What Is A Net Promoter Score?
Every business relies on its customers. They need customers to have a good experience, keep coming back, and ideally, talk about their good experiences with their real and virtual networks. Conversely, when customers start becoming unhappy, even established companies can suffer a downturn.
The idea of customers being your advocates is measured in a Net Promoter Score (NPS). A company’s NPS is a direct measure of how many customers actively promote the company, how many are indifferent, and how many are open detractors.
NPS is a clear way to measure how customers see you. It is an imperfect measurement, but still an important one. By seeing the broad outline of external perceptions, a business can identify areas to improve and train their employees to turn customers into promoters.
How a Net Promoter Score is Calculated
Measuring happy and unhappy customers is very straightforward. Companies have a simple, one-question survey: on a scale of 1-10, how likely are you to recommend our brand/product/service to friends, family, colleagues?
The responses are broken down into three levels.
- 9-10 Promoters. These are loyal enthusiasts who will talk about a brand to their networks. They’re going to keep buying and keep recommending. These customers are key to growth.
- 7-8. Passive. These customers are satisfied, but not overwhelmed and not loyal. They could easily switch – but they are also on the verge of becoming promoters.
- 1-6. Detractors. These customers are, for whatever reason, unhappy. While not all are open detractors, they could easily spread bad word-of-mouth and create negative perceptions of a brand. They can slow down growth.
To calculate overall NPS, you subtract the percentage of detractors from the percentage of promoters. The scores range from –100 to 100. The higher the score, the better.
If you have 65% promoters and 35% detractors, your NPS score is 30. That’s not great, but it is above average. If you have 20% promoters, 10% passive, and 70% detractors, that’s -50. That indicates a lot of room for improvement.
As is clear, it is much easier to have a negative score than a positive one.
Why Are Net Promoter Scores Important?
An NPS score is important because it roughly measures how your brand is perceived in the world. In and of itself, it doesn’t mean anything. It isn’t legally binding, nor is it a complete picture. But in a world where a company can tank because of a bad run on social media, having a handle on NPS can help keep a business steady.
It is also important because most brands see themselves as popular. That makes sense: the people inside them work hard and care about their job, and are likely to see the good rather than the bad. At the higher levels of management, connection with on-the-ground satisfaction is more challenging to come by.
Net Promoter Scores are a great way for everyone in the company to gauge customer enthusiasm, and to clearly see what needs to be worked on.
At the end, a brand’s NPS score isn’t a reward, but a spur to action.
The Problems With Relying (Solely) On a Net Promoter Score
While the NPS is a great measurement, it can’t be the sole way a company sees itself. There are a few reasons for that.
- It only captures one distinct moment in time
- The simple 1-10 isn’t very nuanced
- Customers recommend or don’t recommend for a number of reasons, so it might not accurately capture their happiness with the product
To expand on #3, there are some people who are very happy with a product but don’t like making recommendations or even just taking surveys.
In order to get more data, it is important to take more surveys, such as Customer Satisfaction surveys that capture customer emotions and perceptions at different touchpoints during the sales and customer service cycles. That way, companies have a more detailed look at how customers feel.
Or, more succinctly, NPS captures how your customers feel. CSAT surveys ask why they feel that way.
How Does Customer Service Impact NPS
There are a lot of aspects that go into a NPS score. The most important, of course, is the one thing that marketing and sales teams can’t really control: the quality of the product or service. A great product promotes itself, a subpar one can’t be saved by the best customer service in the world.
But customer-facing roles matter a lot. When people evaluate their overall experience, they think a lot about their direct interactions. Whether this is during sales, during billing, or if they are experiencing a problem that needs troubleshooting, they’ll depend on positive interaction. This can include:
- Empathetic customer service reps
- Being spoken to as a person, in plain language
- Having their problems solved
- Having their time respected
When customers call your company, they want to be treated as people. They want to be listened to. They want to be understood. And they want their problem solved or their goal achieved.
No one wants to be a company that makes people say “fine product, but terrible service.” Impeccable service leads to happier customers. It increases Promoters, keeps Passive customers from jumping, and can even reduce Detractors.
How AI Coaching Can Improve Your NPS
Improving customer service is the goal of any organization. When customer service reps feel confident and empowered to solve problems, they create better customer experiences, and that can lead to higher Net Promoter Scores.
One of the best ways to improve customer service is to give customer-facing employees more training in real-world situations. The ideal is to create these situations without real-world risk. Guided simulation training is key to this. If it can be done without taking too much time from experienced reps, the training works better.
AI coaching platforms offer real-world scenarios with the ability to measure tone and empathy, as well as more concrete metrics. They offer advice and guidance, helping managers understand areas of needed improvement as well as achievement.
That improvement matters. Customer reps with AI coaching offer better service, and that creates better customer experiences. Those experiences translate into higher NPS scores.