As a growth-focused business leader, you are already invested in tracking plenty of CX metrics. But should Net Promoter Score (NPS®) be on your list? And if so, how high up? Since it was first introduced in 2003, many consider the metric to be the gold standard for measuring customer satisfaction and loyalty.
Even as Zoomers redefine the speed at which the average customer now switches loyalty, managing your NPS can help minimize churn. But for that, you need to take a cue from your top competitors – treat NPS surveys as more than just a check box exercise. How?
In this guide, we demystify how to make NPS actually work for your business. Move beyond the traditional approach that does little to transform loyalty sentiment. Instead, build an intuitive, always-on ecosystem that lets you measure and manage NPS effectively, elevating CX and loyalty.
What is Net Promoter Score? (and what it isn’t!)
How often do you get an email or an SMS asking – “How likely you are to recommend a business to friends and family based on your latest purchase?” We’d say almost every day. The response you input forms the basis for the business’s Net Promoter Score (NPS). Sounds fairly simple, right?
At its core, NPS is a simple metric designed to gauge customer satisfaction and loyalty. Depending on the rating they choose on a scale of 1 to 10, customers emerge as Promoters, Passives, or Detractors.
- Promoters: 9 or 10
- Passives: 7 or 8
- Detractors: 0 to 6
What do CX owners do once they receive ratings? They calculate the percentage of Detractors and subtract it from the percentage of Promoters. This gives them their NPS in the context of the responding cohort. In other words: %Promoters – %Detractors = Net Promoter Score.
At a time when customer loyalty is defined by multiple factors, including tough-to-measure attributes such as trust, NPS can offer you clear insights into customer loyalty. While metrics such as CSAT are great to dive deep into customer satisfaction, NPS tells you how much a customer values your brand; most of us only want to recommend outstanding experiences to our friends and family. This simplicity is the reason why some consider an NPS question to be the ultimate survey question, often standing alone to collect quick feedback without wasting participants’ time.
Beyond enhancing loyalty, measuring and managing NPS is important for strengthening your brand and business. For instance, if you witness a steady rise in NPS right after you launch your new app, you know that your customers deeply value the interactive experience you have to offer. On the other hand, if it dips, you know something’s not quite right and you can get down to digging deeper to restore your NPS.
A common mistake CX-focused leaders make with NPS is viewing the score as an isolated barometer that will miraculously win more loyalty. Measuring NPS does not equate to enhancing NPS! In order to turn the number into any insightful action, let alone any positive growth for the company, it’s important to explore how NPS can be used to inform and enhance CX.
Beyond enhancing loyalty, measuring and managing NPS is important for strengthening your brand and business.
How CX leaders measure Net Promoter Score
High Net Promoter Scores don’t just happen. They are earned. Top CX leaders know this. It’s why they are fast ditching the traditional approach to measuring NPS as a generic exercise. Instead of taking every NPS survey result at face value, they choose to go beyond.
How? They calculate NPS at both transactional and relational levels. This lets them know:
- Interaction-specific experiences that need immediate resolution
- Trends across customer journeys that demand long-term interventions
And that’s just part of it.
Proactive CX leaders also commit to building an NPS-focused culture. Here’s what they do differently:
- Adopt a nurture campaign approach to maximize responses
- Ask a series of questions to identify key NPS drivers
- Encourage open-ended NPS feedback for optimum insights
- Discuss reports across teams and functions
As a hands-on leader, you might already be asking: How can I ensure such seamless NPS integration into everyday operations? Effective CX leaders are taking ownership of NPS; they are placing NPS survey tools within end-to-end, integrated CX management ecosystems. This enables everyone on the team to view and impact NPS in a deeper, contextual manner.
Ideally, NPS is discussed not just as a single number, but as part of a comprehensive CX Dashboard, allowing for insights into how key drivers and variables uncovered in open-ended feedback impact the score trend. Such a cumulative approach to measuring NPS allows for:
- Identifying top brand advocates and crafting effective retention strategies
- Learning which customers are on the verge of leaving and pursuing high-profit cohorts
- Insights into top CX fixes that promise maximum loyalty and growth
- Understanding the direct impact of every CX edit on customer satisfaction and loyalty
- Aligning every team to a singular NPS vision, accelerating relevant CX
Leaders who consistently earn high NPS for their business also make tech and automated alerts an integral aspect of their NPS management. This lets them test and update their strategies at great speed and scale without losing out on efficiency.
Effective CX leaders are taking ownership of NPS, placing NPS survey tools within end-to-end, integrated CX management ecosystems.
Top ways to improve your Net Promoter Score
Transforming your NPS score, especially if you are just starting to work on it actively, can take a while. Even months. While you must invest in building an ecosystem, it makes business sense to implement specific exercises right away.
On average, a study by the London School of Economics found that you can expect a direct 1% revenue increase when your NPS goes up by 7 points. It also enables you to grow loyalty and revenue while keeping new customer acquisition costs under control.
Here are a few favorite hacks our clients rely on to improve their NPS even as they build for the future:
1. Request NPS surveys on the preferred channel, in the right format
Delivering an omnichannel customer experience requires a fluid, personalized approach to survey asks. Customers are most likely to participate in your survey when it seems less of a chore and more of an interaction. This approach is key to engaging your most disengaged respondents. For instance, if multiple emails requesting feedback have gone unanswered, try an Instagram video that leads them to the survey link.
2. Let customers know why their feedback matters
Customers are busy. And your email may seem unimportant, especially when they have a neutral response. Successful CX leaders run campaigns to communicate why each customer response matters. This helps customers see the value in taking the survey as well as appreciate the business gesture.
3. Engage customers regularly in a personalized manner
We are most likely to respond to people and businesses when we share high levels of affinity. Consistent engagement, especially in the case of business relationships, is key to forging such a connection. When customers feel that you care about their relationship, and have genuine value to offer, they are more likely to trust you as well as respond to your communication, including NPS surveys.
4. Reward interactions over transactions
There is a reason you have a loyalty program to prompt purchases through the customer lifecycle. Imagine expanding its orbit to include NPS survey responses. CX leaders chose to reward customers for consistent interactions. This works at two levels – it inspires maximum responses to arrive at an authentic NPS and lets customers know you care about their honest feedback; the gesture itself triggers greater trust, satisfaction, and survey rating.
Successful CX leaders run campaigns to communicate why each customer response matters. This helps customers see the value in taking the survey as well as appreciate the business gesture.
Designing the perfect NPS ecosystem
It takes a village to win and retain customer satisfaction and loyalty. And the same goes for your NPS. Earning above-industry NPS consistently demands that you make it a KPI for every team, including support functions.
Once you put the CX metric at the center of your operations, you can build an ecosystem that delivers optimum results. Here’s what your ideal NPS ecosystem would offer:
A survey template library: Empower your team to draft questions for NPS campaigns with drag-and-drop tools. From curated drafts to visual design customization, a comprehensive, CX-focused survey template bank saves you hours of planning and implementation.
Intelligent distribution features: Not everyone’s sitting at their computers and waiting for an email invitation to prompt their feedback! Look for a system that offers a wide range of distribution options, from Salesforce-based triggers to automated email and SMS distribution, from QR codes to website feedback surveys, and… well, lots more!
Easy drill-down by key segments: NPS remains a holy grail for measuring customer satisfaction and loyalty. And yet, the best NPS ecosystems are the ones that let you make sense of your performance in the larger CX context. This means comparing NPS across important groups, like customer segments or locations, or even time periods or touchpoints, so you can identify areas of concern or opportunity for targeted follow-up.
Powerful analytics for prompt action: A low or neutral NPS demands typically busy teams to spring into quick action. An intuitive NPS ecosystem uses tech such as NLP for deep sentiment analysis. Go beyond the numbers and act on real customer needs without having to decode reports.
Early alerts for risk management: An effective NPS ecosystem works to keep Detractors down without needing your constant intervention. It should let you set custom rules and workflows when a low rating comes in or when your overall NPS dips. Without your intervention, your platform should alert relevant teams so they can follow up accordingly.
Predictive analysis: While the goal for NPS is always something along the lines of “Higher is better!” it’s important to ensure that the actions you’re taking to improve your score will have the desired effect. The right NPS system will help you to identify which drivers can have the biggest impact through the use of predictive analytics. After all, most teams have limited resources and need to make decisions about how to spend them!
The best NPS ecosystems help you make sense of your performance in the larger CX context. This calls for the standardization of results and reports with CSAT, CES, and custom metrics.
NPS management: FAQs
Is NPS a worthy exercise for small businesses and start-ups?
Absolutely. Regular NPS surveys can help you identify customers who are most willing to spend with you. They can also earn you new customers based on recommendations. This lets you unlock greater revenue and growth without spending big on customer acquisition and retention. Did we mention it also works to up your brand equity?
My industry does not attract repeat customers. Should I still care about NPS?
Your current set of offerings may not merit repeat purchases. Yet, it pays to have a Promoters community. You can immediately tap into this community when you want to expand your line of offerings or earn new customer referrals.
There is a huge gap between my brand’s transactional and relational NPS. Can a consistent approach to managing NPS change this?
Some of the most successful CX leaders and businesses experience this gap. They use it as an opportunity to understand what customers best love and areas that demand urgent transformation.
Why does the formula give equal weight to every NPS survey response? For instance, my lowest paying customer and a celebrity client?
A low-paying customer today could win you your next three top-paying customers tomorrow; that’s the perspective that leaders at companies with consistently high NPS adopt. Additionally, every customer is evolving in terms of their needs and budgets. Equal weightage factors in such complexities.
How long does it take on an average to move the needle on NPS?
Measuring NPS does not equate to improving NPS. Depending on your CX, it takes multiple actions and alignment across teams to transform customer satisfaction and loyalty sentiment. This can mean weeks and months. External factors such as tough competition, changing customer expectations, and an extreme social environment can further impact your progress. It’s important to see NPS management as a core CX driver rather than a quick-fix exercise.
What is the cost I should attach to my NPS management transformation?
Successful NPS managers see such survey ecosystems as investment centers rather than cost centers. They also chose tools and platforms that offer comprehensive CX management to get more value for their money.
Ready to track and transform your NPS? Contact us today to learn how SogoCX can help you understand, manage, and improve your Net Promoter Score and business growth.
