Net Promoter Score (NPS): what it is and how to implement it

With each passing day, it's noticed that people's availability to answer questionnaires is decreasing. So when they come across forms that will take up a good deal of their time, they often choose not to answer. But for the company that sends them, the answers are important to improve their services. Then how can they get this feedback from customers? After all, most CEOs want their customers to be satisfied and happy.

Based on this problem, Fred Reichheld created the Net Promoter Score, also known as NPS. This method helps companies understand the level of loyalty and satisfaction of their consumers, and because of its characteristics (such as easy adaptation), it has been applied in different industries.

In a simpler way, the NPS translates into a question like:

“From 0 to 10, what are the odds of recommending BloomIdea to your friends and colleagues?”.

In addition to this question, it’s important that there's another, with an open answer, so that the customer, if he wishes, can leave his opinion, justifying his assess.

Depending on the value assigned by the customer, he may be detractor, passive or promoter.

• Detractors: the score given by these people was equal to or less than 6. The product or service has not made a difference in their lives, and they may not acquire it again. They can also damage the company's reputation through the negative WOM (Word of Mouth).
• Passives: here are those who scored the company with 7 or 8. This means that their experience was average, and they buy only the products they consider necessary, easily switching to the competition if the opportunity arises. There would probably be no negative WOM on their part, but they're not admirers enough to promote the company either.
• Promoters: with a score of 9 or 10, these customers love the company's products and/or services, are loyal, give feedback and recommend them to others.

To understand then, what's the company's Net Promoter Score, we must follow the simple formula of:

% Promoters - % Detractors = % NPS

To exemplify:

After the questionnaire, where there were a total of 350 answers, it was noticed that 70% were promoters and 13% detractors. This means that, after the formula is applied, this company's NPS is 57%.

After learning the company's NPS it's essential to assess the outcome, as well as the open responses that may have been given, as they are a basis for improvement. The Net Promoter Score can vary between -100 and 100, and being “good” or “bad” also depends on the industry in which the company is inserted. Sometimes 0 can be a good result when compared to the results of competitors. What matters most is always the customer's feedback, trying to improve the NPS over time.

After identifying the promoters, passives and detractors, we can segment and use specific strategies for each profile, to improve the relationship with customers. This way, promoters can be sent an email thanking them for the score, with ways in which they can recommend the company. With passives, a tactic can be used to help turn them into promoters, such as offers or discounts. With detractors their opinion should be taken into account to improve the company's services, thanking them for the opinion and asking what can be improved.

Due to its flexibility and adaptability, this Net Promoter Score method can be applied in several business areas, being a great way to collect feedback from customers, to continuously improve the products/ services they offer. Thus, it's intended to increase the number of satisfied and faithful customers.