Every company searches for optimal strategies and tools in order to expand. Businesses are seeking for new approaches which will take them a step forward. The companies are using the Net Promoter Score for assessing the loyalty of their customers. By doing this, the companies will know how to react and what should they improve in their workings.

 

Net Promoter Score is often used by larger companies, but it has also been adopted by many smaller businesses regardless of the industry segment. Smaller firms are using NPS due to its simplicity and the low costs. The companies are using the power of Net Promoter systems as it can largely improve their employee engagement, as well as the customer experience. Companies that have a higher NPS will always be more profitable companies than those that show lower scores. Net Promoter Score is a process which uses the feedback of the customers as a way to engage everyone involved in the process, in order for higher levels of loyalty and profitable growth of the business to be achieved.

 

The idea behind NPS is quite simple. The mathematical formula summarizes the scores.  Responses on the question about what is the likelihood to recommend something are measured on a metric scale from zero to ten. Zero means it is the least likely to recommend something and ten is the most likely to recommend. After responses are collected they are grouped in three different groups. Customers that have responses between zero and six are grouped into the category of Detractors, those with responses of seven and eight are Passive or Neutral, while those customers that have responses of nine and ten are Promoters. The Net Promoter Score results from taking the percentage of the customers that are labeled as Promoters and subtracting the percentage of the customers that are Detractors. Some people believe that the Net Promoter Score is the only metric that the company needs in order to predict their business growth.

 

The theory behind this concept is that the Promoters are the most loyal and satisfied customers that will keep using services and buying products from a company. They are also the group that is most likely to suggest and recommend to their family and friends to do the same. Neutral group is generally satisfied from the products, but they do not have big motivation to recommend the product or give a negative or positive referral. The last group of Detractors are customers that are not satisfied and that will not recommend anything. They are group of people that will most likely seek other alternatives and they are also very likely to share their negative experience with others.

 

NPS is very simple to use and it is not hard to understand. That is why the companies are using it for measuring the satisfaction of their customers. Common sense will tell you that if there is a high percentage of satisfied customers that will recommend the product, then the focus of your company should be on that product.