For any business, measuring customer satisfaction, and acting upon the findings, is key to success, growth and reputation.
There are a number of ways to understand the customer experience, including measuring the net promoter score of your business.
What is a net promoter score?
Net promoter score, or NPS, is a customer satisfaction metric that measures how loyal customers are to your company and how likely they are to recommend your product, service, or business to others.
The NPS is calculated by asking customers a question along the lines of: “On a scale of 0 to 10, how likely are you to recommend this product / company to a friend or colleague?”
Calculating the NPS score
Once your customers have answered the question, they are divided into three groups, based on how they scored the business or product.
Promoters
These customers gave the business a score of 9 or 10. They are the company’s most loyal and enthusiastic customers, meaning they are likely to act as brand ambassadors.
Passives
These customers gave the business a score of 7 or 8, meaning they are unlikely to actively recommend a business, but they also aren’t likely to talk about it negatively.
Detractors
These customers answered with a score between 0 and 6. They are unlikely to recommend the product or service, probably won’t be returning customers, and may discourage other potential customers.
Once you have broken the customers down into these categories, NPS is calculated using the following formula:
NPS = % promoters – % detractors
How MMC Research & Marketing makes it special
NPS is a great metric to give you a baseline understanding of how your business is perceived, but knowing that a large percentage of your customers would not be happy to recommend your business only flags a potential problem rather than providing you with an understanding of what is driving it – and more importantly, what you need to change in order to see improvements in your NPS.
For example, for some clients we may measure perceptions around various departments within the business. Whilst for others, we’ll examine perceptions of specific products or services. We can then link this back to NPS scores and identify factors influencing and shaping these perceptions.
In some cases, we might even recommend a deeper dive by running some qualitative research too. This way we can provide nuanced reasoning as to why customers gave a certain score. This deeper level of insight helps us to strengthen the recommendations we make as a conclusion to our reports.
We can also go one step further, because comms and marketing strategies are a specialty here at MMC Research & Marketing, so we can also provide actionable recommendations for improvement tailored to focus on ‘quick wins’ through to the longer-term action points.
What are the benefits of using a net promoter score?
Measure the likelihood of repeat business
By measuring loyalty, NPS allows businesses to identify the likelihood of new and repeat business. This data can then be used as a basis for forecasting business growth, cash flow, and brand health.
View the bigger picture
Unlike other customer satisfaction surveys, NPS surveys don’t just focus on one interaction. Instead, they reveal the bigger picture – how your customers feel about your business as a whole, rather than a particular purchase.
Benchmark your business against competitors
NPS is a standard benchmark that is used by companies around the world. This makes it easier for you to track your progress against your competitors and others within your sector.
User-friendly
For customers, NPS surveys are quick and simple to complete, usually taking no more than a couple of minutes. this makes it more likely that they will take part.
How can net promoter scores inform your decisions?
The net promoter score can be used to inform a number of areas within a business, including:
- Customer service
- Marketing and communications
- Product development
- Business development
- Customer retention
How often should you run a net promoter score?
At MMC Research & Marketing, sometimes we run net promoter scores as a stand-alone market research project and sometimes we weave in net promoter score questions within other customer surveys, if appropriate.
When it comes to how often you should measure NPS, there is no one-size-fits-all rule. It depends on factors including:
- The sector
- The amount of repeat customers the business has
- The extent to which the business can influence customer satisfaction
- Whether it makes sense to run NPS at certain points in the year based around campaigns or seasonality
If, for example, you’re a fast-paced business with customers who could source the product/service in question from a wide variety of providers, ongoing NPS measurement is usually recommended.
Clients that we work with would typically run an annual survey and, more often than not, they’ll tie it in with some in-depth qualitative telephone interviews to understand their customers’ thoughts at a deeper level.
No matter the research project, we design a bespoke solution for each of our clients, so we’d recommend meeting with you first to get an understanding of what is important to your business.
iamproperty is a long-standing MMC Research & Marketing client and we conduct an annual tracking study to understand customer perceptions which includes an NPS baseline measure. Since 2021, they have been able to monitor improvements in NPS and identify if the changes they are making as a result of customer feedback are having the desired effect on improving perceptions.
If you’re considering exploring a net promoter score for your business, please email vicki@mmc.agency
