Back in 2003, Frederick F. Reichheld, a consultant with Bain & Co., established the Net Promoter Score (NPS) to help companies gauge customer happiness and loyalty. It was based on a single question survey asking “how likely are you to recommend our brand or product to a friend or colleague”, helping organizations monitor their customers’ health with the help of this customer satisfaction benchmark.
NPS is a highly attractive customer feedback tool because it is accurate and user-friendly. The calculated score is easy to interpret and respective customer service teams can distribute data to other teams, such as marketing, sales, and product development for further analysis.
For many businesses, NPS remains the cornerstone of their feedback collection procedure. As a matter of fact, a lot of them invest in improving NPS to increase customer delight and satisfaction. So, NPS is an important performance indicator for your business.
For better understanding, let’s explore the benefits.
1. Improve Customer Satisfaction: NPS allows you to see directly how satisfied customers are with your brand or service. The primary aim is to make customers happy and satisfied, and NPS provides you with the opportunity to measure this with ease and precision.
2. Evaluate and Increase Customer Loyalty: NPS scale not only allows businesses measure customer satisfaction but also determines how many customers are true loyalists of your brand. By measuring customer’s happiness, you can evaluate their loyalty. If the score is high, customers are happy and satisfied. If the score is low, the majority of customers are dissatisfied. You can utilize the power of modem data integration platforms to keep a track of customer lifecycle as well as their behavioral patterns in general.
Tip: You can use NPS to measure the score initially, and revaluate it later to see if your strategies are results-driven or not. This empowers your business by helping you measure loyalty and identify loopholes if any.
3. Create More Advocates: Customer advocates are the resultant of customer loyalty. Now, customer advocates are the ones who are the enthusiastic promoters of your brand. By spreading a positive word of mouth, you can broaden your business contours in all directions. So, if you want your business to flourish, you need to create more brand advocates, and it’s not as easy as it sounds. Luckily, your NPS will provide you with a clear idea of your customers' advocacy and how it can be increased. Read our blog “3 NPS practices for delivering delightful “Harry Potter-like” Customer Experience” to know more.
4. Alleviate Churn: While promoters are an important aspect of your business, you must also focus on how to reduce customer churn. You can use NPS to identify your detractors and passives and seek feedback from them to understand the shortcomings. After recognizing and comprehending their needs and demands in toto, you can make changes in your brand or product. You can, therefore, turn passives or detractors into proud promoters of your brand.
5. Streamline Growth: Finally, NPS plays an important role in driving growth by helping you increase customer delight and create brand awareness. The number of promoters in your survey can be used to evaluate your position among your competition, opening the doors for growth and innovation.