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When you start working on marketing campaigns, especially ones that focus on word of mouth and referrals, there are a few phrases and KPIs you see pop up again and again. One of these common KPIs is the Net Promoter Score.
At its core, Net Promoter Score measures how likely your customers are to share your brand. However, when you dig a little deeper you quickly start to see how much more extensive this particular KPI’s impact can be.
From customer loyalty to the effectiveness of your customer service, your Net Promoter Score can provide insights into the inner workings of your marketing campaigns and business as a whole. All you need to know is how to use it!
Understanding Net Promoter Score
There are many ways for a company to measure customer loyalty and predict business growth. However, finding your Net Promoter Score (NPS) is one of the most straightforward and effective paths.
When you look at a pool of customers, they can be separated into three groups: Promoters, Passives, and Detractors. These categories describe how likely they are to talk about your brand to others and what they’d have to say about you.
NPS is determined by taking a survey of your customers, and asking them “On a scale of 0 to 10, how likely are you to recommend our company to a friend or colleague?” Based on their response, they will then be placed in one of the three groups.
- Promoters (9-10) - Happy, loyal customers who are excited to share your brand, provide social proof, and contribute to the word-of-mouth buzz around your company
- Passives (7-8) - Folks who are satisfied with your brand, but not enthusiastic enough to promote it unprompted. They are not a help or a hindrance
- Detractors (0-6) - For one reason or another, these customers are unhappy with their experience of your brand, and are at risk of spreading negative information about you
Once you’ve collected your data and made your groups, you can do a few simple calculations to get your final NPS.
Find the percentage of respondents who were detractors and promoters, then subtract the detractor number from the promoter number. This will give you a result between -100 and +100.
The higher your NPS, the more likely you are to grow and scale your business. People are sharing your company with their friends, and with a little push from a referral campaign, you can turn those conversations into exponential growth!
Benefits of Using Net Promoter Score
As much as “information is power” is fun to say, there’s more to NPS than simply knowing what your customers think of your brand. By putting in the effort to find your NPS, you’ll have a huge leg up when
- Identifying Customer Loyalty Levels - Customers who are willing to freely share your brand with their network are likely to stick around for the long term
- Measuring Customer Satisfaction - The happier a customer is, the more likely they are to talk about your company
- Predicting Business Growth - Generating buzz around your company and getting recommendations from existing customers is one of the fastest paths to organic growth
- Comparing Customer Experiences Across Time - As your company shifts and grows, you can use NPS to see exactly how customers are affected by changes and improvements
- Competitive Advantage - A consistently high NPS helps you stand out from your competition, and measuring your score against other companies shows how you stack up in terms of customer satisfaction
- Identifying Advocates - Customers who provide a high NPS rating for your company would be prime candidates for a referral program or even a brand ambassador position
All of this makes NPS one of the more powerful marketing KPIs in your arsenal.
Implementing Net Promoter Score
Several steps go into designing, calculating, and utilizing your NPS. Having a clear picture of where you’re going and what you hope to accomplish can help keep things grounded and on track.
Step One: Setting Goals
While lots of information can be gained from an NPS survey, having a clear target in mind helps you fine-tune your question and zero in on the data you’ll actually use. This goal could be anything including
- Understanding Customer Satisfaction
- Identifying Areas For Improvement
- Measuring Loyalty
- Assessing a New Feature, Product, or System
- Gauging Interest in Ambassadorship
- Laying Groundwork for a Referral Campaign
Choosing one or two of these goals will help keep the survey streamlined.
Step Two: Define Touchpoints
When you ask for information can be just as important as what information you’re asking for. You might design your NPS questions to go
- In Post-Purchase Emails
- After Customer Service Interactions
- During a Website Visit
- Upon Opening an App
Each of these touchpoints will lead to different types of interactions with your user base, as they will have different experiences with your brand top of mind.
Step Three: Choose the Right Question
The wording of your question is vital to getting the information you need out of customers. The most common phrasing is “On a scale of 0-10, how likely are you to recommend our company to a friend or colleague?”
If you’re looking for more specific information, like thoughts on a new product, overall customer experience, or professional referral likelihood, you might want to tweak this wording for your purposes.
Step Four: Consider Follow-Up Questions
While the quick response time makes users more likely to respond to a survey, follow-up questions can make a huge impact on the usable data you get from your NPS. You may want to ask
- What is the primary reason for your score?
- What can we do to improve?
- What additional features would you love to see?
Do your best to keep these follow-ups specific and brief, as a long survey won’t garner the results you’re looking for.
Step Five: Analyzing Feedback
Use the NPS formula to calculate your current score from -100 to +100. This number is a simple, easy-to-understand way to communicate your customer satisfaction and likelihood of word-of-mouth growth.
If you included any space for qualitative feedback, look through the answers to find key themes and areas for improvement. Maybe people consistently praised your customer service but railed on your website usability. This shows you your strengths and lets you know exactly what you need to focus your efforts on next.
Net Promoter Score Best Practices
Every Net Promoter Score Survey is going to be unique, but there are a few key tips and tricks that work across the board for getting the most out of the data you collect.
Tip One: Keep The Survey Simple
If answering your survey takes one or two clicks, you can nearly double your response rate from a longer survey. You want to ensure the questions are as straightforward and to the point as possible.
Use qualitative questions sparingly, and focus on the main goal of your survey. Ultimately, the less time you are taking out of your customers’ day, the better.
Tip Two: Utilize Segmentation
A recent study showed that the average response rate for online surveys is around 44%, but this number jumps when your survey is targeting a specific group of people and is tailored specifically to them.
This might mean only having the survey pop up after specific interactions, or sending the survey to repeat customers, or those who have left a review of your products online. Whoever you decide to target, make sure your survey is worded in a way that lets them know they were chosen for a reason.
Tip Three: Track NPS Over Time
Because its uses are so vast, NPS is a great indicator of customer sentiment over time, especially when you make changes to your business structure.
Any time you introduce a new feature, shift your customer service ethos or make any other major changes to your brand, you can re-run the survey and see how customer sentiments have shifted. This shows you what’s working and what needs a little more time.
The Bottom Line
If you can fully understand and utilize your Net Promoter Score, you hold the keys to success for your marketing campaigns and the company as a whole. This simple metric not only measures your customers’ willingness to share your company, but also provides valuable insights into loyalty, growth potential, and overall satisfaction.
By taking hold of your NPS, you can optimize your marketing strategies, plan referral programs, improve customer satisfaction, and ultimately drive growth for your business.
If you have a high NPS and don’t know how to harness it for growth, check out our library of information on kicking a referral program into high gear! With ReferralHero by your side, you can 10x your company in record time.
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