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What is NPS and why should I care?


Liam Bates - 22/01/2019

 

Measuring your performance is tricky. Many companies worldwide consistently find it hard to measure people’s perceptions of them, but also find a scale on which people can rate them accurately. Great examples of where this has failed, includes companies like Blockbuster, who truly believed people enjoyed the experience of coming to their stores. Imagine what could have been for them if they’d sent out an accurate performance measurement.

 

What bad NPS looks like

 

NPS has widely become one of the most used measuring tools for a businesses performance. Its provides an accurate measurement of customer experience, while also helping predict future business growth. While the scale isn’t the easiest to understand, when it’s all said and done, it provides a universally recognised score than gives a strong indication of a companies true performance, in the eyes of its customers.

 

The scale and Formula, look like this:

 

Net Promoter Score Scale

 

 Source: (Netpromoter.com/know)

People are asked to judge a company on how likely they’d be to recommend you to a friend or colleague. An odd question, but a really impactful one, when it’s broken down.

 

If you are willing to recommend a company, you’re taking on a lot of responsibility personally, for how that company performs. Therefore, it’s rare that we do recommend companies, and many times we do it comes with a warning or ‘fine print’.

 

People are nervous to recommend you

 

The NPS scale reflects this, with a unique scoring system that reads:

 

Promoters: 9-10 (Considered loyal enthusiasts and fans)

Passives: 7-8 (Satisfied but unenthusiastic, could be tempted elsewhere)

Detractors: 0-6 (unhappy with performance, could damage reputation with their opinions)

 

Once you have your results, the calculation will provide a number which can be used to reflect the businesses performance. While 0 is considered to be dead in the middle, companies should strive for 70+, which is considered ‘world class’.

 

The reason NPS is being so widely adopted, is that it not only provides assessment of current performance, but it gives companies foresight into the future. Also the ability to turn a positive review into a potential promoter is an added bonus, many companies set up Email Automation to promoters, asking them to refer them onto a friend or other company (you can read about setting up automation here)

 

We recently have been using NPS ourselves and its done wonders for our service. Its actually included as a Hubspot App in the Customer Experience Module! While I won’t go into those details now, my colleague Luke is going to write a post on this, talking about our results and what that means for how we work (i’ll link it here when it’s live!)

 

That’s all from me today! If you’ve got any questions, email me on liam@inbound.org.nz. I’d love to chat about it or just give some advice on how to get your NPS rolling!

 

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