Net Promoter Score: A Measure of Customer Experience

You can use the net promoter score to measure customer experience

The Net Promoter Score (NPS) gives your business a simple measure of success in the area of customer experience. Two in three Fortune 1000 companies use the metric. Helping to drive improvements in customer experience, it can grow a business and and keep it profitable over the long term.

When growing a business, we all face the same challenge. We have a limited amount of resource, time, money and finance. But we also have many areas of the business to focus on. From product development to HR, deciding where to channel our limited resource can be a difficult problem.

Working out which areas create the greatest return on investment is paramount to success. So we often focus on the areas in which we see the most obvious and immediate returns. This might be sales and marketing, or making our core product or service better. And such an approach lets us sell more product at a higher price. 

One area that is often overlooked as a key area for investment in customer experience. This is due both to the benefits not always being obvious, as well as confusion over how to measure success. 

In this article, we run through a tried and proven technique for measuring customer experience. We highlight exactly why building a better experience for our customers is so important for a digital brand. 

Why Is Customer Experience Important to Digital Brands?

Building a great customer experience is always the heart of a great business. But it isn’t only traditional businesses that enjoy every-day human interaction that place such importance on the customer relationship.

Digital businesses can also benefit from taking a customer-first approach. In the digital age, it is difficult to reach your audience due to ad blockers and a general sense of ad blindness. Delighting your customers is now more important than ever as a method for reaching new audiences.

Consumer trust in brands is at an all-time low. There is endless news around the dubious practices of some influencers and countless fake online reviews. So consumers are often trusting only their our own circle to make recommendations. Word of mouth is now more important than ever. 

Digital brands also gain from great customer experience in a more direct way. Although it depends on your industry, your business and its customers, it is said that onboarding a new customer can be five times more expensive than retaining current customers

So investing more time and effort into creating a better customer experience will result in more profitable business. 

What Is the Net Promoter Score?

The Net Promoter Score (NPS) is a smart way that businesses measure their customer experience. They do this in an attempt to track current and future business growth. 

We express NPS as a metric. Many businesses and industries accept it as the core measure for customer experience. Some estimates say that at least two-thirds of Fortune 1000 companies use the Net Promoter Score to measure their customer satisfaction. 

Many recognize NPS as a simpler, easier to understand and better-quality measure in comparison to customer satisfaction research. 

How Do You Calculate NPS?

The Net Promoter Score is easy to calculate. You simply start by asking the question:

‘How likely is it that you would recommend [your brand] to a friend or colleague?’

This question does not have a yes or no answer. Instead, you ask respondents to select their opinion on a sliding scale from 1 to 10. On this scale, 10 means ‘very likely’ and 1 means ‘very unlikely’. Depending on where a response falls, it will tell you a lot about that experience:

  • Promotors – scoring 9-10
    These respondents are loyal enthusiasts. They are highly likely to keep buying from your brand as long as they have a need. They are also likely to refer others they know to your brand, making them valuable customers. 
  • Passives – scoring 7-8
    These respondents are satisfied with their experience. But, they are not enthusiastic and are not likely to go out of their way to recommend your business to others. 
  • Detractors – scoring 0-6
    These respondents are unhappy with their experience with your brand. They are unlikely to buy from you again unless necessary. And they are more likely to share negative comments with others than make a recommendation. 

When you calculate your NPS score, it is crucial to collect as much data from as many customers as possible. Once you have collected the data, you can calculate your NPS by subtracting the percentage of detractors from the percentage of promoters and multiplying the result by one hundred. 

Your NPS will span from -100 (if every respondent is a detractor) to 100 (if every respondent is a promoter).

How Should Businesses Use the Net Promoter Score?

NPS offers a clear indicator of growth, customer retention and customer loyalty. And knowing your NPS can be a smart way to achieve growth in many parts of your businesses. For example:

  • Improve your customer experience. It is impossible to measure how well changes are working without knowing where you started.
  • Understand your position within the market. By knowing how you stack up in your NPS against other brands, you learn whether you are strong or weak within a market. 
  • Working your NPS into your example customer personas is a good way to help areas like customer support and marketing. It gives colleagues within your business a clear idea of who your customers are and how they feel. 

Examples of Tools/Surveys to Measure NPS on Websites and Apps

There are many tools available to help you measure NPS on your website or app. One of the most popular survey tools available for this is SurveyMonkey. Using a tool which is simple makes it easy for your customers to answer your question. And it allows you to analyze the data found in a way that works for you and your business.  

We can see that measuring customer experience is a crucial process for any business that wants to grow and remain profitable over time. By calculating your Net Promotor Score, you give yourself an easy to understand and widely-accepted measure of your success in the area of customer experience. 

But, just knowing your score is no guarantee of success. You must act and use your score to drive positive change in your business for it to have any worthwhile impact.