Demystifying the Net Promoter Score (NPS)

As companies' interactions with their customers become increasingly, but not exclusively, digital, leaders need to pay attention to the total customer experience. While there are many metrics within each customer and digital channels, the Net Promoter Score (NPS) is widely used to evaluate the overall 'health' of your customer base - in particular during and after digital transformation initiatives or changes in the overall value proposition.

It is a simple question that is easy to ask and easily benchmarked:

"How likely are you to recommend <company/brand> to a friend or colleague?"

Recently, I was a guest on Klipfolio's Metric Stack podcast and joined hosts Allan Wille and Lauren Thibodeau to dig in to the very popular Net Promoter Score metric.

We talked about what it is, when to use it, and why it matters. You can listen to the full episode here.

NPS is one of the metrics you can use to keep your finger on the pulse of your customer and member experience and together with other metrics, get sense for how committed or passionate they are towards your company or brand.

Your NPS can help you assess:

• Who are your promoters? Those who are responding most favorably to your recent initiatives or activities
• Who are your detractors?
• What should you be amplifying as you promote your company and brand?
• Where are the areas that where you can drive improvement?

Using surveys to gather NPS gives you an early indicator of future churn or growth, allowing the business to adapt and prepare.

Even in industries where recommendations are less likely to actually happen, a high NPS indicates 'stickiness' of your customer base.

As part of Differly’s customer/member growth experience, we use NPS to track:

--> Where it fits within your customer satisfaction toolbox as a whole

--> Why the "total" score matters, but not as much as the upward or downward trend over time

--> Why the timing of the question within the customer lifecycle is so important.

Especially in B2C companies, NPS can drive viral growth, particularly if you incent active recommendations. One example of a company who uses NPS wisely is Peloton. They have a great experience for customers, plus a sense of community among those customers. This drove exceptionally high scores, which is evident in their sales.

If you're using Net Promoter Score as part of measuring the success of your digital transformation, make sure you're doing it right and optimizing how it drives the outcomes for your business. Three key points to remember:

1. Ask it properly - especially if you want to compare it to benchmarks.
2. Know why you are asking it - this could influence who you ask and when you ask them.
3. Take action - use the results to improve your business and deliver a better customer experience

Reach out to me or anyone on the team connect@differly.com to discuss how to use this metric and others to help drive customer/member performance measurement and growth!

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