Customer satisfaction plays an important role in every stage of the funnel. Brands need to ensure that customers have a great experience with them throughout their entire journey, from navigating the website to making a purchase to following up on their order. Brands also need a way to measure customer satisfaction, which is where NPS comes into play.
NPS®, or Net Promoter Score, is an essential customer satisfaction metric that should be measured by every brand regardless of size, industry, and products. It quantifies customer happiness, identifies strengths and weaknesses, and prioritizes areas of improvement. What is NPS, and how can brands collect and leverage it?
What is Net Promoter Score (NPS)?
Net Promoter Score is a customer experience KPI that measures the likelihood of customers recommending your brand to their friends. While reviews are specific to a certain product or interaction, NPS is about a customer’s overall experience. To quantify this, brands ask one simple question: "On a scale of 0 to 10, how likely are you to recommend us to a friend?".
In addition to this question, brands might also ask supplementary questions for context and guidance. For example, they can ask for customers’ age, gender, and location to support their segmentation strategies. They may also ask questions like “what is the primary reason for your score?” and “how can we improve your experience with us?” to gain more insight.
Customers who answer 0 - 6 are detractors, customers who answer 7 - 8 are passives, and customers who answer 9 - 10 are promoters. NPS scores can range from -100 to +100 and are calculated by subtracting the percentage of detractors from the percentage of promoters. For example, if 70% are promoters and 10% are detractors, the final NPS score would be 60.
Any score above 0 is considered a good score as it means the brand has more promoters than detractors. Average scores usually differ between industries; for example, a 2018 study found that NPS averages ranged between -1 for internet service providers and 65 for specialty stores. Ultimately, brands should work towards improving their NPS score in order to boost their reputation and increase customer satisfaction.
Benefits of using NPS scores
To start, NPS helps brands measure and quantify customer loyalty. Rather than trying to infer overall customer satisfaction from other data points like review ratings and support conversations, which only relate to a specific product or interaction, brands directly ask customers how they feel about them in a general sense.
Next, having an NPS score helps build trust with future customers. 74% of customers say word-of-mouth is key to making purchase decisions, relying more on influencers, reviews, and personal recommendations than a brand’s own claims. NPS scores give potential customers a clear picture of whether a brand is reputable, reliable, and well-liked.
NPS scores also give brands the chance to identify and build relationships with promoters, leading to increased loyalty and opportunities. Brands can reach out and reward them with things like discount codes, free gifts, or loyalty points. From there, they can continue to leverage the relationship by encouraging them to make more purchases, refer their friends, or even become brand advocates in exchange for more rewards. This not only increases retention but also reduces costs, as referrals are more cost-effective than other acquisition methods.
Interested in creating your own referral program? Learn more about Stamped Referrals.
On the other hand, NPS scores also give brands the opportunity to connect with detractors and prevent churn. Customers who answered 0 - 6 are a potential churn risk, so by identifying themselves as such, brands can reach out and ask them for more details about their experience. Even just by demonstrating empathy and interest in their opinions, brands can start to improve their relationships with their detractors and potentially win back their business.
Lastly, with additional survey questions, NPS scores help brands gain insights into their strengths, weaknesses, and areas of improvement. By asking specific questions about customers’ experiences like what they do well and what could be improved, brands are able to identify what needs to be prioritized. For example, if customers regularly praise their fast shipping but also complain about damaged items, they can look into improving their product packaging.
How to collect NPS scores
NPS scores and answers to any additional questions are collected through surveys. With Stamped, brands can send surveys to customers via email, SMS, and direct link, and/or by adding widgets to their website.
Click here to learn more about Stamped’s Net Promoter Score feature.
To make the most of the opportunity, brands should start their NPS survey with demographic questions. This helps create segments according to customers’ age, gender, location, and so on. For example, they might discover that they have more detractors in a certain age group or a surprising number of promoters in a specific area.
Brands should be careful not to ask introductory questions that aren’t relevant and/or can be answered with data they already have. The more questions there are, the less likely customers are to complete the survey.
Next, brands should follow with their core NPS question and keep it simple. The most basic version of the question is “How likely are you to recommend us to a friend?”, but they can also make a few additions without deviating too much from the original:
- “On a scale of 0 to 10, how likely…”
- “How likely are you to recommend [brand name] to a friend?”
- “...recommend us to a friend or colleague?”
Lastly, brands should end their NPS survey with one to two follow-up questions. These open-ended questions give customers the opportunity to share comments and concerns. One of the most common questions is “what is the primary reason for your score?”, followed by something like “how did you hear about us?” or “how can we improve your experience?”.
Brands may also want to consider asking for explicit permission to contact them later on to discuss their answers further. For example, if a customer expresses frustration with the checkout process and gives consent for future contact, the brand can follow up and ask for details and screenshots.
How to leverage NPS scores
NPS scores can be used in many different ways and across many different business functions, especially with the right supplementary questions. Brands should keep a close eye on how their NPS score changes over time and which business decisions potentially led to these changes.
To start, NPS can be used as a benchmark within your industry and against your direct competitors. As mentioned previously, average NPS scores can differ across verticals, and brands should keep track of whether they’re above or below industry standards. They can also look at competitors with publicly shared NPS scores to see how they compare. For those who don’t capture and/or share NPS, brands can look at their product and/or site reviews instead to get some sense of customer satisfaction.
Click here to learn how to elevate your own review collection strategy with Stamped Reviews.
NPS can also be used to create and analyze customer segments. Survey responses help brands identify patterns and connections across customers of similar demographics and/or who gave the same scores. For example, when segmenting NPS responses by age, they might find that customers of a specific age group have a consistently lower score than everyone else. This can indicate that something about the brand experience doesn’t work for that generation of customers as a whole.
NPS responses can also be used to support customer service and churn prevention strategies. Brands can more easily identify which customers are more likely to churn and follow up with them to address their concerns and potentially win back their business. With the right supplementary questions, they can also make note of any recurring issues mentioned by unhappy customers, such as slow shipping or unhelpful customer service.
Lastly, brands can take it one step further and use NPS responses to initiate one-to-one conversations with promoters and detractors. In addition to thanking customers for high scores or resolving specific issues for customers with low scores, they can also ask for additional feedback. For example, for promoters who specifically mention enjoying the brand’s loyalty program, brands can reward them with bonus points, encourage them to refer their friends, and ask them what activities or rewards they’d like to see in the future. On the other hand, for detractors who previously complained about the browsing experience, brands can ask which specific site pages they had issues with and if they have any suggestions for improvement.
Gain insights into customer sentiment and satisfaction with Stamped
Net Promoter Scores help brands quantify customer loyalty, giving them a better sense of how customers really feel about them. Brands can also use NPS to establish trust and credibility with new customers, measure themselves against their competitors, and facilitate conversations with both their biggest fans and their most vocal critics. NPS enables brands to gain actionable feedback for improving customer satisfaction.
With Stamped, brands can easily send out NPS surveys and collect real-time insights into their customers’ experiences. They can identify their promoters, passives, and detractors, share feedback with people and teams in their organization, and initiate follow-up conversations with their customers. Book a demo with a sales rep today to learn more.
