What Is NPS, and Why Do You Need to Track It?

First things first, let’s define the notion NPS and establish what an NPS system can do for you and your business! NPS stands for Net Promoter Score and, much like the name suggests, it’s a performance indicator and a metric system for collecting and tracking data on customer satisfaction, on a long-enough timeline. From the best slots UK to a local online nail polish store, the NPS program can help reveal a lot of significant info on both the pros and cons of a product.

That’s not to say that you will be able to reach a general conclusion with just one NPS survey, to the contrary! Much like in sports, or blockbuster movies, one single frame will not give out the outcome of the match or the flick. The value of NPS lies in data collection and tracking over a longer period of time, helping you identify trends and evaluating the actual impact of your efforts.

As mentioned previously, NPS stands for Net Promoter Score, and at its core, it’s a fairly simple formula. Basically, NPS measures the percentage of promoters minus the detractors’ percentage. When calculating NPS data, the most important question to ask revolves around the likelihood of recommending the said product to colleagues, friends, relatives, etc. The classic 1 to 10 scale will be used to collect the relevant answers from each NPS questionnaire and to determine the overall score. If the score of the NPS question is 0, this means “unlikely”. A score of 5 stands for “neutral”, whereas 10 will mean “very likely”.

The NPS system is mostly regarded as a benchmark for improvement, and, for a good reason. To begin with, there is no concrete way of improving the things that you don’t keep track of. This is where the NPS program comes in, and in time, it will end up showing you just how much of an impact did the changes implemented recently actually make. At the same time, you can use an NPS survey to track any of the following:

• Important customer demographics and psychographics;
• Isolate customers that responded to a particular type of message;
• Identify customers that interact with different divisions of your company;
• Gather all customers that have had direct contact with your customer support department;
• Isolate customers who only use a specific line of products.

There is no denying that NPS data can bring companies major financial benefits in the long run. However, while doing so, it will also help build and consolidate the relationship with the customers, which is simply put, the cornerstone of every thriving business nowadays. How exactly can NPS help you achieve both? Let us demonstrate with a quick and real example!

A while back, Apple retail stores decided to use the NPS 0-10 tracking scale in order to retain their unhappy customers up to that point. These would be the detractors in the NPS formula from above, and their average score would be 6. Now, Apple gathered all customers that had rated their experience 0-6 and decided that they should receive a follow-up call directly from the manager of the store.

After two years of tracking detractors, it turns out that all customers who accepted the call from the store manager ended up spending considerably more than those customers that did not take the call. To put it in numbers, each customer that spent over an hour on the phone talking to the manager meant $1000 in added revenue. After only one year of NPS tracking, Apple managed to boost their revenue by no less than $25 million!

The most important thing to remember is that NPS tracking means a lot more than just one simple NPS question. Remember, short-term tracking is most likely to bring very few if not zero results. You are in it for the long run, and most important questions whose presence in your NPS questionnaire is mandatory:

• On a 1 to 10 scale, how likely is the customer to recommend your product to friends, colleagues, or family?
• What is the main reason behind the customer’s score?
• What can you and your company do better?

Notice how the first one is close-ended, whereas the following two questions have an open ending? No need to worry, you can track each type of NPS question with ease. The simpler one is, of course, the close ended question from your NPS survey – the NPS tool will automatically collect the data that will help you observe the trends over a determined period of time. The open-ended questions on the other hand, will prove to be more challenging. Here is where NPS analysis is a must, and good organization is crucial. For starters, you will have to gather all data into a new template, after which you will have to identify categories of response. Then you need to record all individual responses, organize the categories, and lastly, make a visual representation of your NPS data. This will help you categorize each response into its corresponding product category, from where you will be able to decide on further steps accordingly.

The times when companies and business-owners were focused on profits and revenue are a thing of the past now, as they should be. At the end of the day, any business out there should focus on the key-element that will ensure its prosperity and continuity, namely, its customers. This is where an NPS system used properly could seriously benefit your business, and there is no time like the present to start implementing one.

We’re also curious to know if you found our brief NPS guide useful, and if you have other great examples, or questions to add in an NPS survey, please feel free to share them with us!

Arthur Rowley is an avid writer specializing mostly in technology and marketing. Having spent years finessing his craft, he now can ensure you that Arthur has much acclaim for these areas and dedication to providing high-quality blogging content.