How’s a Net Promoter Score a Bliss for Small Business Growth
- Posted on February 11, 2022 by Robert
- Reading time about 6 minutes
Customer Experience is by far the most imperative parameter to predict business success and when we’re talking about a small business that either has just started or striving hard to survive in the tough competition. Heard about key performance indicators? They are the critical indicators of progress toward an intended result. So, KPIs can provide a direct indicator of performance but is it the right choice for all small businesses too?
To facilitate small businesses, there’s another metric known as net promoter score (NPS) which is even more important than profit or revenue, so what does NPS mean, and how’s it an imperative aspect for measuring NPS for your business? Let’s decode how a net promoter system can prove bliss for your small business.
What does a Net Promoter Score mean?
A net promoter score system is one of the leading customer experience tools available in the current times. Being used for measuring customer satisfaction and loyalty by making use of a single, simple score varying between -100 to +100. It is basically a customer satisfaction benchmark for measuring how likely your customers would be recommending your business to a friend. It enables a business to get an accurate assessment of how customers would feel about their experience with your business/ services/ products offered.
Measuring & Calculating NPS
So NPS collectively works on surveys and a collection of surveys portrays the results on how satisfied your customers are. Thus, it entirely depends on feedback. Here, gathering NPS data is super simple and convenient. Though most of the brands have been choosing to do this manually but more important is to have a scalable system to manage and predict business growth through a smart automated system for collecting NPS data.
Now, when we’re talking about measurement and NPS score calculation it’s important to know which ways are used to send in the customer survey and how exactly are they visible as a constructive result? So, these surveys involve asking customers to rate their likelihood of recommending a particular brand based on a scale of 0 to 10. These are sent in various forms including mails, SMS, web-based and shared links to the customers. The calculation process is as follows-
There’s a formula applied to the entire data collected, get the collective percentage of each group then subtract the percentage of detractors from the percentage of promoters. Remove the percentage sign and that’s the number of your net promoter score. Let’s clarify this better with an easy example-
Taking into consideration a set of 10 customers who have been sent NPS surveys, the feedback shows 3 detractors, 2 neutrals, and 5 promoters. So, let’s calculate the percentages in the first place. Ignore the neutrals and subtract the percentage of detractors from the percentage of promoters.
The calculation states 50 percent minus 30 percent — which equals +20 as NPS score, which is great for any small business looking out for their future in a similar field.
How’s NPS the right choice for small businesses?
Having the best NPS scores is an excellent parameter to let small business understand their customers and make sure they’re liking what’s being offered. Here are a few points to ensure that making use of NPS is a great choice for almost every small business-
- It Provides the Big Picture
Imagine how would you, as small businesses progress without the right understanding of customer sentiments, their expectations towards your brand, and pretty much everything in terms of customer satisfaction. So, NPS reveals the big picture wrapped around the small details on your products, services offered and thus makes you aware of the right things at the right time.
- At most Relevancy
NPS scores range from -100 to +100 wherein the entire scoring system is easy to understand. Though KPIs are also considered a relevant factor but NPS reflects the entire business picture all at once. A strong NPS shows that your business is doing everything just the right way, making sure that every link of the chain is working efficiently. On the other hand, a low NPS score can indicate the loopholes and denote what’s lacking behind.
- Facilitates Customer Retention
One thing is clear from the NPS data that only your promoters would like to stay with you for a long run and those are the ones whom you can target going forward. Here you can get an idea on targeting and retaining only the ones who have the ability to either convert into repeat sales or simply spread the positive word about the brand. You can send personalized offers to loyal customers and make sure they stick around for long.
- It is Simple, User-Friendly and Inexpensive
From a customer’s perspective, NPS surveys are convenient, handy, and can be done in no time and that’s the main cause why we can expect feedback rates higher. For the data calculation, NPS scores are divided into three categories- Detractors, Neutral, and Promoters and a quick calculation involving all three of them can help in determining the scores real quick.
General NPS Survey Questions
Though every brand could have their separate survey questions to be included, some of the leading questions to be included are-
- On a scale of 0-10, how likely are you to recommend our business to a friend or colleague?
- On a scale of 0-10, how likely are you to recommend (product/ service name) to a friend or colleague?
- On a scale of 0-10, how likely are you to recommend (company name) as a potential workplace to your friends?
- What is the primary reason for your score?
- How can we improve your experience?
- Which product/ service features do you value and use the most?
- What was missing or disappointing in your experience with us?
- What can we do to make you a happier customer?
Wrapping the Discussion
Once you’ve analyzed NPS data and got along with many promoters, the race doesn’t stop there! Set up a communication channel and initiate a dialogue with the happy customers to explore better ways for encouraging customer engagement. Launch a referral program that can help you connect with more customers and get on onboarded super easily. NPS plays an imperative role in knowing about your brand, knowing your customers, and making sure nothing is stopping you from achieving business growth.