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What is a Net Promoter Score (NPS) and how does it measure a brand’s success?

Do you measure the Net Promoter Score (NPS) of your brand?

If you haven’t heard of NPS before, you may be thinking it just sounds like more marketing jargon.

However, once you understand it , your NPS is actually a pretty simple marketing metric that can help to gauge how likely customers are to promote your brand, or complain about it.

In marketing, if it can’t be measured, it can’t be improved.

So, whether your business is a product or a service, make sure you start measuring your NPS.

One simple question

Working out your brand’s NPS is really easy – simply ask your customers one question:

“On a scale of 0 to 10, how likely are you to recommend this product or service?”

Based on their response, you can then divide them into three categories: Promoters (great) Passives (neutral) or Detractors (not so great).

Promoters are those who rated your brand a nine or 10. Passives are those who gave you a seven or eight. Detractors are considered any customer who rates you a six or under.

You get your NPS by subtracting the percentage of detractors from promoters, giving you a score between -100 and 100.

Your NPS can vary depending on your industry, region or the attributes of your customer, such as age or income.

Research by Net Promoter Network shows that the average NPS ranges from two for internet service companies, to 28 for software companies, 35 for the banking sector, 39 for supermarkets, and up to 58 for specialty stores.

If your score is in the negative, you have more detractors than promoters. If it’s positive, you have more promoters than detractors – but don’t get slack, ask them why.

Using the NPS to your advantage

The NPS is a simple way to identify your brand’s strengths and weaknesses. By drilling down into why your customers give you a particular score, you can gain valuable insights into strategic improvements.

NPS often receives criticism for not providing practical and actionable information for a brand. An easy way to counter this is to follow up by asking: “How can we improve?”

You can also use feedback to turn passive or detractor customers into promoters.

And if your NPS is off-the-charts great? Your marketing team can confidently assert your core strengths and competencies in further brand collateral.

According to this article, leaders of an industry, on average, have a NPS more than double those of their competitors.

Promoters are more likely to repurchase, recommend, and forgive a company for mistakes made down the line.

No quick fix

NPS isn’t a silver bullet. While it’s a simple measurement, the solutions to improving it can be much more complex.

Putting change into action requires clear communication throughout your business to transform a customer’s experience for the better in a consistent way, so strong leadership and direction is vital.

Everyone from large telecommunications companies to software start-ups and online retailers can use the NPS to reduce detractors.

By understanding your ‘detractors’ via feedback, you can increase your NPS and greatly improve your brand’s chance of success in a crowded marketplace.

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