What Is a Net Promoter Score? (And Why It’s Critical for Service-based Businesses)

Net Promoter Score (NPS): What Is It and Why Does It Matter?

Would “How likely is it that you would recommend our company to a friend or colleague?” be the one question you’d ask your clients?

The Net Promoter Score was created by Bain & Company in 2003 to help businesses figure out how loyal their customers are. It does this by using a single-question survey that can be sent by phone, email, or the web and has a 10-point rating scale and a short answer section.

Different Types of Customers in Net Promoter Score

Which type of customer they are—promoters, passives, or detractors—is based on how likely they are to tell others about your services.

• Promoters are loyal customers who stay with your business longer and spend more money. There are a lot fewer people leaving this group than leaving “passives” or “detractors.”
• This type of customer is more likely to be lured away by competitors because their referral rate is up to 50% lower than that of your promoters.
• Detractors are responsible for 80% of bad word-of-mouth and have the highest turnover rate. NetPromoterSystem.com is the source.

To get your final Net Promoter Score, take the percentage of detractors and subtract it from the percentage of promoters. Half of the points is a pretty good score for most businesses.

Also Read: Service Metrics – What’s your number?

Why is Net Promoter Score so important for businesses that provide a service?

1. Quickly measure and rate customer loyalty

If you ask one question, you can directly connect business results to higher levels of customer loyalty.

2. Keep an eye on responses to make people happier

By keeping track of your Net Promoter Score from one service call to the next, you can easily see whether changes have made things better or worse for your customers.

3. Find customer advocates 

Use your loyal customers to easily get new business leads and word-of-mouth referrals.

4. Get customer feedback that you can use

You can use the extra feedback that customers leave to deal with any problems before they happen. This way, you can solve the problem in a good way and keep it from happening to other customers.

5. Boost sales by lowering the rate of employee turnover

Once you know which customers are your promoters, you can spend money to improve the customer experience and turn passive and negative customers into promoters. This will lower the number of customers who leave.

6. Raise the lifetime value of a customer

For example, Bain & Company research shows that your promoters usually have bigger average order sizes and cost less to sell, market, and advertise.

Also Read: Top 5 Benefits of using Certificate Management Software

Learn how to use the Net Promoter Score to get along better with your customers

If a service call gets worse, it could hurt the relationships with customers you’ve worked hard to keep. How your company handles these less-than-ideal situations is just as important as how it handles the best-case scenarios.

You can use the Net Promoter Score to come up with a way to make your customers’ experiences better, which will help you turn negative customers into positive ones and keep positive customers sending you new customers.

How Miracle Service Event Manager Can Help You Keep Track of NPS

Are you aware that the Miracle Service Event Manager module can also be used to keep an eye on the Net Promoter Score of your business?

When a service call is over, a “closed job” notification is sent directly to the email inbox of your customer. Customers can fill out an online survey (like Survey Monkey) by clicking on the link in this custom text or HTML email notification. You can use this to answer a Net Promoter Score survey and keep track of how happy your customers are.

More sales will happen again and again if the customer is happy. Get in touch with us to find out more about our Event Manager module and how it can help you make your customers happier.