Net Promoter Score (NPS) Net Promoter Score (NPS): The Ultimate Guide plus Free Email Templates

If you're an avid consumer of software, chances are you've gotten an email from a company asking how likely you will suggest the app or product to someone else (on the scale from zero to ten). In business, this is known as the Net Promoter Score (NPS) question.

In this guide will explore:

•         Introduction to Net Promoter Score
•         How do I figure out NPS
•         NPS benchmarks developed by industry
•         Strategies to improve your NPS
•         NPS as well as customer satisfaction
•         NPS email templates
•         Integration of NPS in business strategies
•         FAQs

Introduction to Net Promoter Score

Net Promoter Score (NPS) is a metric used to measure customer satisfaction and loyalty based on the simple question: "How likely is it that you would recommend our company/product/service to a friend or colleague?"

Customers typically answer this query based on a rating scale from 0 to 10. In based on the answers they are classified in three different groups:

1. Promoters (score 9-10) Promoters (score 9 - 10): They're highly satisfied customers who are likely to recommend the company to others.
2. The Passives (7 8): These customers are happy, but not thrilled. While they're unlikely to speak negatively about the business however, they aren't likely to actively advertise it.
3. Detractors (0 - 6) (0 - 6): They're unhappy customers, who could spread negative opinions about the business.

Net Promoter Score as the concept was developed through Fred Reichheld, a partner at Bain & Company, in a 2003 Harvard Business Review article titled"The number You Must increase. As a strategist for business, Reichheld was unhappy with the fact that he had to spend tons of money and resources on sophisticated customer satisfaction tools that don't generate useful statistics. So he tried to figure out a way to simplify the complicated survey process and still produce useful data.

After two years of research, Reichheld realized that the most efficient method was to find out what percentage of customers are willing to endorse a particular product or service to other people. The result is what we refer to as the Net Promoter Score.

Since its introduction, NPS has gained widespread use across the industry as a valuable tool for companies to evaluate and enhance the customer experience. The following are the reasons:

1. Quick and easy measurement: The ease of the NPS question makes it easy to use and for the customer to answer. This boosts the probability of customers participating, and provides businesses with a steady stream of feedback that will help them improve their processes continuously.
2. Measurement of customer loyalty: NPS provides a clear and simple way of assessing the level of customer loyalty. By categorizing customers into Promoters, Passives, and Detractors, businesses are able to gauge the general mood and likelihood of customers recommending their services or products.
3. Finding areas for improvement: analyzing NPS feedback allows you to pinpoint areas that a company could make improvements. Recognizing the reasons why customers are promoted or detractors allows companies to make targeted changes, improving overall satisfaction of customers.
4. Business growth predictor: Measuring NPS can help a business estimate how fast it'll expand. Promoters, for instance, are more likely to make repeated purchases, and also suggest the company to friends and family which can lead to organic growth with no significant marketing effort.
5. Benchmark comparison NPS allows businesses to compare their performance against industry benchmarks. This benchmarking helps businesses set achievable goals to improve and to understand where they are with respect to their competition with respect to customer satisfaction.
6. Engagement among employees: Because NPS is closely connected to the customer experience, it can also serve as a tool to measure and increase employee satisfaction. Happy employees are often the source of good customer experience, and NPS could be considered indicator of the internal health of a company.

How to figure out NPS

Here's a step-by-step guide to calculating your Net Promoter Score (NPS):

1. Send out a survey to your customers asking the NPS question: "How likely is it that you would recommend our company/product/service to a friend or colleague?" on a scale from 0 to 10.
2. Once you've received the answers, divide the participants in three categories based on the scores they scored:

• Promoters (score 9 - 10)
• Passives (score 7-8)
• Detractors (score 0 - 6)

1. Determine the percentage of respondents in each category. The formula is (Number of respondents for each category / Total number of respondents) * 100.

In other words, if you asked 250 respondents and 100 of them gave an average between 9 and 10, the percentage of promoters would be: (100 / 250) (100 X 100) = 40 percent.

1. Subtract the percentages of Detractors from the percentage of Promoters in order to determine your NPS. For example, if 40 percent from respondents have a Promoting attitude while 20% are Detractors, your NPS is 40 - 20 = 20.
2. The resulting NPS will result in a numerical value (as as shown in the 4th paragraph), which can be negative, positive, or zero. Interpret the score based on the improvement scale:

• Positive score (i.e. over 50) It indicates a strong trust in the customer and positive reviews.
• Low Positive (i.e. 30-50) It is a sign of a an acceptable, however not extraordinary customer loyalties.
• negative (below 30): This signals potential issues with customer satisfaction and a need to improve.

NPS benchmarks for industry

NPS benchmarks represent the net promoter score average for an industry or sector in a range of -100 to 100. They provide an opportunity for companies to assess their Net Promoter Scores compared with industry norms or other competitors.

Certain industries are naturally more or less average NPS scores. Technology companies, for instance, might have higher average scores than cable providers. Examining NPS benchmarks gives you insights on how you rank in your industry and what you can do to improve.

Here are two tables filled with NPS benchmarks for various industries, based on a 2023 study from Retently.

Table 1: For Business-to-Business (B2B) businesses

Table 2: For Business-to-Consumer (B2C) companies

Strategies to increase your NPS

If you're looking to boost the Net Promoter Score of your business here are some strategies you can try:

Inform your customers

By educating your customers, you're improving their knowledge of the product. You're helping them solve difficulties on their own, improving their experience as a user, cutting down on support requests, and offering an added benefit that can differentiate you from your rivals and build brand loyalty.

Ways to educate your customers are to include

• Product-specific training that includes tutorials, videos, and step-bystep guides
• Onboarding programs to help new customers to get acquainted with your service or product;
• Written documentation and guides like user manuals, FAQs and knowledge base articles to answer common questions and troubleshoot problems;
• Webinars and seminars which provide in-depth information about products' features, applications as well as best practices.

Help improve your customer experience and help

Excellent customer service is an important factor in customer loyalty and satisfaction. Be sure your support team is well-trained efficient, responsive, and capable of addressing problems with customers quickly. Implementing a customer-centric approach in your support operation could result in a higher level of satisfaction and, in turn, a higher NPS.

Customer interactions can be personalized

According to McKinsey's Next in Personalization 2021 study, 71 percent of consumers expect personalized interactions with customer support, and 76% of them tend to be more interested in purchasing from brands that personalize.

To improve the personalization of your marketing, examine their information, preferences as well as the history of your brand, if applicable. Understanding your clients in a more personal way helps you tailor your communication, offers, and recommendations in order to satisfy your clients' unique requirements.

A personalized experience can make a good impression on customers and increase their loyalty, which improves the likelihood of receiving positive NPS ratings.

Streamline your processes

Help to resolve issues in a proactive manner

Don't wait for your customers to complain before you resolve it. Instead, identify potential issues that could arise with your product or service before they escalate and solve them quickly. Being proactive shows your dedication to customer satisfaction and prevents detractors from leaving negative reviews of your business online.

Engage in and respond to feedback

Regularly seek feedback from customers. This is not just through NPS surveys but also through other channels like reviews websites, social media as well as customer forums. Actively listen to customer opinions and use the feedback to make tangible improvements.

Reacting quickly to feedback will show the customers you are interested in their feedback, and this will boost their willingness to recommend your company to friends and family.

Train your employees

Employees play a significant part in defining the customer experience. Therefore, you should invest in education courses that stress customers' service abilities as well as empathy and problem-solving. Employees who are engaged and understand the significance of ensuring that customers are satisfied are more likely to deliver positive experiences, leading to an increase in NPS.

Profit from positive customer experiences

Ask customers that are currently using your product to write positive reviews of the product or service on review websites. If you can, request them to make a short video of how beneficial your offer(s) have been to them. Include these favorable reviews and testimonials on your website and social media pages, and other marketing channels that you utilize.

Promoters are your brand endorsers, and their positive word-of-mouth can attract new customers, and help contribute to an increase in the number of NPS.

NPS and satisfaction of the customer

As of this article, the terms "customer satisfaction" and "NPS" were utilized in close proximity to the other. This is because even though customer satisfaction and NPS are different, they're closely linked.

A general gauge of how happy or satisfied a client is about a product, service, or the overall satisfaction. Customer satisfaction can be measured by a variety of methods, such as questionnaires, feedback forms or even reviews.

Customer satisfaction doesn't tell you the likelihood of your clients to promote your company in a positive way.

But it can contribute to the likelihood of an individual becoming promoted within the NPS framework. Satisfied customers are more likely to refer a business, and thus can positively impact the NPS -- which is in addition to measuring customer satisfaction, also measures branding advocacy as well as its possible impact on growth of business.

For using NPS to improve your customer service and experience There are steps to take:

Review feedback received from NPS

Begin by thoroughly analyzing the feedback you get through NPS surveys. Figure out what Promoters appreciate and dislike, as well as why they are on the fence while identifying where detractors have the issues. Look for common patterns and themes among those who respond.

Segment the feedback

After that, you can Then, segment the NPS feedback based on customer demographics, product usage as well as other factors that are relevant. This gives you greater insight into the customer experience across different groups. It makes it much easier for you to pinpoint the areas for improvement.

Prioritize areas for improvement

When you've analyzed and segmented your feedback, you'll likely encounter a variety of issues that your Detractors have helped you identify. Next, you must determine the areas for improvement that need to be prioritized according to the extent and frequency of issues raised within the feedback. Focus on aspects that will be most impactful on the overall level of satisfaction and loyalty.

End the feedback loop

Set up a closed loop feedback process for following up with those who have provided poor scores. Interact with them, discuss their concerns and inform them of the steps you're taking to improve their experience. Let them know you value their input and are committed to improving.

Incorporate feedback into product development

Enhancing customer satisfaction and experience is mostly about providing customers with what they want, and in the way they want it. When you're working in improving your service or product, make sure to keep NPS feedback in the forefront. Determine the issues that people are facing with your service, and then modify it so that it functions in the manner they would like it to -- not in the manner you believe you should.

Keep an eye on your NPS constantly

Customer expectations and preferences can change over time. Therefore, you should collect NPS and customer feedback regularly to measure the effectiveness on your improvements and keep up-to-date with changing demands. Utilize this data to create changes and provide consistently exceptional experience.

NPS email templates

Although some businesses are able to ask for questions about the NPS survey in their app or on their websites Most send it via the email. If you're planning to send an NPS survey, here are some best practices to keep in mind:

• Make it easy. Your NPS questions should be clear and understandable. In the absence of this, people could get confused, which can affect the accuracy of their responses.
• Make use of a standard scale. Certain companies employ a scale of zero to 100. However, it's best to stick with the standard 0-10 scale of answers. Not only will it be easier for customers to understand, but it also helps with the consistency of benchmarking and.
• Ask a follow-up question. Don't stop at answering the NPS question. Instead, include an open-ended question that asks the respondents to explain why they scored their score. This feedback is qualitative and provides the context needed to improve.
• It is important to send NPS surveys at the right timings. There's not a set time when you should mail an NPS survey. You're more likely to get responses if you send one after a purchase, customer service encounter, or particular point in the customer journey.
• Communicate results internally. Share NPS findings and data across the organization. This ensures that the marketing and sales teams, as well as customer service, and product development teams understand customer expectations and devise ways to meet their needs. '

If you're sending an NPS survey by email, this is a great NPS Email Template Pack you can utilize.

Integrating NPS into business strategy

Implementing NPS in your company's strategy is more than just collecting scores; it requires the commitment of using the feedback of customers to guide the strategic direction of your business and help drive improvement. It involves preparing action plans to address particular issues identified by customer feedback, and communicating plans to employees and externally.

Through fostering a culture of being responsive to feedback from customers and making tangible progress over time, you not only enhance customers' satisfaction and loyalty, as well as strengthen your position as a competitive player in the market.

Think about the use of Customer Education as a approach to boost your NPS Score. Look no further than Plus for a start.

Furthermore, Plus can scale to meet the needs of your customers as their base grows and your customer education plans evolve.

FAQs

What is a good NPS score?

What constitutes a good NPS score can vary in different the different industries. Although a score of at least 50 is generally the goal but some industries can have NPS scores that are lower than 50. Benchmarking your NPS score against industry standards or your competitors will provide greater information about your score.

How often do you need to determine NPS?

The frequency with which the calculation of your NPS needs to be based on elements like the nature of your business, industry and also the character of customer interactions. However, a general standard is to send out NPS surveys at least every two weeks or once a year. It is a reliable measurement of satisfaction with your customers and lets you track shifts over the course of.

Additionally, you can send NPS surveys at the time of product or feature launches or after specific customer interactions, like the onboarding process, a transaction, a contact with a customer or the conclusion of a project or the end of the subscription.

Can NPS help predict growth of businesses?

NPS has been shown to be an effective indicator and predictor of business growth. The basic principle behind it is that customers who are loyal and happy, also known as Promoters in the NPS framework will be more likely to purchase from a repeat store and become loyal customers and also actively promote their business to others.

How can we improve responder rates in NPS surveys?

For better response rates for NPS surveys, optimize the survey satisfaction. Keep the survey brief, with the NPS question, and a brief follow-up question, making it easier for participants to offer feedback. Conduct surveys at the right times to gather insights while your experience is fresh in the client's brain.

Make sure you personalize your surveys, explain the purpose of the survey and inform that respondents are protected from their feedback. You can also use multiple channels, such as texts, emails, or even in-app surveys, to reach a broader public, and also offer rewards to encourage customers to take part.