Let’s first see what is NPS?
NPS is a value between -100 and +100 with any score above 0 considered to be good. It is calculated by asking a very simple question: “Will you recommend our brand to others”. The answers are collected on a scale of 0-10. Responses from 0-6 are called ‘Detractors’– people not willing to recommend your brand to others. 7-8 are called ‘Passives ‘or people who are not bothered either way or people who are just not impressed with your product. 9-10 are called ‘Promoters ‘or people whom you have really impressed and they are willing to promote your product to others.
Promoters are the desired objective of any business. Off course.
But here’s why NPS is important.
NPS actually tells you how your product is performing!
How many people actually like it? And people who are so impressed they are willing to recommend you to others.
NPS tells you about your performance. Greater the score means you are doing something right. But if conversely; you need to improve something immediately.
NPS helps you communicate with customers in real time. Communication not only helps you gather their feedback and suggestion but also provides you an opportunity to rectify your mistakes. In case your client is not happy; immediately approaching them, apologizing and introducing compensation can greatly repair your image.
Improved customer connection promotes trust and customers feel welcomed. It promotes brand loyalty and initiates positive ‘Word-of-Mouth Marketing’.
Word-of-Mouth marketing is the ultimate aim of all production and marketing campaigns. It means that your customers become your brand ambassadors and start promoting your products to others. Its cost effective, quick and wide spread. NPS scores can help you identify what and how much of targeted steps you need to take to increase the satisfaction levels of your customers. Taking proactive steps for NPS helps your marketing!
The good thing doesn’t end here. NPS is positively linked with revenue increase. Organizations with higher NPS scores like Apple, United Air etc. are all product leaders within their own domains.
It makes sense!
With more and more satisfied customers – you are eventually going to start attracting newer ones. Business will start expanding just because your existing customers are satisfied. It would also mean greater customer retention and higher rates of repeat sales.
All this manifests itself as a continuous revenue growth cycle.
There are many such reasons for why NPS matters a lot for almost any organization. The bottom line is: happy customer means more business.