What Is NPS? Your Ultimate Guide To Net Promoter Score

Any E-Commerce brand knows that customer satisfaction and loyalty are the keys to achieving long-term growth and higher CLTV. When customers can rely on your brand to consistently deliver an A+ experience, a Temkin study found that they’re 5x more likely to recommend you to their friends and family, which can not only increase your revenue but also save your brand money on sales and marketing costs. All in all, satisfied customers improve our bottom line and help to solidify our positive reputation amongst competitors. But how can we ensure that our brand is always delivering a quality experience worthy of a recommendation to Grandma Jean or Uncle Mike (c’mon, we know everyone has an Uncle Mike)?
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How to Calculate a Net Promoter Score (And What Is It Exactly)?

Net Promoter Score (or NPS) is a customer satisfaction metric that can be used to measure how likely your customers are to recommend your brand to others. In 2018, NPS became the most popular customer experience metric in two-thirds of companies because of how crucial it can be for projecting future business growth based on current loyalty and satisfaction. Though NPS is often confused with Customer Satisfaction (CSAT) scores, NPS differs in that it measures your customers’ overall feeling about your brand through one question: “How likely is it that you would recommend {insert your brand or services} to a friend or colleague.” When participants respond by providing a rating between 0 (not likely at all) and 10 (extremely likely), they’re separated into 3 categories:

• Promoters, who respond with a score of 9 or 10 and are therefore loyal, satisfied customers.
• Passives, who offer a score of 7 or 8 and are satisfied but not absolutely thrilled with their service or experience like the promoters.
• Detractors, who provide a score of 0 to 6, which typically indicates that they’re unhappy, unlikely to buy again from you, and may even steer others away from your brand as well.

Calculating a Net Promoter Score is super easy – all you have to do is subtract the percentage of Detractors from the percentage of Promoters. The final score you receive from this formula will range from -100 to 100 and provide insight into your brand’s probability of future growth and success. Pro tip: keep in mind that when your brand is ready to dive into NPS right away, you’ll first want to determine the customer service channels that you’ll be utilizing to conduct the survey. Email, SMS text messaging, direct in-app or website feedback, or phone calls can be viewed as either welcome or intrusive depending on your audience, so we strongly advise you to refer to your customer data to determine the channel your customers will most likely prefer.
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What To Consider Before Conducting Your Brand’s First NPS Survey

Before you begin running your first NPS surveys, there are a few questions you should ponder to ensure that your brand is in the best possible position to receive ratings from customers.

1. What is the status of your customer touchpoints?

Customer journey touchpoints are essentially the foundation of your customer journey map, as each represents a key point where your customers will interact with your brand. The difficult reality of customer touchpoints is that brands often have many that are spread across various channels and platforms, which can make it challenging to manage each of them. Once you’re ready to launch an NPS survey, we recommend that you take a few days to assess the efficacy of each customer touchpoint and ensure that they are meeting the needs of your customers.

2. What affects customer loyalty in your business?

Each brand handles its internal operations differently, which means how a brand earns, maintains, and affects customer loyalty through its teams’ actions varies greatly. Based on your customer data, consider taking a deeper look at what areas or processes within your brand affects the level of loyalty your customers show based on feedback from other surveys conducted during the customer journey.

3. How can you continually increase satisfaction & loyalty?

Though it may not seem like it at first glance, each member of your team and their actions affects customer satisfaction and loyalty within your brand. Work with your existing team of sales reps, customer service agents, tech support, and managers to continually assess where your processes and operations can be improved before you ask customers for their feedback for calculating a Net Promoter Score.
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Why E-Commerce Brands Should Regularly Measure NPS

NPS is a popular metric among E-Commerce brands for a reason: it’s easy to measure and understand, and it helps to rally an entire team around a clear, straightforward goal. If you’re considering whether it’s worth the effort, here are a few reasons why we recommend that you measure NPS on a regular basis.

1. Fill in the gaps on missing feedback

Unless a customer has a pressing concern or issue that warrants a call to customer support, most opinions aren’t explicitly made known unless they’re asked for. NPS is an opportunity to reach out to your customers and ask for their honest feedback on whether they’d refer your brand to a friend or family member.

2. Gauge future and long-term success

The purpose of NPS is to predict long-term growth by measuring customer loyalty and satisfaction based on the likeliness of a customer to refer your brand to others. No matter which direction the results skew, they offer insight into how your customers feel about your brand and how you can improve the experience to shift their opinions and achieve future success.

3. Improve word-of-mouth & referral marketing efforts

It’s anywhere from 5 to 25 times more expensive to acquire a new customer than it is to retain a current one, and measuring NPS allows you to consistently enhance areas of your customer experience to meet the needs and expectations of your customers in a more cost-effective manner.

Start Measuring Your Net Promoter Score To Improve Your Brand’s Customer Loyalty & Satisfaction

Customer satisfaction is the key to running a successful business that will experience long-term growth. By regularly measuring NPS, you can hear from customers who may not otherwise share their opinions about your brand and learn more about where your team can improve their processes and overall customer service efforts to elevate the customer experience. If you’ve already calculated your NPS or are ready for ways to improve customer loyalty and satisfaction within your brand, TalentPop is here to help you reach your KPIs this year. Scheduling a call with our team today to get started with a team of dedicated customer service agents.