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CXM Guide

Net Promoter Score (NPS)

Learn all there is to know about Net Promoter Score (NPS), why contact centers need to pay attention to it, and how organizations can improve their score.

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What is a net promoter score?

Net Promoter Score (NPS), trademarked by Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld, is a survey metric that measures customer loyalty and stems from the Net Promoter System. The Net Promoter System provides practical and actionable processes for building better customer relationships, facilitating individual and organization-level learning, while simultaneously raising the value of the company.

Organizations focus on NPS to build better relationships with their customers and to grow a loyal community. Companies measure NPS by asking their customers how likely they are to recommend the business to a friend or colleague, on a scale of 1–10. 

According to Bain & Company, businesses with NPS two times higher than the average company achieve long-term profitable growth. 

Why do contact centers need to pay attention to NPS?

Customer experience is one of the biggest influences on customers’ perception of your brand. And brands that deliver stellar customer experiences tend to make as much as five times more revenue than their competitors. That means the main objective for your contact center should be to provide the best customer experience possible.

However, building brand loyalty without Quality Assurance (QA) is extremely difficult — if not impossible. Unless you understand how successful your team is in helping your customers, you won’t be able to meaningfully improve conversions and revenue. There is a lot of data that needs to be assessed when it comes to QA monitoring and measurement, which can quickly become overwhelming. Keep in mind that time and resources are limited, so you need to focus on the right data and right way to interpret that data in order to gather actionable insights. 

This is where NPS comes in. It’s one of the most useful metrics for contact centers, as it directly asks customers the question: “on a scale of 1–10, how likely are you to recommend the company or agent you spoke with to colleagues, friends, or family — and why?”

One good way to look at NPS is as your customer balance sheet.

NPS also provides a number you can compile and track regularly; not just for the contact center, but for every agent working hard to solve customer inquiries. You can track it for different teams, customer segments, and functional units. The objective of tracking NPS is to turn customers into advocates — and reduce your number of detractors. 

Delight Customers with a Unified Care Experience

How can contact centers calculate NPS?

NPS is calculated using the answers you receive to the question you asked your customers — about the likelihood that they would recommend your brand. Your score will give you a clear idea of how happy customers are with your service.

The scale is an open range from 1–10, which eliminates the possibility of a customer giving you a 0 or 5 out of 5 (a score of 0 is too extreme and doesn’t leave much room for constructive feedback, while for some customers providing a 5 out of 5 may imply an unenthusiastic satisfactory score rather than genuine high praise that leaves no room for improvement). A scale of 1–10 makes it easier to understand where exactly the customer places your organization in terms of the experience they received. Allowing you to get to know your customers better and strengthen your relationship with them. 

How to calculate the NPS formula

There are two ways to calculate NPS. Choose the method that works best for you.

The first method takes into account the vote of each detractor as -1, the vote of passives as 0 (or neutral), and promoters as +1. Simply add the number of detractors to the number of promoters for your NPS. 

Here’s the first formula:

nps formula 1

Let’s say you have 10 voters, out of which two are detractors, three are passives, and five are promoters. You would then have a score of 3 for NPS. That would look like this:

NPS = (5*1) + (3*0) + (2*(-1)) = 5-0-2 = 3

The second method involves subtracting the percentage of detractors from the percentage of promoters.

nps formula 2

Using the above example, that would look like this:

NPS = 5% – 2% = 3

Note: NPS is not expressed in percentages. It is a value determined on a scale of -100 to +100

What is a high and low NPS?

If you take the NPS scale into consideration (from -100 to +100), any score higher than 0 is a good Net Promoter Score as it means the majority of your customers are happy. If the score is below 0, this signals unhappy customers and it may be time for you to focus more on your customer experience. 

According to industry NPS benchmarks, a score of 50 or more is considered fantastic, and a score over 70 means you are a bona fide customer-centric brand. 

A high score for NPS indicates your customers will continue doing business with you because they love your products or services and are strong advocates of your brand. Amazon, for example, has a score of 62. And recent research shows that more than 70% of people who try out Amazon Prime become paid members, more than 90% of members renew their subscription for a second year, and more than 95% of members continue their membership for a third year as well. As a result of Amazon’s high score, they now have more than 200 million Prime members worldwide (as of 2020).

Learn more: How to connect with customers and create a more human customer experience

How do you read NPS results?

On the scale of 1–10 for answering the NPS question, the score that a customer gives you becomes the basis for classifying them as either promoters, passives, or detractors. 

  • Promoters are satisfied, happy customers who give a score of 9 or above: these loyal customers have a high probability of becoming advocates of your brand and are highly satisfied with your offerings. 

  • Passives are satisfied, but not fully engaged customers who give a score of either 7 or 8: these customers are neutral and are neither satisfied nor dissatisfied with your offerings.

  • Detractors are customers who are unhappy with their experience and give a score between 0 and 6: these customers did not like your offerings and are more likely to leave bad reviews or poor feedback about your company.

Let’s look at each of them in detail.

nps-recommend-chart

How can contact centers conduct NPS surveys?

NPS is customer-focused and the corresponding data comes from conversations with customers through periodic surveys, follow-up questions, and similar data-gathering methods. 

You can deploy NPS surveys through these five methods:

1. Email

After a customer has made a purchase or had a key conversation with your agent, you can follow up and email them NPS survey questions to fill out. It is one of the most common ways to receive a customer’s response. 

2. Website pop-up survey

A website pop-up survey is one of the best ways to get customers to engage with your NPS survey. Pop-up surveys can be extremely effective if used properly. This is because you can decide to place it anywhere within the buyer journey. It can show up after the customer purchases your product, for example, or after they have a major interaction with your agent.

This way, you can segment NPS data on the basis of context. That in turn gives you a better insight into the customer journey. Placing NPS surveys across different pages increases the probability of reaching respondents and receiving higher survey response rates. 

nps-feedback-popup

3. Feedback tab

Seek feedback from your customers by adding a tab that they can easily click to open directly from your website. Customers can submit feedback whenever they wish, without going through the hassle of visiting an external page. 

nps-feedback-tab

4. Mobile app and SMS

Gather scores for NPS more effectively by sharing surveys through your app and SMS platforms. SMS is still one of the most direct ways to reach your customers — and this approach has a tremendous open rate. And with smartphones, respondents can fill out your NPS survey from anywhere in the world, at any time. 

5. Social media 

Getting better engagement on social media lays the foundation to collect more customer feedback from your engaged customers. One way to leverage social media is by organizing contests to collect NPS that offer rewards, e.g., vouchers, for participation. 

Also, most social media platforms have the feature to conduct polls. You can collect feedback from your customers through Instagram stories, Facebook, LinkedIn, and Twitter polls.

Learn more: 3 effective ways to improve customer engagement on social media

Tip: Craft your NPS survey to be in sync with the customer journey. It will help you identify issues and gaps in the consumer experience.

5 Ways to Improve Customer Response Times — and Your Bottom Line

What’s the difference between NPS, CSAT, and CES?

When it comes to measuring customer experience, organizations leverage these three metrics: Net Promoter Score (NPS), Customer Satisfaction Score (CSAT), and Customer Effort Score (CES). 

While all three gather customer feedback on how a customer feels about your products or services, there are key differences between them when it comes to their use cases and objectives. Below is a table that compares these three metrics at length:

nps-table

How can you improve your contact center NPS?

The problem statement

Imagine your company is struggling with business growth due to low NPS in your contact center. The interest of customers is dipping, they skip your calls, and even when they do answer your call, they hang up quickly. 

As an organization, you should focus on your agents’ performance and figure out any problems that need to be fixed in the process. 

Before you implement any major reforms, you can leverage NPS to understand your customers’ perspectives and whether they are willing to work with you. A customer’s time is valuable — and so is yours. So you need to focus on two major indicators:

  1. Average Speed of Answer: Average Speed of Answer (ASA) is a conclusive contact center metric that tracks the average time a customer needs to wait in a queue before a service agent talks to them. 

  2. Average Handling Time: Average Handling Time (AHT) is a key metric for contact center management that is used to monitor an agent’s performance. It tracks the average duration of contact for a customer on a call.

How fast your agents answer a customer’s query and how much time they spend listening to their problems will determine customer loyalty. Customer loyalty can be evidenced by referrals, churn rate, and overall satisfaction. 

Being customer centric helps your brand improve NPS in two ways:

  • Identifying customer needs: understanding the needs of your customer helps you align your solutions with their expectations, which in turn increases your customer satisfaction rate. 

  • Understanding the customer journey: when you become aware of the path your customers are going through while buying your product, you can leverage this knowledge to follow up and adjust your strategy as necessary. Provide customers with better service at different touchpoints and deliver an overall better experience. 

Learn more: CX priorities in 2022: tips to provide a positive customer experience

Here are five ways you can be customer-centric and improve your NPS.

1. Deliver great customer support

Excellent customer support and service is what makes or breaks a business. If you have a great product but poor service, you will lose customers. Therefore, be quick to answer when a customer comes to you with a query or complaint. Implementing live chat is one of the best ways to address customer concerns quickly — it can help you assist customers 82% faster. 

With live chat, you can connect with your customers sooner, predict their issues, proactively reach out with personalized 1:1 support, resolve incoming requests, and collect valuable data to inform better agent-led resolutions.

Instant responses mean happier customers and higher customer retention — and less of a burden on your support team.

nps-response-graph


How does live chat improve your NPS?

  • Faster response time: using live chat empowers you to deliver faster assistance through predefined answers for FAQs. You can direct the conversations to the right teams, improve your average speed of answer, and increase customer satisfaction.

  • Instant resolution: live chat helps you address customer issues in real time leading to happier customers. 

Learn more: How AI can make your contact center’s routing strategy more efficient

2. Engage with your customers in real time

Reducing response time and average handling time (AHT) leads to an increase in NPS. Customers expect instant responses. If you can quickly respond, you can transform a detractor into a promoter and leverage their word-of-mouth advocacy for your brand to acquire new customers. 

If a query or complaint stays unresolved for a long time, it indicates poor customer experience. Left with a bad impression, customers can share their experience online and also spread negative word-of-mouth.

When you engage with customers in real time, you reduce the average response and handling time to a great extent. 

3. Create a quality assurance program

Design a customized quality assurance program. Ensure every customer receives high-quality service and create a benchmark to measure agent performance. 

Once you know who your top-performing agents are, you can create a training program for your newly hired agents. Create an incentive program and keep your agents motivated. After all, happy employees lead to happy customers.

Learn more: How to Turn Your Agents Into Advocates

4. Track and assess calls

Track and assess agent-customer calls to understand what is working, what your agents are doing right, where they are going wrong, and how to increase customer satisfaction. 

Find out ways to improve the quality of calls and train your agents in keeping the interest of customers as their top-most priority. Keep in mind that a satisfied customer is more likely to recommend your brand to friends and family.

5. Take action on customer feedback

If you are asking for feedback from customers, make sure you spend a good deal of time addressing that feedback and taking necessary action. Customers are always curious to know if their feedback holds any value. 

When you address your customers’ feedback, you build a relationship of trust with them. Remember that your customers have the best ideas about how to make your business better because, at the end of the day, they are the ones directly using your products and services.

Learn more: 3 Customer Experience Lessons from Brands Who Show They Truly Care

To implement the above five pointers, you need to:

  • Deliver better customer support on the channels your customers love

  • Add support for more of the channels your customers prefer in less time

  • Easily manage all your contact center functions from one centralized place

  • Empower your agents to be more productive

  • Analyze contact center metrics instantly

The Essential Guide to AI for Customer Service

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