Keeping their customers happy and satisfied is the ultimate goal of every business owner. A satisfied and happy customer will be more loyal to your business. High customer loyalty can not only elevate your brand image but also help you to drive unprecedented levels of business growth.
Forrester predicted that in 2020, customer experience and customer loyalty are the best ways to drive business growth.”
When it comes to gauging and analyzing customer experience and customers’ loyalty towards a brand, the NPS is the leading metric that determines the loyalty of a customer to a business.
- What is the Net Promoter Score (NPS)?
- 5 Strategies to Drive Sales Using Net Promoter Score
What is the Net Promoter Score (NPS)?
Net Promoter Score (NPS) is the leading customer feedback metric that was incorporated by the leading management-consulting firm Bain & Company. It is being widely used to determine the loyalty of a firm’s customer relationships.
You can easily measure Net Promoter Score using Net Promoter Score Software to track the willingness of customers to recommend your product and service or your brand.
Net Promoter Score is measured through a simple question: How likely is it that you would recommend [Organization/Product/Service] to a friend or colleague? Customers range their willingness of recommendation on the scale of 0-10 and the NPS is calculated on a scale of -100 to +100. Based on their responses, customers are classified into 3 categories:
- Detractors (0-6 Score) – Detractors are those that rate between 0 to 6 on the NPS question and are likely to be disloyal to the brand.
- Passives (7-8 Score) – Passives are those that rate 7 or 8 on the NPS question and are said to be neither loyal nor disloyal to the brand and company.
- Promoters (9-10 Score) – Promoters are loyal customers who rate 9 or 10 on the NPS question. They are said to promote the brand to others.
How to Calculate Net Promoter Score?
There’s only one standard (and right) formula to calculate the Net Promoter Score, as laid out by Bain & Co. Based on how you conduct the NPS Survey, you can use various methods to derive to the Net Promoter Score. Let’s explore them below:
- Calculate Net Promoter Score using Excel
- You can also Calculate NPS using Online Calculator
- Calculate Net Promoter Score using NPS Survey Tool
The Net Promoter Score is calculated by subtracting the percentage of detractors from the percentage of promoters.
Net Promoter Score = % of Promoters – % of Detractors
Prevalence of the Net Promoter Score
Over the years, we have seen an unprecedented level of growth in the Net Promoter Score metric users. More than two-thirds of the Fortune 1,000 list currently use Net Promoter Score to determine customer loyalty.
Thousands of leading brands such as Apple, Intuit, G.E., and American Express began using NPS to measure customer loyalty and engagement. With such growing popularity, the Net Promoter Score has become the gold standard customer experience metric.
NPS doubles the growth of your business by focusing both on customer retention and prospects conversion. Net Promoter Score can drive more revenue to your business.
How Net Promoter Score enhances your Sales Potential?
NPS helps you to provide a reliable customer powered data but the significance of the NPS data is zero, until and unless it is not being converted into a proactive and the customer-driven approach.
So, if you want to levitate the sales of your business, then start using the Net Promoter Score to enhance your sales and profit potential. Here we are compiling the best 5 strategies to drive sales using Net Promoter Score:
5 Strategies to Drive Sales Using Net Promoter Score
- Use NPS to improve the quality of your product/service
- Build long-term customer relationship with NPS survey
- Address the pain points of the customers
- Follow up with your detractors to reduce customer churn rate
- Leverage promoters to generate more sales referrals
1) Use NPS to Improve the Quality of your Product and Service
The Net Promoter Score Survey comprises ideally a two-part questionnaire:
- The Net Promoter Score Question – How likely is it that you would recommend [Organization/Product/Service] to a friend or colleague?
- The reasoning behind the customers’ scores.
When you ask the reason for the score, you will get to know about the strengths and weaknesses of your products and services.
You can effectively use the reasoning of the score in case of promoters, this will tell you why they are loyal to your brand and as detractors, you will know why they are not likely to recommend your brand. Passives will also be able to give you reasons for what is stopping them from being a promoter.
This important data from your NPS surveys gives you points of action that you can use to improve the quality of your product and service.
NPS Survey data can be easily converted into proactive and customer-driven strategies to enhance product development potential. Thus, Net Promoter Score Software provides merely not a score but a product/service development tool, if used effectively.
2) Build Long-term Customer Relationship with NPS Survey
The Net Promoter Score Surveys are not just conducted after an event or transaction but also can be used as relationship NPS Surveys to know what your customers generally think about your company and brand.
Relationship NPS is great for investigating how your customers see your business for the long-term. Since multiple data points are available, you can track long-term changes and effects.
A Relationship NPS Survey is conducted to gauge the general experience of customers of being associated with your organization.
Relationship surveys can be conducted by posing the simple question: How likely are you to recommend us to a friend or family on a scale of 0 to 10? It not only measures the willingness of customers to recommend your product/survey but also develop a healthy relationship with your customers.
When you ask your customers to give feedback, this makes them feel that you are really concerned about them and want to improve their experience. Thus, this interaction with customers can help you to connect with your customers and deliver them with a more personalized experience.
NPS data is zero, until and unless you don’t act on it and convert it into a proactive and the customer-driven approach. If you employ NPS Score to its fullest, it cannot only drive growth to your business by improving customer retention but also help you to develop a healthy customer relationship.
3) Address the Pain Points of the Customers
Usually, companies make mistakes by making large investments in acquiring new customers rather than focusing on existing ones. According to Adobe, existing customers account for at least 26% of revenue – and that finding new customers costs 7x more than keeping existing clients on board.
So the best way to retain your existing customers is to address your customers’ pain points and commit to delivering them with better customer experience. If you address the issues of your customers, this might leave a strong impression on your detractors and turn them into promoters.
NPS score helps you to quickly identify the pain points of the customers and help you to craft personalized solutions. Furthermore, Net Promoter Score can you convert your detractors into promoters and boost retention rate.
4) Follow up with your Detractors to reduce Customer Churn Rate
Detractors are known as your unhappy and unsatisfied customers who not only provide negative feedback but also share their appalling experience with their friends and colleagues. This may tarnish your brand image and affect your revenue and growth of your business.
You may receive both positive or negative reviews but something that matters is how you act on the negative feedback and how you interact with your detractors.
Following your detractors has become the need of the hour because according to the anatomy of a detractor study, negative feedback has more impact on the mind than a positive one.
75% of consumers stated that they share a negative experience with their friends and colleagues, whereas 42% of them stated they’d recommend a product/service.
Here NPS Survey enters into the play. Net Promoter Score Software widens the scope of following-up your detractors and helps you to convert them to promoters. Including Open-Ended Survey and Close-Ended Survey questions in your NPS Survey can help you identify and understand the root of why your customers do (or don’t) recommend you.
Based on the NPS Score data you can design your closed-loop feedback strategies to strengthen the relationship with your grumpy customers and reduce churn rate.
5) Leverage Promoters to Generate more Sales Referrals
In the above point, we’ve seen that detractors, when converted to the promoters, can help us to improve customer retention rates and augment business growth. Another inexpensive and result-driven way to amplify business growth is business/sales referrals.
According to Extole, business referrals are an inexpensive and effective way to generate new business. Now the question is from where and how to get these business/sales referrals?
The answer to the above question is Promoters. Yes, your promoters can provide you with sales referrals. Here, at this point, NPS Survey plays a major role in gathering promoters for you. Based on the NPS Score, you can quickly identify and target happy customers (promoters) most likely to encourage them to provide sales referrals.
But your promoters are your ambassadors who spread positive word of mouth for your brand. According to Texas Tech Today, 83% of consumers are willing to refer after a positive experience—yet only 29% actually do.
Since you’ve sent NPS Surveys through NPS Survey App and you get to know about your happy customers (promoters). Now your call is to send the incentivized request for referrals to promoters. Thus, sending incentivized sales or business referrals requests to promoters can make them even more loyal to your brand.
Being a standalone customer experience metric, Net Promoter Score can completely transform the way you serve experience to your customers. Here, Net Promoter Score Survey Software plays an elemental role in establishing a secure platform to streamlines your customer experience and deliver world-class customer experience.