What is NPS and why you should start measuring it?
NPS or net promoter score is one of the most effective ways to gauge customer satisfaction. It is based on a single question:
On a scale of 0 to 10, how likely are you to recommend our company to a friend or colleague?
In the context of customer support, NPS can be a valuable metric for understanding how satisfied customers are with the support they have received.
A high NPS score indicates that most customers are satisfied with the support they have received and are likely to recommend the company to others.
A low NPS score, on the other hand, indicates that customers are not satisfied with the support they have received and are unlikely to recommend the company to others.
Measuring NPS is of essence as it offers valuable insights into the effectiveness of a company’s customer support efforts. By regularly collecting and analyzing NPS data, companies can identify areas where they are succeeding and areas where they need to improve.
One way to improve NPS in the context of customer support is to ensure that customers receive prompt, helpful, and accurate support. This can be achieved through a variety of means, such as providing multiple channels for customers to contact support (e.g., phone, call, social media channels, email, chat), training support staff to be knowledgeable and friendly, and investing in support tools and technologies that enable efficient resolution of customer issues.
Another way to improve NPS is to listen to and act on customer feedback.
By regularly collecting and analyzing customer feedback, companies can identify common issues and pain points and take steps to address them. This can be done through processes such as gathering feedback through surveys or through more informal means such as listening to customer calls or reading online reviews.
How NPS is measured
Customers are then grouped into three categories based on their responses:
- Promoters (9-10): These are customers who are extremely satisfied with the product or service and are likely to recommend it to others.
- Passives (7-8): These are customers who are satisfied with the product or service, but may not be as likely to recommend it to others.
- Detractors (0-6): These are customers who are not satisfied with the product or service and are unlikely to recommend it to others.
The NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters.
So, if 50% of customers are Promoters, 30% are Passives, and 20% are Detractors, the NPS would be:
(50 – 20) = 30.
A score of above 0 is considered good, A score above 50 is considered excellent, scores above 70 are considered as world-class.
It’s important to note that while NPS is a widely used and accepted metric, it does have its limitations. It is based on a single question, so it doesn’t provide a lot of detail about what specifically customers liked or didn’t like about the product or service. It also doesn’t take into account factors such as customer demographics or purchasing history. However, it does provide a quick and easy way to measure overall customer satisfaction and can be used as a benchmark for comparing performance over time.
While NPS is often used in customer support, it can be used to measure customer satisfaction across various touchpoints, including customer support, product, sales and marketing.
Difference between NPS and CSAT
Customer Satisfaction (CSAT) is another metric that measures customer satisfaction, but it differs from Net Promoter Score (NPS) in a few key ways.
While NPS is based on a single question asking customers how likely they are to recommend a product or service to others, CSAT is typically based on a series of questions that ask customers to rate their satisfaction with specific aspects of the product or service, or the customer service experience as a whole.
For example, a CSAT survey might include questions such as:
- “How satisfied are you with the quality of the product/service?”
- “How satisfied are you with the speed of service?”
- “How satisfied are you with the friendliness of the customer service representative?”
Customers respond to each question on a scale, such as a 5-point scale (very satisfied, satisfied, neutral, dissatisfied, very dissatisfied) or a numerical scale (0-10). The overall CSAT score is calculated by averaging the responses to each question.
Another main difference between NPS and CSAT is the way the data is used.
NPS is a metric that gives an overall picture of customer loyalty and willingness to recommend, which can be used to understand the health of the business or brand, while CSAT provides a detailed picture of how the customer perceives your customer service. CSAT is used to pinpoint the specific areas that need improvement to increase satisfaction and loyalty.
While both NPS and CSAT are important metrics for measuring customer satisfaction, they provide different types of insights.
NPS is a good overall indicator of customer loyalty, but CSAT is more specific and actionable, it can be used to identify and address specific issues that are causing dissatisfaction. Using both metrics in combination can provide a more complete picture of customer satisfaction and areas for improvement.
Strategies to improve NPS
Improving Net Promoter Score (NPS) is of essence and this can be achieved through a combination of strategies, including:
- Prioritizing customer service: Make sure that your customer support team is well-trained, responsive, and equipped with the tools and information they need to effectively resolve customer issues.
- Proactively addressing issues: Regularly monitor customer feedback and use it to identify and address issues before they escalate.
- Building a knowledge base: Having a robust and up-to-date knowledge base can help your customer support team quickly and accurately resolve customer issues.
- Creating personalized experiences: Use customer data and interactions to create personalized experiences that build trust and loyalty.
- Empowering your team: Give your customer support team the autonomy and authority to make decisions that will improve the customer experience.
- Gathering feedback: Regularly gather feedback from customers to understand their needs and concerns. This can be done through surveys, interviews, or other forms of feedback gathering.
- Analyzing and acting on feedback: Analyze the feedback you receive to identify areas for improvement, then take action to address the issues that customers have raised.
- Communicate effectively: Make sure customers are aware of the resolution of their inquiry, even if the result is not exactly what they were hoping for, communicate the steps taken to resolve it.
- Continuously improve: Continuously monitor and improve your customer service by setting goals, tracking progress, and making adjustments as needed.
- Celebrating success: Recognize and reward customer service team members for their contributions to improving the customer experience and NPS.
It’s important to note that NPS is not the only metric to evaluate the customer support performance, and improving NPS will take time. The most important aspect is to create an environment of continuous improvement where the customer service team is encouraged to exceed customer’s expectations.