A strong base of loyal customers is the best lifesaver for a company's long-term financial health. For that reason, we must know where we are. Do my customers recommend my product or service? The answer is in the indicator NPS (Net Promoter Score).

Your customers are everything. Without them your business would not exist and they need special care and ongoing devotion to them. Every interaction with them must be pampered, whether on the web, in the store or by phone. The instruments that form each of the points of contact with the customer must be perfectly tuned so that the final result is a wonderful symphony of sensations that Excite the customer And long live a unique experience.

They should feel that they are special and unique. Every one of them, without exception. Every company should know how to build customer loyalty. The ultimate goal is for them to repeat the purchase process and not only that: to recommend us.

What is the NPS or Net Promoter Score?

The Net Promoter Score was created in 1993 by Fred Reichheld as a way to forecast customer behavior when they make purchases and recommendations. In this way, we have a tool that works like a thermometer that measures the degree of satisfaction of our customers and most importantly: your brand loyalty.

Over the years, the NPS was being refined. Fred Reichheld published an article in Harvard Business Review in which he explained the value of NPS for the business world and how it could have a major impact on company results.

To simplify it to its purest essence, we can summarize the concept in a single question:”How likely are you to recommend the company to a family member or friend?”. This score, which It is measured from 0 to 10, is used to calculate the final NPS score that we will see later.

How is it calculated in NPS?

This is where we are going to answer the question we asked in the previous section. The score ranges from 0 to 10, with 0 being 0”I would not recommend under any circumstances” and the 10”I would recommend it with absolute probability”.

The different responses are classified into three customer ranges:

• Promoters: They are those that give a score of 9 or 10. We could also call them Lovers. They have a very high level of loyalty and are a fundamental asset for the company. Their potential lies not only in their returning to consume the brand's products, but also their ability to recommend to third parties for their consumption.
• Liabilities: These are the users who give a score between 7 and 8. Although they may seem a priori high values, these users are not so satisfied as to promote our brand to friends or family.
• Detractors: Here is the largest segment. It includes values between 0 and 6. We must classify these types of customers as dissatisfied or in somewhat more colloquial terms, Haters. These users have a high potential to provide negative feedback to the brand.

To calculate this metric, we must subtract the percentage of detractors To the percentage of promoters. The people Passives are not taken into account when calculating the NPS. The indicator ranges from -100 points up to 100. After 50 points, the company is considered to be in good health when it comes to customer experience.

Let's give an example: Hello Luz Hire the services of IZO to calculate the degree of satisfaction of your customers. After carrying out the action protocol, the report yields the following conclusion: 72% of the clients were promoters and 12% were detractors. La The NPS score in this specific case would be 60.

What are the Benefits of NPS?

• It's an easy and intuitive tool. When done online, it makes it possible to obtain a very representative sample. The survey is quick, with short questions and very intuitive. It does not require an exhaustive explanation to understand it, so the customer does it in a comfortable way.
• It allows you to homogenize data to analyze customers. As it is such a widespread measurement tool for surveying the opinion of a brand, it allows a common system to have been established. In this way, a reliable metric is achieved that all companies use equally. This results in much more relevant comparative data.
• It is a great asset compared to the competition. It's one of the best indicators for verifying consumer loyalty to brands. Knowing what the competition is doing to increase your NPS is crucial to positioning yourself on time. We can analyze our current situation and pivot in time with new strategies to achieve loyalty.
• It's an excellent health thermometer from a company. It is a test where the score is given by your own customers. NPS information is very valuable if interpreted in the right way. If your score is low, it's a golden opportunity to improve, change course and make better decisions. This is how you create loyal and happy customers who come back and recommend us.
• It provides a barometer for cross-sector comparisons. Today, customers no longer compare us to the competition. Whether you work in a bank or a consultancy firm, they will buy you against the leaders in customer experience. Companies such as Netflix or Amazon are the best in this field. Customers compare with the world's leading references in Customer Experience. There is no need to be left behind. We have to evolve. Not only to provide a better service than the competition, but to innovate and surprise your customer.

What are the Disadvantages of NPS?

Simplicity. Undoubtedly, simplicity helps in many aspects of the customer experience. But in the case of the NPS, things are a little different. Su Simplicity is a double-edged sword. Being such an easy and quick index to measure, it brings with it the handicap that a customer's entire buying process is summarized in a single question. This leads to obtaining data that does not go too deep into the psychological decision-making processes.

Escala. Other of the weakest points pointed out by NPS detractors is the fact that the numerical scale is configured to differentiate the three types of customers. The weighting of this one does not exist. 0 is worth the same as 6 when mounting the indicator. This involves a great loss of information, even knowing that a person who hates the product may have more convincing power than another user who simply recommends it.

Partiality. The indicator is a photograph of the company. The information you transmit to us is partial and we don't know what might be behind a company's situation. It is a great indicator to start working with if complemented by other more complex and detailed market studies.

However, it should be noted that this index is simply a starting point to start making decisions with a qualified team that knows how to interpret and put in place an action plan for Solve the problems that the NPS has found.

If you want us to help you build the NPS in your organization, don't hesitate to write to us at this form and we'll be happy to hear from you 🙂