The NPS: a key indicator for your business strategy

What is the Net Promoter Score?

The Net Promoter Score is an indicator that allows us to know and measure customer satisfaction with a brand, product or service. It allows us to anticipate the potential word-of-mouth of a consumer, and is calculated from a specific question concerning the recommendation of the latter. 

Example : Would you recommend the use of this product to someone close to you? 

The answer to the question is on a scale of 0 to 10. The higher the score, the more likely it is that the customer will naturally talk about the brand in question.

According to the score given by the customer, the latter will correspond to one of the three following profiles:

  • Detractors : if the score goes from 0 to 6
  • Passive : if the score goes from 7 to 8
  • Promoters : if the score is 9 to 10
The different customer profiles

Detractors, score from 0 to 6

Detractors represent the “dangerous” profile for companies.

Often disappointed, they have the means to share their dissatisfaction through the many communication channels available to them. They can thus negatively impact the brand image. As soon as they are identified, these customers must be the subject of targeted action and follow-up plans in order to regain their trust and limit the degradation of the brand. 

Passive customers, score 7 to 8

Passive customers are generally satisfied customers but not satisfied enough to give blind trust to the company. The risk? Infidelity towards competing offers! They are difficult customers to convert.

Promoters, score 9 or 10

Promoters are the most loyal customers. They are willing to be true brand ambassadors to their friends and family. The score of 9 to 10 is deliberately high to ensure that customers are truly attached to the products or services offered by the company. 

Promoters represent a strong added value for the company and must be supported and rewarded accordingly.

How to calculate your NPS?

To get your NPS, you need to subtract the percentage of detractors from the percentage of promoters. The result is not expressed as a percentage but a number between -100 and 100. 

Example: You have 70% Promoters, 20% Passives and 10% Detractors. Your NPS will be 50. A positive Net Promoter Score (>0) is considered an indication of good customer satisfaction.

With a score around 50 or above, it is a very positive NPS! It is important to think about how you compare to your competitors in the same sector.

What are the different types of NPS surveys?

Relational NPS

The relational NPS evaluates the quality of the overall relationship with the customer and their loyalty without any particular recent interaction with the company. This score reflects the sum of customers’ past experiences with the brand. The focus here is on the overall and the long term. These surveys should be conducted on a regular basis (quarterly or annually) in order to collect enough data to assess the overall likelihood of recommendation. The objective is to obtain a vision of the customer’s feelings. 

The advantages of this method

  • to have a spontaneous NPS because it really allows to detect if a customer is attached to the brand (cold satisfaction survey)
  • obtain a follow-up over time, note changes and the degree of desirability of the brand
  • identify detractors to anticipate and establish action plans

 

The limits of this method 

 

  • the survey is not always consistent with the customer’s needs and experience (if the customer was disappointed 3 months ago, the survey is probably too late)
  • it is complicated to compare one’s relational NPS score to competitors because companies rarely communicate it

Transactional NPS

On the contrary, the transactional NPS is obtained with a “hot” survey. This involves questioning the customer about a specific contact point that you consider important. 

The survey is usually done after an interaction with the brand such as 

  • a purchase
  • the subscription of a service
  • a call to the support platform
  • the use of an application

 

The advantages of this method

 
  • Identify a problem almost in real time so that it can be passed on to the relevant teams
  • Understand the needs and dissatisfactions of customers at each stage of their journey and be able to work on a precise improvement axis
  • Be able to compare your results with the different departments in your team.
    The transactional NPS is therefore an excellent way for network managers, regional managers or store managers to better manage the cohesion of their teams.
 

Limitations of this method 

 
  • Continuous involvement of the teams (a significant daily investment)
  • This method is not sufficient to detect real ambassadors
  • Not always sufficient to understand the customer’s frustration, it is sometimes necessary to combine it with a satisfaction questionnaire
Note : both methods (relational & transactional) are complementary.
 
The relational NPS will help your management team to decide on long-term strategic orientations, to review the brand’s values when they no longer meet customers’ expectations. And the transactional NPS will allow you to get closer to your customers and ask them if they recommend your brand.
 

eNPS

Not always mentioned, the Employee Net Promoter Score is another way to get a satisfaction score. The eNPS measures employees’ job satisfaction but also their willingness to promote the company as a place to work. 
It is a useful indicator for employers to monitor their company and adjust their social and economic strategy.
 

How to use your NPS?

Once you have obtained an NPS score, you will have a global view of your customers’ recommendation level.
However, one last step is essential: detail all the data collected! This will allow you to obtain more reliable and relevant information. 
 
If your Net Promoter Score is 25, you can have 60% promoters and 40% detractors or 45% promoters and 20% detractors. These two cases have a totally different meaning and the actions to be taken are not the same.
 
To be effective in your analysis and interpretation of the NPS, there are two fundamental elements to take into account: 

 Segmentation

Segmenting your customers’ feedback is the best way to identify trends and to visualize the differences in experience between different targets. Adding socio-demographic questions to the survey allows you to differentiate the scores of different consumer segments. This way, you can visualize the variations in scores between your different targets. This segmentation can be done by age, gender, geographic area or buying behavior.
Thanks to segmentation, you can identify areas for optimizing experiences and improve the customer experience of a particular segment.
 How to use your NPS?

 The context

Taking into account the company’s sector of activity is also important to correctly interpret this loyalty indicator. You can therefore compare your NPS score to your market in order to situate yourself and set a margin of evolution/improvement compared to the competition. For example, if you have a very good NPS of 50, but the industry average is 55, then this means that you still need to take action.
 
The average score difference varies by sector. A score can indeed be considered as low or high depending on the field of activity of the company concerned. People are more likely to recommend a school than a bank. 
The education sector has an average NPS of 71 while finance is at 31. 
 
Some digital tools such as Satmetrix allow you to have an overview of the competition with the average NPS of the leading companies on your market.

What to do with the NPS comments?

The NPS comment is the answer given at the end of the questionnaire (during the qualitative question). This question is a key element of the NPS survey because it provides valuable information for future improvements. 
 

Optimize the response rate

To ensure that consumers respond and that the feedback is relevant, you need to think carefully about the qualitative question you ask. This question should be consistent with the survey and chosen based on previous feedback you have received. 
If the response rate is too low, it means that you have to change the question and that it is not meaningful enough for the customer. 
 

Exploit these comments well

Customer comments are textual and unstructured data that are complicated to analyze and sort. However, they can provide high value-added information that it is essential to take into account.
Sorting and prioritizing these verbatim manually is a time consuming task due to the amount of data to be analyzed. Today, you can call upon market research companies or marketing agencies to outsource this step.  
These companies will quantify and classify the feedbacks in order to provide you with a tailor-made assessment, so that you can put in place an efficient and coherent action plan. These services are time-consuming and costly, which can be difficult to handle when dealing with urgent feedback.
 
The latest technological advances allow software like Noota to sort and analyze textual data in record time and at a lower cost. The tool collects your comments in CSV format and detects the themes and topics that are most urgently needed. This information is then accessible through clear and precise graphs. You get structured, classified and quantified data.

Clearly, Noota allows you to know :

  • the topics most mentioned by the participants 
  • if the answers given are positive or negative
  • the most urgent and most enthusiastic elements


You can then modify the information and create categories of responses to classify them according to your objectives. These tools are efficient and much less expensive than external services.

With Noota the process changes, you can process hundreds of thousands of lines of comments in a few minutes and extract the most relevant elements that will allow you to make informed decisions for your business while saving costs compared to using an internal resource or outsourcing this service.

The Satisfaction/Importance Matrix 

Once you have collected enough feedback and structured your data, you can focus on the strategy to implement. To do so, you will need to classify the elements.

  • Enhancing and communicating the elements that are important and that generate good satisfaction
  • Maintain elements that are relatively low in importance but generate good satisfaction even if they are not a key strategic issue
  • Monitor elements with relatively low importance and poor satisfaction. These have little influence but should not be changed.
  • Prioritize those elements with high importance and low satisfaction. Your actions should focus on these attributes because they can be penalizing.


Note
: to obtain complete and exploitable data, it is always interesting to combine the NPS score with other digital techniques. Also, adopting a customer culture within your business strategy will significantly increase your performance!

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