosikrantsi 2-K230,
Kesklinna linnaosa,
Harju maakond,
Tallinn 10119

CEE Ecommerce Report 2019

Based on the analytics data of 292 websites

enter correct name, please
enter correct e-mail, please

NPS (Net Promoter Score): calculate wisely, apply the results

0
start now

Start now