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People influence people. Nothing influences people more than a recommendation from a trusted friend. A trusted referral influences people more than the best broadcast message. A trusted referral is the Holy Grail of advertising.
Remember the last time you checked out a new online shopping site and actually purchased something from it? Out of many reasons that persuaded you to buy one would certainly stand out, and that would be – a recommendation from a friend/colleague/family member.
That is the power of referrals. They are the strongest of the lot among advertising, cold calls, PPC ads and zillion other marketing activities. The sad part for marketers is, referrals are a manifestation of strong customer loyalty and customer loyalty cannot be purchased. It can only be earned, measured and improved.Net Promoter Score is a tool that empowers businesses/brands to measure Customer Loyalty. Click To Tweet
NPS comes with a typical question followed by an 11 point scale, from 0 to 10. The typical Net Promoter Score question is
“How likely would you be to recommend [this company or product] to a friend or a colleague?”
On the scale, ‘0’ represents “Not at all likely, and ’10’ represents ‘Extremely likely’.
This standard question is followed by the Net Promoter Score follow-up question that aims to know the reason to the ratings. For e.g. Why did you give us the above rating?
Net Promoter System (or Net Promoter Score) proposes to classify customers as:
Promoters, the ones that are extremely satisfied with your business/product/brand and are likely to pass the word to others;
Detractors, these are the ones that are most likely to switch to competitors and spread negative word of mouth; and
Passives, the ones that are unenthusiastic and are prone to switch loyalties.
The Net Promoter Score calculation is fairly simple, respondents marking 9 or 10 are Promoters, 7 or 8 are Passives and any number between 0-6 are Detractors. The score is the difference in the percentage of Promoters and Detractors, the percentage of Detractors subtracted from the percentage of Promoters.
NPS simplifies long Customer Satisfaction Surveys to just one question. But critiques of NPS say, in that process NPS fails to answer the reasons for why some customers are Promoters, Detractors or Passives.
The ultimate question in Net Promoter Score is – What if it became possible for you to know and track customer behavior vis a vis them being Promoter, Detractor or Passive. The power to predict, analyze, unearth reasons, around understanding customer loyalty.
It seems quite a fascinating thing to do, but let’s see how is it possible.
How to Measure Net Promoter Score – In-app/on Web/ via Email
While planning to measure NPS for your online business, many questions crop up. A few common ones are:
- How to survey customers for NPS?
- Which customers to pose the NPS question; to high-end customers or all customers?
- On what customer touch-points? Are there any key touch points that you intend to focus like after sales support, delivery of products, etc.
Conventionally Emails are used to measure NPS. There are various online tools that help design NPS email templates and gather customer data. A few quick steps and the survey is ready to be sent to customers.
But that’s not all.
We all know emailing surveys to customers need to cross a lot of hurdles to incite a response. The open rate of emails, click-throughs and response rate, are not encouraging (MailChimp pegs average Open Rate and Click Rate at 22.025% and 2.9% respectively). In addition to this, a respondent might have forgotten about the experience of the business transaction.
Alternatively, you can use website surveys to measure NPS.
Advancements in onsite user engagement tech have made it possible to talk to a particular set of users on the site. While doing NPS, for obvious reasons you would want existing customers to answer the survey. There could be many such criteria depending upon your target audience for NPS.
For example, you may want to focus on a set of customers who have bought high-value products in the past month, have made a purchase in the past one month and have spent more than 1 minute on your site browsing products. Plus, customers who have called service support.
All that’s required is setting up of rules that trigger NPS survey. You can easily pass data to third-party Dashboard (SaaS platform) rule builder and target NPS to the desired set of customers. You can design a survey that only gets triggered when all the mentioned criteria get fulfilled.
For more on targeting rules you can read about setting them within WebEngage here.
With onsite surveying, the data collected is fast and more reliable as the customer interacts with your site while filling response. We at WebEngage have helped numerous online businesses to measure customer loyalty with NPS.
Know what Detractors and Promoters don’t tell you:
Down to the crux of the matter, finding the reasons to why some customers promise loyalty and some don’t.
Online businesses collect and maintain user data at various touch-points within their site. The data includes user profile data, transaction history, demographic details, etc. After NPS, the responding customers get classified into any of the three categories (Detractors, Passives or Promoters). The pairing of existing behavior user data with NPS categorization opens avenues for exploration.
A general NPS survey tool is limited to only provide the score with limited functionality to analyze and integrate the findings with other data. Intelligent SaaS platforms like WebEngage can do this easily.
Consider, for example, you measure NPS every quarter, and you notice that a set of Promoters in the last quarter have become Detractors in the latest results. With corresponding User Behavior Data paired with NPS results, you can easily slice and dice the data to know the reason behind the shifting loyalties. Even narrow it down to specific past customer-business interactions.
You get Actionable Insights:
Employing NPS this way gives you a holistic view of customer loyalty and not just a score to chase around. The quantitative Net Promoter Score gets converted into a source of qualitative actionable insights. Now you can:
- Immediately take corrective actions after customers get tagged as Detractors in NPS.
- Understand customers better by creating micro-segments of detractors(/Promoters/Passives) based on user behavior data.
- Identify areas of improvement within your business.
How to improve Net Promoter Score
NPS is not just a number it is much more than that. Integrating NPS categorization with user behavior data allows you to micro-segment customers, know the reasons behind customers being Detractors, Passives or Promoters. The answer to how to improve Net Promoter Score lies in extracting the most out of your existing data.
In the comments section below share with us your experience of measuring and making the most of Net Promoter Score beyond just chasing the score. We would love to hear from you.
Folks at Satmetrix, Bain & Company want us to mention that –
Net Promoter® and NPS® are registered trademarks and Net Promoter Score and Net Promoter System are trademarks of Bain & Company, Satmetrix Systems and Fred Reichheld.