NPS or Net Promoter Score, is a tool used by small businesses and entrepreneurs to measure the loyalty of their customers. By conducting an NPS survey, you can learn more about who your customers are, how they feel about your service, and what you can do to improve it. NPS has become an extremely popular metric among companies both large and small. In fact, according to Bloomberg, two thirds of Fortune 1000 companies are using it today. Small business owners are aware of the importance of getting to know their customers in order to satisfy their needs, and nowadays there are different ways to build customer loyalty and measure it.
So what is NPS, and how can it help your small business? Let’s take a closer look at how this tool can change the way you do business.
What it Is: NPS is based on asking your customers two simple questions. The first is, “How likely are you to recommend our product or service to a friend?” This question is typically answered on a number scale from 0 to 10. This is then followed by a second question. “What is the reason behind this score?” This gives you the opportunity to gather a ton of useful information. Not only do you gauge the loyalty of your customers, you also learn more about their personal preferences and criticisms.
How it Works: By using a number scale, you will be able to separate your customers into promoters, passives, and detractors. Promoters are those who give you a 9 or 10 and are the most likely to show loyalty to your brand. Passives will rate you a 7 or 8 and are considered to be more or less indifferent to your service. On the other hand, detractors will give you a 0 through 6 and are likely to be your most vocal critics.
From there you can calculate your score by subtracting the percentage of detractors from the percentage of promoters. This score will be anywhere from -100 to +100. If you have a positive score, you’re on the track. If you’re score is in the area of +50, then you’re considered to be doing quite well.
Why it Works: Separating your customer base into promoters, passives, and detractors like this helps you learn more about who your customers are and why they feel the way they do. Promoters can be counted on to be your most loyal supporters. These are the people who will spread good word of mouth and be first in line whenever you have a new product or service available. Passives on the other hand, are mostly satisfied with your service but are not nearly as enthusiastic. Their buying habits are more erratic, and they can be easily swayed to your competition.
And then there are the detractors. These are the people who are vehemently opposed to what you’re doing for one reason or another and can sometimes be bad for your reputation. Although it may be difficult, you need to pay attention to your detractors as much as your promoters. They might be pointing out legitimate flaws in your business.
How it Can Help You: Now that you know more about your customers, how they feel, and why they feel that way, you can use this information to transform your small business. The first thing to do is look at your detractors’ complaints and fix these problems immediately. This will help you decrease the number of detractors you have in the future and make your business more efficient overall. Second, you want to look at what your promoters like about your service and do more of this. This can lead to new opportunities that you may not have considered in the past.
And of course, you want to do what you can to sway your passives into becoming promoters. Take a look at their answers and see what you can do to get them more excited about your product or service. Once you’re done, you start the whole process over again. It’s ideal to calculate your net promoter score every six months. This way, you can continually make your business more and more efficient.
How to Get the Most Out of It: The key to getting the most accurate information from your customers is in how you ask the second question. It has to be more than just a simple “Why?” If you ask a generic question, you’ll likely get a generic answer. On the contrary, your question needs to be tailored to the first question’s response.
For example, a detractor might receive a question such as, “Sorry you don’t feel like you can recommend us. What is something we can do to improve our product or service?” By customizing your second question, you will get more specific answers and more useful information.
How Else Can It Be Used: Your net promoter score isn’t just something you can use with customers. It’s something you can use to gauge the loyalty of your employees as well. You will have to adjust your questions accordingly, but the concept of separating employees into promoters, passives, and detractors is still relevant.
This can provide you with quite a bit of useful information about how your employees feel about working for you. Based on their answers, you can make adjustments to create a better working environment. Remember, happy employees are productive employees. This will also save you money in the long run as it will lead to having less turnover in the future.
At this point, you might be wondering what you can do to find your business’s net promoter score. The best way to go about doing this is by using online platforms like Typeform. At Typeform, you can use a ready-made NPS survey template that can be embedded into emails sent to your customers. You can also add extra follow-up questions or have your second question customized depending on what score your customer submits. You can even use Google Analytics to track your results. This makes finding your NPS score extremely easy and efficient. And with all the benefits you receive from this information, there’s no reason not to do it. So start finding your NPS score today and watch your business grow as a result.