The Net Promoter Score (NPS) measures the extent to which your customers would recommend your business to their environment. Nowadays the NPS is the standard for measuring and improving customer loyalty. Starred have this integrated into the tool so you can calculate your company's score. If you're not familiar with the NPS, no problem. Below is a brief explanation of the NPS method.
Fred Reichheld developed the NPS methodology, which is based on asking one single question to customers as a predictor for further purchases and recommendations. The question is: "How likely, on a scale of 0 to 10, will recommend us to a friend or colleague?"
The Net Promoter Score is based on the theorie that every business can divide their customers into three categories:
- Promoters (9 & 10)
- Passives (7 & 8)
- Detractors (0/6)
As a business you would prefer promotors because these customers are very excited about your product or service. Due their excitement they will recommend your product or service to friends, family and others in their environment. Passives are satisfied but they will not wrecommend your company to their surroundings.Detractors are not very satisfied and tend to be more negative while giving responses compared to the other two groups, this group will not make recommendations.
How is the NPS calculated? The Net Promoter Score is calculated as the difference between the percentage of Promoters and Detractors (see illustration above). The NPS itself is not expressed as a percentage, but as an absolute number, which is situated somewhere between -100 and +100. You can find the NPS on your Dashboard.
We've collected the best practices for working with NPS in the following blog.
Here you can find some great benefits of the NPS:
- Several studies show that an increase of the NPS with (on average) 12 points, leads to an increase of the sales.
- Enthusiastic customers pay their bills significantly better.
- The promoters are nice customers with less complaints. They give compliments, making it fun for employees to work with them. This leads to higher motivation among employees.
- They provide feedback on how you can improve and grow your business