Whether you’re a small business or a large corporation like Amazon, all your consumers want the same thing. A flawless, stress-free experience across all digital channels and at every stage of their customer journey.
And the statistics agree:
- Almost 90% of consumers are happy to spend more for a better customer experience
- Over 10% of customers who have a negative experience will share this information with over 15 other people
But how do you keep an eye on this – and how do you improve such a broad thing as the customer journey? Net Promoter Score (NPS) can help to determine whether or not a customer is willing to recommend your company to other people. We’ll explore the five best ways you can use NPS to further develop your customer experience, increase customer retention, and improve overall business growth.
But first, let’s take a look at what NPS actually is and why your business should care about it.
What is NPS?
As we mentioned above, NPS is a business metric that allows you to quantify customer loyalty and satisfaction. The power of NPS, and the main reason it’s one of the most popular metrics in business, is that it’s quick and easy to assess. NPS revolves around one core question: “how likely are you to recommend this product/company to someone else?”.
How does NPS work?
Customers rate your product, service or company based on how likely they are to recommend it on a scale from 1 to 10, with 1 being very unlikely to recommend you and 10 being certain to. All consumers are then categorized into three distinct groups based on their ratings.
Detractors – these are customers who rated you from 0 to 6
Passives – these are customers who rated you either 7 or 8
Promoters – these are customers who rated you either 9 or 10
How do you calculate your overall NPS score?
NPS is calculated by working out the percentages of each category and subtracting the percentage of the promoters from the percentage of the detractors. The passives are not included in NPS, as they are closer to neutral than negative or positive.
For example, let’s say you’re a software development company. You have recently created some video call applications that can be used as alternatives to Facetime. If you survey 100 consumers and 70 people give you a rating of 9/10, 5 people give you a rating of 7/8, and 25 give a rating between 0-6, then your products’ NPS is 45.
Why should you pay NPS any attention?
Word of mouth marketing (including online word of mouth, like social media posts and online reviews) is crucial for business success. Over 90% of buyers use and trust the opinions of friends and family over the views of company’s and adverts, and over 70% of buyers state that word of mouth is the most crucial deciding factor in their purchasing decision.
NPS allows you to clearly identify whether or not customers believe your company, products, or service should be recommended. This valuable indicator lets your company know whether you’re on the right track or whether changes need to be implemented.
Let’s have a look at the best ways you can leverage NPS to improve your customer experience.
1. Have a strategy
Before you begin something like product development, you normally acquire the right team collaboration and project management tools to create the best plan of action. This should also be the case for your NPS strategy.
Companies that are really serious about improving their quality of service show this to their customers from the first point of contact. It’s impossible to have every consumer be a promoter of your company and brand. So, it’s vital to devise a proactive plan to deal with each of the three customer categories.
This means understanding that they all need to be treated differently. Interacting with customers in a personalized, tailored and human manner is one of the most effective ways you can show them that you care about their opinions and overall experience.
Let’s break it down.
How to deal with the passives?
We’re starting with these first, as they can often make up a high percentage of your NPS score. Luckily, you can often turn them into promoters with the proper reaction. These customers may just be individuals that rarely give out of 9’s or 10’s. If that’s the case, offering them some form of special treatment such as a discount can be incredibly effective.
Here are a few more tips you can use when managing passive NPS responses:
- Reach out and understand how or what you can do to delight them.
- If they purchase your product or service again, exceed their expectations with a free gift or offer.
- Personalize your interactions to build a stronger customer relationship.
What to do with the detractors?
Companies that want to improve should never shy away from criticism. Your strategy for dealing with detractors should revolve around taking their complaints and learning from them. This includes sending out follow-up surveys, gathering insights, discussing feedback with your team and taking advantage of all digital customer service channels to constantly prioritize what the customers want. We’ll look at this in more detail later.
Don’t neglect your promoters
While promoters may be satisfied with the current experience you’re providing, it doesn’t mean their journey is over. Why not give them the opportunity to talk about how great their customer experience was?
Social media sharing and reviewing is something people love to do, and, as we mentioned above, this word-of-mouth marketing can be incredibly effective.
Provide promoters with the framework to carry this out. Whether it’s adding social media buttons to your website, having specific company hashtags they can use, or creating a loyalty scheme, encourage them to interact with you more — and talk about you publicly.
2. Gather more insight
NPS is effective because it can be completed in seconds. However, due to its lack of specificity, it can often leave companies more confused than before. Gathering more insight and business intelligence is one of the best ways you can indirectly improve customer experience.
Conducting follow-up surveys is an excellent way for you to get to the core of issues or even discover why certain customers support you. This is why leveraging NPS follow-up surveys should be the main priority in your NPS strategy.
Let’s start with a few survey tips.
The reason NPS is so effective is due to its short completion time and high response rate. So, your survey needs to be as efficient as possible:
- Clearly state how long it will take them to complete
- Offer the survey in more than one language
- Make the survey compatible with all devices
- Use open-ended questions
- Personalize surveys based on the customer’s NPS rating
Here are some of the best open-ended questions you can include in your NPS follow-up survey:
- What did you like or dislike the most about your experience with our company?
This question applies to all of the categories and can be personalized to promoters, detractors, and passives. For detractors and passives, it gives them an easy platform to vent about any issues they had. This insight can be directly used to improve your business practices. For promoters, you can find out why they value your service and continue to focus on these positives.
- Why did you choose us over any other brand or company?
This question can provide you with answers to how your customers perceive you. For example, are you the cheapest? Perhaps you provide the highest quality products? Maybe they just like your brand image. The aim here is to ensure that what you perceive your company aligns with your customer’s perception.
This is crucial for the customer experience. Let’s say you’re a company that is considered the cheapest option on the market. This lets you know that increasing your monthly subscription with little warning is likely to cause negative customer experiences and result in churn.
- How can we improve your experience in the future?
This question aims to provide you with sufficient information to close the feedback loop. Let’s say that you’re a company that offers headless ecommerce advice for large enterprises and have recently received a poor NPS score. Asking this follow-up question and acting on the guidance can win the client back over, or at the very least, ensure that they don’t carry out the negative word of mouth communication.
3. Improve your customer service
When you’re improving your business, you’ll often scour the internet for information about the best customer service options and read articles with titles like “Call center solutions – How to choose the best one for your business.” All of these improvements are irrelevant if you ignore the mistakes you’re making right now.
The antivirus company McAfee received a consistently low NPS score due to their automatic rebilling of the customer’s subscription. The rest of their customer service may have been sublime, but due to this error or bad practice, their score suffered — and so did their reputation.
NPS scores and follow-up surveys can help you pinpoint exactly why your customers are having a bad experience. This is why it’s crucial for you to conduct regular surveys and monitor your progress.
Anything from terrible telephone wait times to untrained employees can tarnish your brand’s name and cause an adverse effect on your company’s growth potential. Luckily, vigilant NPS monitoring, assessment and analysis can help nip a problem in the bud before it escalates into something headline-worthy.
4. Improve your company’s product or service
The other culprit of a negative customer experience and poor NPS score is a product or service that doesn’t fulfill the customer’s expectations. This can include things like:
- A product that looks or functions differently than what was advertised
- A new product feature that negatively impacts the customer experience
- A product release that doesn’t align with a company’s values —for example, sourcing products unethically
- A persisting bug or fault that has not been addressed for a significant time.
Using NPS scores and asking the right questions in the follow-up survey can significantly improve your company’s product or service. Not only that, but the correct reaction can help to improve customer experience and show that you value your consumers’ opinions.
For example, Tesla CEO Elon Musk received product feedback from a customer on a specific element of the car’s steering wheel. He liked the idea and immediately implemented it. This made the customer feel like their opinion was valued and showed how important team collaboration was to Tesla, even extending that collaboration to its customers.
We’re not saying that you should do this for every suggestion, but listening to the feedback, closing the loop and making it publicly known that you value customer suggestions is crucial to improving customer experience and increasing word of mouth marketing.
5. Use NPS to segment and delight
As we mentioned in the first point, offering well-timed reactions is an excellent way for you to flip detractors into promoters and turn promoters into life-long customers. One of the best ways you can do this is by using NPS to segment your audience and create loyalty.
Segmentation is the process of splitting up your audience into specific categories based on certain attributes. In this case, the attribute is NPS scores and whether customers fall into either the detractors, passives or promoters group. Combining NPS segmentation with other categories such as age, gender, geographic location, etc., can help you to narrow down the best way for you to target and delight these customers.
For example, let’s say that you’re an international gaming company launching a new product. If there’s a correlation between the NPS detractor category and a specific geographic location, this may indicate that the product has language or cultural problems. Publicly addressing this issue and swiftly resolving it is the key to improving customer experience.
All businesses, regardless of size, should be looking to improve their customer experience, whether that’s customer service, business practices or the actual product. Accurate and consistent feedback enables a business to determine if they’re on the right path.
NPS is an efficient and quantifiable way for you to discover if what you think about your company is also how your customer feels about your company. Let’s quickly recap the best ways for you to leverage NPS to improve your customers experience:
- Make a plan. It’s important to realize that customers think and act differently, and therefore, they need to be treated differently.
- NPS metrics are easy to collect and analyze, but they can sometimes lack key information. Gather more insight from follow-up questions to find out exactly what your customers expect.
- Customer service is vital in business, and one bad experience can adversely affect your scores. Use NPS metrics to find out how you can improve.
- Good customer service isn’t enough for business success. Your product needs to be excellent. Relay NPS information back to your product team and improve your results.
- NPS data doesn’t need to be used in isolation. Combine it with other data that your company collects and create a multi-faceted approach to improving customer experience.
Elea Andrea Almazora, RingCentral US
Elea is the SEO Content Optimization manager for RingCentral, the leader in global enterprise communication and collaboration solutions on the cloud. She has more than a decade’s worth of experience in on-page optimization, editorial production, and digital publishing. She spends her free time learning new things.