Over 31 million businesses operate within the United States. The intense competition is palpable even when you’re in the local market. If you want to stand out from the rest, offer beyond satisfactory service.
Do you want your business to flourish? Without a lot of experience, you might wonder how to increase customer satisfaction.
One of the best ways to improve the satisfaction of any customer you have is by learning your Net Promoter Score (NPS).
Read on as we discuss some reasons to invest in this method starting today.
- Improve Customer Loyalty
When your customer is happy with your services, they will become loyal to your brand for a long time. Focus on retaining your existing clients since it is more cost-effective. After all, getting a new customer costs five times more.
Repeat customers are vital when you want to maintain your business’s success. The best way to learn how to improve is through NPS. After all, it is a customer satisfaction survey.
NPS establishes the likelihood of your customers to recommend your business to other people. It also measures your current business reputation.
- Measure Business Performance and Growth
The Net Promoter method uses a system guaranteed to make a massive impact on your growth. It gives a reliable metric to measure your performance—honest customer feedback. You will learn about their real opinions instead of your marketing team’s assumptions.
NPS metrics also reveal your business potential for repeat customers and referrals. Once you learn these statistics, you can determine your future growth. When you have the highest NPS scores in your industry, you will outperform your competitors twice over.
A decent NPS score ranges between +30 and +40. Your goal depends on your current industry. Regardless, a score over +50 is outstanding.
When your score is less than zero, start getting concerned. It’s a sign your business has more detractors. Customer experience issues likely plague your service.
- Get Real and Actionable Feedback for Improvement
A proper NPS system allows you to delve beyond the scores. Introduce more questions in your surveys to prompt customers. It lets them elaborate on the reasons behind their score.
Your customer insights are fast and actionable. It helps improve your business by identifying your unsatisfied clients. Giving them a platform for feedback lets you discover critical issues causing them to turn away from your business.
After fixing the issue, you can now convince them to go back. Fixing these issues also prevents you from losing more customers down the line. It protects your future revenue since you have a more loyal customer base.
- Discover and Leverage Promoters
Modern buying behavior often depends on word-of-mouth referrals. You usually notice this trend on social media platforms. The vast majority of consumers trust recommendations from friends and family more than other advertisement methods.
Using NPS allows you to find your promoters. These are the people who love your business and aren’t afraid to tell the world. Through these people, you can increase positive referrals through word-of-mouth.
Capitalize on the people giving your business a score of 9 or 10. Ask for a testimonial or encourage them to share your business on social media networks. These people are ten times more valuable to your business than detractors.
When you can’t contact your customers, invest in online customer experience platforms. It can do this task automatically.
After your customer surveys, show your gratitude for their feedback and ask for a testimonial. When they lack time, give pre-written content they can easily share on Facebook or Twitter.
- Benchmark Against Your Competition
Using an NPS means following a recognized system worldwide. It’s an easy method of setting a benchmark against your industry competitors. As a result, you can better track your progress as time progresses.
You have enough data to have a reliable set of industry benchmarks since most companies use NPS. You will discover whether your company is performing to a desirable standard.
How to Calculate NPS
Now you know the reasons to use NPS for your business, it is time to learn more about it. The easiest way to start is to ask your customers a single question:
“How likely are you to recommend us to a friend or colleague?”
These people can answer a question using a scale from 0 to 10. The former represents “highly unlikely” while the latter is “highly likely.”
You can group the responses into three categories: promoters, passives, and detractors. These are the scores to identify your customers:
- Promoters: 9-10 scores
- Passives: 7-8 scores
- Detractors: 0-6 scores
Tally all the scores to get the percentage of detractors and promoters. Subtract the former from the latter to get your final NPS score.
For example, if you have 100 responses and got 60 promoters and 20 detractors, your NPS score is +40.
Common NPS Calculation Mistakes
NPS is simple to understand and use. However, you must follow a strict set of best practices. It allows you to achieve an accurate and impartial measurement.
When you breach these practices, your score will either be too low or too high. The latter is tempting to ignore since it is what any business owner aspires. However, this assumption is more damaging to your business.
For example, if you believe your business has a solid 80 NPS score, check once again. The score might not reflect reality since you might use leading questions on the survey. Sometimes, you might include a lot of questions to dilute the impact of the results.
Worse, you might cherry-pick the positive responses or tie financial rewards to higher-scoring responses. Avoid these biases and focus on getting honest reviews.
Read this guide from CheckMarket if you want to learn about the differences between CSAT, CES, and NPS.
Use NPS to Improve Your Business Now
These are some reasons to use NPS for your business. Never let pride interfere with your improvement journey. Use the metrics to measure your business success.
However, using the NPS is only the beginning. Take a load off your company by collaborating with outsourced helpers.
Are you looking for more informative guides? Start reading our other posts today.