The Secret Power of the NPS Score

Net Promoter Score (NPS) is a valuable tool used to measure customer satisfaction and loyalty towards a business. This score is calculated by asking customers to rate their likelihood of recommending your product or service on a scale of 0 to 10. Based on this feedback, businesses can identify their promoters, detractors, and passives. Promoters are customers who rate your product or service with a score of 9 or 10. They are loyal customers who are most likely to promote your brand to others. Detractors are customers who rate your product or service with a score of 0 to 6. They are unhappy customers who are unlikely to recommend your brand to others. Passives are customers who rate your product or service with a score of 7 or 8. They are neutral and may recommend your brand if they have a better experience.

Businesses can use NPS to analyze customer feedback on various touchpoints such as customer service, product quality, website experience, and more. By collecting feedback from customers at different touchpoints and calculating the NPS, businesses can identify areas that need improvement and take corrective actions to enhance customer experience.

As an example, let's consider Business X. This company has its app, content, and business functions by which customers engage. They collect feedback from customers on their content, app, etc., and ask them to rate their experience. If customers give a 0 rating to their customer service, it means they are not happy with the service. Business X can take steps to improve their customer service and increase their NPS score from 0 to 10.

Another example is Jabong.com, an online fashion retailer. They wanted to increase their NPS score, which is critical for any business. A low NPS score indicates that customers are not loyal and may not recommend your brand to others. By improving their customer service and addressing customer complaints quickly, Jabong.com was able to increase their NPS score and impress their investors.

NPS is a powerful metric that can help businesses measure customer satisfaction and loyalty. By collecting feedback from customers at different touchpoints and taking corrective actions, businesses can improve their customer experience and increase their NPS score, leading to increased customer loyalty, sales, and growth.

To increase Jabong's NPS score, it is important to have a thorough understanding of the company's system. This includes knowing how warehousing is done, how clothes are received, where vendors are located, and how warehouse packaging is done and sent out. It is also crucial to understand what complaints customers have and where the company may be making mistakes.

After analyzing the situation, it was discovered that active online users were the company's primary customers. When these customers had complaints, they turned to social media platforms like Twitter and expected a prompt response from Jabong. Unfortunately, no one was responding actively to these complaints.

To address this issue, Jabong formed a front-end team of four people who were dedicated to working 24/7 on Twitter, Facebook, and other social media platforms. This team made it their responsibility to respond to all customer tweets with quick and effective solutions, while also being given decision-making authority. As a result, the company's NPS score began to rise.

To further improve the NPS score, the team shared a link with customers asking them to rate their experience. Due to the company's quick responses and effective solutions, the NPS score was significantly improved. Overall, Jabong's increased NPS score can be attributed to their commitment to addressing customer complaints promptly and effectively.

Types of Customers as per NPS

Understanding the different types of customers is crucial for any business to thrive. As per NPS (Net Promoter Score), customers can be categorized into three types: Passive, Detracted, and Promoter.

Passive customers are those who have mixed feelings about your product or service. They are unsure about whether they like you or not, and their opinions keep fluctuating. These customers are often indecisive and not loyal to your brand.

Detracted customers are those who are very unhappy with your product or service. They have had a negative experience with your brand and are unlikely to recommend it to anyone. These customers may even discourage others from using your product or service.

Promoter customers, on the other hand, are the ones who are extremely satisfied with your brand. They love your product or service and are likely to recommend it to others. Promoters are your most loyal customers, and they can help you grow your business by spreading the word about your brand.

To measure customer satisfaction accurately, businesses should gather NPS scores from all their customers. NPS scores should be collected at all customer-facing touchpoints, including your website, app, social media, customer care, and other communication channels. The service department should collate all these scores and use them to improve customer service and products.

The importance of NPS scores can be seen in the example of Jabong, which raised $10 million funds after their NPS score increased. Investors often see customer loyalty as a crucial factor in a brand's success, and NPS scores can be a great indicator of customer satisfaction and loyalty.

How to Calculate NPS Score?

If you are wondering how to calculate Net Promoter Score (NPS) for your business, then here's what you need to know. The NPS Score is calculated by subtracting the percentage of detractors from the percentage of promoters. For instance, if 100 customers gave you feedback, and 50% of them were your promoters and 30% were detractors, your NPS Score would be 50 – 30 = 20%.

To give you an idea of what a good NPS Score is, most good companies have an NPS score of above 60-65%, while world-class companies have an NPS Score of above 80%. Therefore, it is essential to aim for a higher NPS Score to improve your business's customer satisfaction and retention rates.

To achieve this, it is recommended that you incentivize your promoters, who are your most loyal customers, by providing them with extra care, exclusive services, and offers. This will help them feel valued and connected with your business, which will encourage them to continue being your promoters.

On the other hand, it is crucial to reach out to your detractors and apologize for any mistakes that may have led to their negative experience. By listening patiently to their problems and understanding their concerns, you can work towards closing the gaps and improving your business's overall performance.

It is also important to pay attention to your passive customers, who make up the biggest customer base of any company. Business owners often make the mistake of ignoring passive customers, but they have the highest potential to become promoters if paid attention to properly. However, if they are not given the attention they need, they can become detractors or switch to other brands that offer better discounts.

To prevent this, it is recommended that you provide exclusive offers and discounts to your passive customers and focus on converting them into promoters. Every department of your business should work towards this goal as revenue growth can accelerate when passive customers become promoters. Additionally, the Cost of Customer Acquisition (COCA) will always be less due to passive customers because they tend to bring in more customers through word-of-mouth recommendations.

How to Implement NPS?

If you are a small business owner and want to improve your customer feedback process, then implementing the Net Promoter Score (NPS) can be a great way to do so. There are a few ways you can go about implementing NPS. 

One way is by using Google Sheets, which has a tool called Google Forms that allows you to create customized forms for customer feedback. When customers fill out the form, their details will automatically be captured in an excel sheet. To ensure that the feedback is useful, it is recommended to keep the form simple with a minimum of one question and a maximum of three questions. You can ask customers to rate their experience on a scale of 0 to 10, where 0 is the least and 10 is the best. Based on the score, customers can be categorized as passive, detractor, or promoter customers. It's important to follow up with detractors and work on converting them to passive customers and then to promoters.

Another option is to use automated tools that are readily available online. These tools are designed to make the NPS process easier and more efficient. You can find many tools on Google that are easy to use and allow you to send feedback requests via WhatsApp. This not only makes it more convenient for your customers but also allows you to capture their feedback in one place. 

To get the most out of NPS, it is recommended that you ask your customers for feedback every month. This will help you track your progress and make improvements where necessary. The head of customer experience, who could be your Chief Product Officer (CPO), should take responsibility for ensuring that the NPS score keeps increasing. By doing so, you will create a great experience for your customers, investors will be more inclined to invest in your company, and your business will grow at a faster pace.

It's important to note that the NPS score is a critical factor when it comes to raising funds or going public. Investors consider the NPS score when deciding whether or not to invest in a company. A high NPS score reflects a high level of customer satisfaction and loyalty, which is a great indicator of the company's potential for growth and success.

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