If you want to learn who your loyal customers are, then consider Net Promoter Score (NPS). Since 2003, NPS gave businesses a way to measure customer loyalty and compare themselves to the competition.
All in the name of giving your customers a voice.
A Net Promoter Score is a simple survey that asks, “How likely are you to recommend our product/service to a friend?” on a scale of 0-10.
Based on the answer, you know right away whether the person is a Detractor, a Passive, or a Promoter of your brand. That’s a fancy way of saying who could be hurting your business (through negative word of mouth) and who’s promoting it (by actively recommending your product or service).
Let me illustrate.
The follow-up question is crucial. It asks people to give a reason for their score. Think of this as the qualitative part of your survey. It’s less measurable, but you get key insights into why people are staying or leaving your business.
This second question is what gives NPS its one-two punch, and what allows you to close the feedback loop. I know it seems obvious, but that’s how you can actually do something with the feedback you get.
Without this follow-up, you’re left with nothing but a score. What are you going to do with that? Tell your friends? Brag about it on social media? Pointless.
The goal is to discover patterns from Promoters and Detractors inside the data. For Promoters, just do more of what works. For Detractors, do less of what’s causing people to leave you high and dry. The ultimate goal is to address problems in your system, because it’s systems that are creating repeatable results. One-time fixes won’t get you far.
You’ll notice I didn’t mention Passives. “Ignore” them. The thinking is, you’ll address them anyway if you do more of what works and less of what doesn’t.
To recap. NPS is two questions. One quantitative, one qualitative. The first gives you a score, the second gives you critical feedback to improve to stay the course. From there, find patterns during your analysis. Then, fix the systems that cause Detractors, and enhance those that create Promoters.
Based on how customers rate you on the first question, they’re placed in one of three categories: Detractors, Passives, and Promoters.
Score 9-10: Promoters – loyal, enthusiastic brand champions
Score 7-8: Passives – satisfied people who may (or may not) be loyal
Score 0-6: Detractors – the opposite of Promoters
Here’s the magic formula:
(% of Promoters) – (% of Detractors) = Net Promoter Score.
Note that the final score never uses percentages, only whole numbers.
Here’s an example.
Amount of responses: 100
Detractors (score 0-6): 15
Passives (score 7-8): 20
Promoters (score 9-10): 60
60 (% of Promoters) – 15 (% of Detractors) = 45 (Net Promoter Score)
This number becomes your baseline. Sometimes there’s an industry NPS score to compare to, but what’s more important is your score — and improving it over time.
Net Promoter Score isn’t a democracy.
Take a closer look at the calculation and see for yourself: %Promoters – %Detractors = NPS. Again, ignore the Passives. Keep giving them reasons to like you, but your attention should be focused on Detractors and Promoters.
Why? Because retention is cheaper than acquisition.
When it comes to DPetractors, put on your empathy hat and focus on what could make their experience enjoyable, or how you could improve as a service provider.
With Promoters you want to learn from successes. Of course, tailoring the second question to the first one’s answer means you need a survey that lets you do that.
Want to take it a step further? You could ask Promoters what they think their friends would really appreciate about your product or service. They’ll give their own opinion anyway — but tend to put in more effort when considering their friends’ feelings.
“Love thy neighbor”, one distinguished NPS advocate said.
You could add a couple of questions outside the main two. Maybe squeeze in some demographics before you say goodbye, if that feels right. Be careful not to overdo it. Survey fatigue is real.
If so, use quick and visual question types like multiple choice questions or dropdowns. That way people don’t have to write their own answers, and you’ll leave an even better impression. Another option is to add a little comment box at the end, so those who opt in can write freely.
Finally, remember that every second they give you their attention is a gift. So whatever you include, just make sure it’s doable in a matter of seconds, or you’ll drop more people than Dirty Harry.
Skeptics of NPS usually point out these things:
1. Different results can get the same score
2. The Detractor category is too wide
3. NPS doesn’t really take behavior into account
Different results can get the same score. It doesn’t matter if you have 80% Promoters and 40% Detractors, or 40% Promoters and 0% Detractors. Both get an NPS of 40 because 80 – 40 = 40, and 40 – 0 = 40. This also means that a company with Detractors who are all sixes gets the same score as an identical company with Detractors who are all zeros.
The Detractor category is too wide. It’s an understandable concern, since sixes and zeroes seem so distant. After all, sixes rub shoulders with the Passives.
Let’s put it this way — it’s much easier to upset people than it is to please them. And upset people tend to be more vocal. That’s why Detractors make up more than three times the size of Promoters.
The third popular criticism is that NPS doesn’t really take behavior into account. People could simply claim to recommend the brand, but not really do it. Also, many will tank the score but then not mention the brand again. This makes sense, since you can’t explain loyalty or behavior with a percentage.
Or can you?
Here’s the hidden beauty of NPS. It answers more questions than it asks. Maybe a lot of self-reported Promoters never actually promote the brand — but they’re the kind of people who are likely to become frequent buyers, who follow the brand on social media, and who don’t hassle with customer support. This is what makes customers customers.
Starting to see why NPS and business growth go together like PB&J?
Retention is cheaper than acquisition. Think of it as a mantra.
The good people at Airbnb know this truth. They wanted a better understanding of who’s likely to use their service again.
So who books another stay?
Airbnb put the NPS questions into the normal review process after a booked stay. They hoped they could learn more than other feedback channels offered.
Over half a million people completed the NPS survey. About two-thirds were Promoters (score of 9-10) and only 2% were Detractors (score of 0-6). However, there are lots of things to consider when trying to predict behavior, like what’s outside of Airbnb’s control. Can’t blame a company for rain and thunder.
Accounting for things like price, length of stay, what season it is, and more, their NPS pretty much repeated what their other reviews and channels said. Bummer.
But that’s not the end of the story.
As it turns out, 26% of those who rated their recent stay 1 out of 5 stars still became Promoters on the NPS survey.
For Airbnb, NPS didn’t add much predictive power. But it gave them a better understanding of real people’s experiences surrounding their service.
People want what they want, when they want it. If you can’t deliver, they’ll just go to someone who can. In other words, if you’re not asking for feedback, you’re asking for trouble. Start by speaking a language they understand — their own.
Here’s how you could start a cycle of improvement:
1. Discover your baseline Net Promoter Score
2. Find patterns
3. If necessary, get more data
4. Make an action plan based on the feedback — and act on it
5. Rinse and repeat