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Improve Net Promoter Score with human insights

| October 26, 2018
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If an organization is customer-centered then it’s likely that Net Promoter Score (NPS) has teams celebrating when they’re good, and facing criticism when they’re not. While NPS is an important tool in the customer experience (CX) toolbox, it’s just one piece of the puzzle.

To gain a holistic view of customers it’s important to pair quantitative data, like NPS, with qualitative insights—human insights—like user and customer research.

Before we dig into how to use human insights to improve your NPS, let’s review some basics about NPS.

Contents

What is NPS?

Net Promoter Score, or NPS, is a common customer experience (CX) metric companies use to gauge customer loyalty. The metric came about after decades of focus and research by consulting, marketing, and management firms, all determined to uncover the formula to customer loyalty.

After years of research, a few books and a lot of customer interaction, Fred Reichheld, Bain & Company, and Satmetrix zeroed in on the “One Number You Need to Grow” and published their findings in the Harvard Business Review, and the NPS was born.

The calculation aims to measure customer sentiment—and thus, loyalty—by asking just one simple question.

The NPS survey question

After years of research and experimentation, Reichheld and team landed on this essential question to gauge customer loyalty, and by extension, CX, which has since become the industry standard Net Promoter Score question:

How likely is it that you would recommend our company/product/service to a friend or colleague?

The team tracked the purchase histories of more than 4,000 consumers and compared it with instances in which consumers then referred the company they purchased from to someone else.

Reichheld was initially surprised that this NPS question turned out to be the most accurate indicator of customer loyalty. He had initially assumed that a question related to how much consumers felt a brand deserved their loyalty would be the most accurate indicator. However, the team soon realized that the concept of loyalty wasn’t nearly as telling as the act of loyalty—recommending a company to someone else.

How to calculate NPS

The Net Promoter Score formula is straightforward. After being presented with the above question, respondents choose a score, typically between 0 and 10, with 0 meaning they’re not at all likely to recommend the company/product/service and 10 meaning they’re extremely likely to recommend the company/product/service.

Once all the responses are gathered, they’re grouped into three categories:

  • NPS Detractor: Scores 0-6
  • NPS Passive: Scores 7-8
  • NPS Promoter: Scores 9-10

Then, the percentage of Detractors is subtracted from the percentage of Promoters to find the NPS. (Passive scores are excluded from the calculation as they aren’t considered to either help or harm.)

nps score chart

Source: netpromoter.com

 

What is a good NPS?

NPS can range from -100 (all scores 0) to 100 (all scores 10). A score of -100 is terrible and means that company has a lot of work to do to improve its CX. Yet on the flip side, a good score doesn’t need to be 100. In fact, no company has ever achieved a score of 100, although some have come close—Tesla, Inc., for example, has scored in the 90s for the past several years.

Generally, most companies consider any score of 0 or higher positive. What constitutes a “good” score also depends on the industry. Internet service providers (ISP) might have an average score of around 0, for example, while retail stores may be closer to 50, so a score of 10 for an ISP would be considered great, but would be terrible for a retailer.

How to use NPS to gauge CX improvements

Understanding what NPS is and how it’s calculated is important, as it can help teams leverage that information to improve their CX.

Like most quantitative metrics, NPS is only a part of the CX picture and must be paired with qualitative insights like customer research to be an effective tool. Many companies use their NPS to identify areas that need improvements then conduct usability or customer research to get a better understanding of why they scored the way they did.

Once there’s an understanding of where customers are coming from, it’s much easier to improve their experience.

Take Capital Public Radio, for example. The company knew that it wanted to make improvements to its web audio player—the number one feature visitors to their site engage with. Before conducting any customer research or making any changes, the NPS for the web player was 19, far below the company’s overall average.

Before launching a new web player, the team utilized the UserTesting platform to conduct recorded tests with users to gauge the ease of use of the player and to uncover any unexpected pain points or areas for improvement before launching.

Once the tests were completed, the entire team spent a full day watching the videos and making a note of additional updates and important user feedback. After several iterations, the team released a new web player that resonated with customers.

As a result, they saw a 21-point improvement in NPS for the web player, and an impressive increase in promoters, the most loyal segment, to nearly 60%.

improve net promoter score - capital public radio

Source: Capital Public Radio

There’s room for improvement with any NPS

One company, Promontech, a leading mortgage service provider, dramatically improved their NPS by incorporating human insights into their development process for a mobile app.

Before applying human insights as a CX strategy, the app’s NPS was -43—there was a lot of room for improvement. After conducting usability studies, the team improved the app and increased their NPS to 67—a more than 250% increase in customer loyalty!

No matter what your NPS may be, there’s always room to improve your CX—and your NPS—by continuously gathering human insights about your product or experience.

Want to learn more?

If you’d like to learn more about how UserTesting can help you understand your customers—and improve your NPS—through on-demand human insights, contact us here.