How much do you care what your customers think about you? Customers are your lifeblood, so increasing customer loyalty is critical to your business. One of the best ways to predict customer behavior and gauge their loyalty is with the Net Promoter Score. Read on to learn about what it is and why you need to be paying attention to it.

What is NPS and why is it so important?

In a nutshell, Net Promoter Score, or NPS, measures the loyalty of customers to a business or brand.

NPS is a popular customer satisfaction metric that is the easiest way to measure how well a company treats its customers, and the likelihood of that company receiving a recommendation from a customer’s personal and/or professional social circle.

Online sellers can use this metric and associated customer interactions to improve customer service, encourage loyalty, and grow.

What NPS tells you about your business?

NPS is important because it helps you discover the strength of your brand and predict your growth rate.

NPS has been widely adopted by marketers as a measure of customer mindset and predictor of profitable sales growth as well as a metric for tracking overall brand health.

NPS measures four performance indicators:

  • Likelihood of new and repeat business
  • Customers’ relationship with your business and feelings toward your brand
  • What needs to be improved or reinforced
  • Identifies trends and tracks business performance over time

How to calculate NPS

To understand how happy your customers are with your company and brand, you need to ask them, and the best way is to use a survey.

But there’s a catch: Make the survey short and sweet so you obtain valuable information but don’t irritate the person completing it.

Often the best way to collect the data needed to calculate your NPS is by having your customers answer a simple, one-question survey:

“How likely are you to recommend [your company] to a family member, friend, or colleague?”

Responses to the above question are placed on a scale of 0 to 10. It divides the respondents into 3 categories: Promoters (9-10), Passives (7-8), and Detractors (0-6).

NPS is then expressed as a single Key Performance Indicator. NPS is calculated by subtracting the percentage of detractors from the percentage of promoters and the score is presented as an integer from -100 to 100.

How to generate higher NPS

Measuring NPS alone is not enough to grow your business. You need to act upon your NPS and, perhaps more importantly, the insights gathered in the process, to help remove the guesswork from your business decisions. But how do you do that?

Here are four methods for improving your NPS:

  1. Turn detractors into promoters

With word-of-mouth marketing more prevalent in the age of social media, both positive and negative experiences are spread across the web constantly. Listen to your detractors’ feedback and solve their problems quickly.

  1. Respond to issues immediately

Slow response times turn off customers. Most consumers say they expect a response within 24 hours of a complaint. In a survey, it was found that one company made their customers wait an average of a whopping 88 hours for a response.

Think outside the box on ways to speed up your response times, and to make your responses more valuable to your detractors, like GIF or HD support videos that can help reduce miscommunication.

  1. Visual communication

Customers are tired of companies using long text passages in an attempt to solve issues. That can lead to miscommunication, lost time, and frustration.

Some options that are better than a long chain of emails are live customer service chat windows, capturing annotated screenshots in addition to text responses, and as suggested above, recording a quick video answering the customer’s question or responding to their issue.

  1. Aim for above and beyond

Passive customers are satisfied with your products and services but are not likely to share their experiences. Why? Because you only met, not exceeded their expectations.

If you were able to respond to all customer emails within 24 hours, and better yet, answered them with a video response, how would your detractors react? Likely this would cause pleasant surprise, build excitement, and generate positive work-of-mount sharing of their experience. And turn that detractor into a promoter.