What is NPS?
Net Promoter Score® involves identifying dissatisfied customers and correct what is wrong. But also to find extremely satisfied ambassadors and make it easier for them to promote you to others.
NPS is essentially based on the question “to what extent can you recommend x to a friend or colleague?” and gives a key figure on the proportion of ambassadors (promoters) minus the share of critics (detractors). NPS show customers/employees real loyalty.
Net Promoter Score®
NPS= key figures on the proportion of promoters – proportion of detractors
Net Promoter System®
“NPS System” is the whole company’s improvement work linked to the NPS question. In addition to continuously adjust the NPS question after major events, it’s about building up routines and processes in order to act. The system then includes what you should act upon, how you contact customers, and whom that does it.
Measure continuously and act directly
NPS is best measured after important events in the customer and employee relationship and with relevant and quick surveys.
- For example, customers can ask the NPS question after a sales meeting, after the delivery, support and exit.
- In an employee relationship, it can be after the recruitment, introduction, PU call, and exit.
With Quicksearch feedback solutions you can listen to when the customer or employee has something to tell, in a way and in a tone that makes them understand that you are listening.
NPS helps you, for example with…
1) Conduct event driven surveys when “the feeling is fresh”.
2) Give automated reports to employees so that they can get an insight and act directly. In this way they can continually improve, for example, their service, their routines and behaviours.
3) Immediately detect risks and openings in relationships – continuous feedback can give you a head start before the competitors in more than 10 months.
4) Quicksearch gives you not only NPS in real time, but also warns you for dissatisfied customers which means that you can immediately follow up, solve your problems, and turn them into promoters.
+48
Our NPS value
+40
NPS for Swedish golf clubs
+38
NPS for Swedish restaurants
-51
NPS for Swedish telemarketers
Today it isn’t sufficient with traditional customer surveys!
The story behind Net Promotor Score® started in US where the consultant and researcher Fred Reichheld was interested for loyalty and customer satisfaction. After many years hard work with customer orientation, the feeling grew that traditional customer surveys didn’t give the right support to develop customer loyalty. The research led Fred back to the foundation, to the factor that has always been the most important question if we want to buy more- namely: If we are prepared to put our own credibility in the pledge, if we really recommend a company – well then, we are so pleased and secure in our choice that no other alternative is good enough
After extensive research in collaboration with Harvard Business School Fred established the model that measures the recommendation will and who proved to have a strong connection to loyalty, profitability, and growth.
NPS is currently the most popular and useable method to measure loyalty and to act.
How do you calculate Net Promoter Score®?
There is a very simple logic behind the value.
That’s the beauty of NPS.
Net Promoter Score® is a key figure based on the proportion that has answered 9-10 (promoters or ambassadors) minus the proportion 0-6 (detractors or critics) on a scale 0-10.
NPS can theoretical vary between -100 to +100. In Sweden, we find half of the businesses surveyed between -10 to +50.
The NPS value varies depending on different processes and are often higher for example in sales than in exit or support.
The purpose with NPS is…
- Increase profitability and growth. Studies show that that company that works with continuous monitoring of the sales and delivery process is more valuable than others. NPS shows in reoccurring studies a strong correlation with loyalty, profitability, and growth.
- Get a better reputation and more ambassadors. This is a part of creating growth. Gain feedback, find ambassadors and help them tell potential customers. NPS shows that if you increase the amount of ambassadors you then increase the recommendations from customer to customer (word of mouth).
- Reduce churn, i.e. customers/employees leaving us. By feedback find detractors (e.g. dissatisfied) and the reason why they are giving low score so we can find and improve directly. NPS gives therefore a churn obstructive effect.
- Increase ambition. An employee that works with NPS becomes more performance and development oriented.
- Develop winning behaviours. With continuously NPS measurements, the organization can increase their understanding about the employee and customers needs and get better at navigating correctly in relationships. Then you need to gather feedback continuously and be given to employees who himself can see positive behaviours avoid repeating negative habits.
Employees who are ambassadors contribute to growth because they create a better customer experience.
Employee Net Promotor Score® is based on the same methodology as NPS and involves measuring employees commitment and loyalty through asking the NPS question in internal surveys at different times. By measuring eNPS it is possible to ensure development of loyalty and economic growth.
Examples where you can measure eNPS :
• All new recruitments
• Every onboarding (introduction)
• All educations
• All internal projects
• Every staff appraisals
• The wage process
• The atmosphere every week/month/quarter
• Everyone that quits the job (exit)