The ABC of NPS Survey - What It is and What It's Not

Many things that you do as a brand makes a customer either come back to your brand or avoid it like the plague. So, how does a business keep these personal ratings and variations in them in check? By implementing NPS Survey, which is the easiest way for capturing customer loyalty. NPS index ranges from -100 to 100 and is used for gauging the customer's overall satisfaction with a company's product or service and the customer's loyalty to the brand.

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NPS - A metric or a process?

Both! Yes, you can describe Net Promoter Score as both a metric and a process. Net Promoter Score is a metric that was first developed in 1993 by Fred Reichheld and later adopted in 2003 by Bain & Company and Satmetrix as a way to predict customer purchase and referral behavior. NPS survey is designed to measure your customer's overall loyalty to your brand. Also, businesses have to surpass a series of steps/actions in order to Calculate NPS, which makes it fall into the category of a process too.

CSAT is NOT NPS

When it comes to measuring customer satisfaction and loyalty, NPS is not the only metric that businesses have at their disposal. There many other metrics that are very popular and does the same job quite well. There are many who confuse CSAT with NPS as they both measure customer satisfaction. Arguments have also sparked on the fact that which one is better amongst CSAT and NPS.

Decoding NPS and CSAT

CSAT i.e Customer Satisfaction Score measures the short-term satisfaction of a customer-driven from their latest transaction/experience with a company. It is measured on a scale of 1-5. The basic advantage of CSAT is that it gives quick results as compared to NPS. For e.g- if a company is looking forward to just hearing about their new product/service they can count on CSAT to bring results within 30 minutes or so after their new product/service was used.

NPS is for relationships and not one time transactions and experiences. NPS deals with the long-term satisfaction and loyalty of a customer. So, if organizations want to measure customer loyalty based on a customer's perception of their overall customer journey, then NPS is what they require.

How actionable is NPS?

Your NPS survey will be as actionable as you would want it to be. By this what we mean is that it depends solely upon the organization implementing the NPS survey that how fruitful and action-oriented they want to make it for themselves.

We at Zonka think that an action-oriented approach is more important for a business rather than the choice of metric to be used. What really matters is the number of changes made by a business based on what they learned from using the metric. The NPS calculation would mean absolutely nothing unless you decide to do something with it.

The first step towards making the NPS survey actionable would be by simply adding a question directly asking the customer ‘the reason for their score’ post the NPS question. The NPS score, in the end, is just a score and you will never be able to figure out what could probably be the difference between a 6 and 8 score. It will be this question that will help you decipher the actual reason behind the score. Not only this, the reason provided by the customer will then become the basis of your follow-up action plan.

Is NPS for me?

NPS survey is just as applicable to small business as it is to global corporates. The bottom line for any business is their growth and the NPS system is correlated with increased business growth.

HOW?

There were many studies conducted by Harvard Business Review, Satmetrix and Bain and Company that found out that there is a strong correlation between the Net Promoter Score and a business's revenue. Their research also shows that when companies adopt to implement the NPS system and use it as a key metric, it helps drive business growth as the company becomes more focused on improving the score.

Moreover, the NPS score gives businesses a numerical value through which they can actually measure and compare something intangible such as a customer’s loyalty and satisfaction.

Net Promoter Score survey is just as applicable to small business as it is to global corporates. The bottom line for any business is their growth and the NPS system is correlated with increased business growth. There were many studies conducted by Harvard Business Review, Satmetrix and Bain and Company that found out that there is a strong correlation between the Net Promoter Score and a business's revenue. Their research also shows that when companies adopt to implement the NPS system and use it as a key metric, it helps drive business growth as the company becomes more focused on improving the score.

Moreover, the net promoter score gives businesses a numerical value through which they can actually measure and compare something intangible such as a customer’s loyalty.