The NPS and it’s Optimization: Increase or Improve?
Interpretation of the Metric
The Net Promoter Score and it's Value as a Key Figure
The Net Promoter Score is a key figure developed by Fred Reichheld and Bain & Company. Considering the increasing number of competitors, the overall success and growth of every company depends largely on customer satisfaction and loyalty. Therefore, reliable information about customers and their feelings is highly relevant.
Customers indicate the likelihood of recommending a company or certain products on a scale from 0 (very unlikely) to 10 (very likely). Based on the answer, customers are divided into promoters (supporters): 9 to 10, indifferents: 7 to 8 and detractors: 0 to 6. The NPS is the difference between the promoters and the detractors (in percent). The result is between plus 100 and minus 100 percent. Indifferents are therefore not included in the calculation. Despite the simple method of calculation, metric still needs to be interpreted afterwards.
Increase or improve? Interpretation of the metric
Basically the Net Promoter Score is a reflection of customer perception. Therefore it should not be understood as a goal but as a result of your marketing measures. A sustainable improvement of the key figure is not equal to a single increase.
If you are looking for lasting customer loyalty in your company, the goal should not simply be to increase the NPS. This would lead to a misinterpretation of the key figure. Over the years, several methods have developed which providers use to try to artificially influence the NPS. Often they manipulate the figures or use techniques with which customers are pushed into a direction to get benevolent answers.
The Net Promoter Score is not a race for the highest number. The score only makes it easier to evaluate your company in comparison to the competition. While an artificial increase has no meaning, it is nonetheless important to improve the score.
The NPS integrated into the right Approach
At zenloop we consider the essential difference between simply increasing the NPS on the one hand and improving the NPS on the other. The difference is small in conceptual terms, but the both approaches reveal two fundamentally different ways of thinking about using the Net Promoter Score.
Focusing on a simple increase would lead you to the erroneous approach of concentrating on one number only and not understanding its basis. As a pure KPI (Key Performance Indicator) the Net Promoter Score is of little use. A permanent improvement of the NPS, on the other hand, is about keeping an eye on the factors influencing customer satisfaction. The customer and his perception should therefore always be the starting point of all marketing activities.
Therefore, the only way to improve your Net Promoter Score is to properly manage the needs of your customers. Suggestions, criticism or praise need to be taken seriously, because if you listen to your customers, you can implement appropriate improvements. The way customers perceive your brand or products depends directly on how well you respond to their needs. As a result, you will increase customer satisfaction and improve the Net Promoter Score in the long term.