recommendation

 

How likely are your customers to recommend you to a friend?

On a scale of 1 – 10, how likely are you to recommend Tyrrell and Company to a friend?

This question is the basis for calculating your Net Promoter Score (NPS), and let’s face it, it’s the question all businesses want the answer for – are you likely to refer, and if not, why? 

Collecting the answers from this question gives you a sneak peak behind the customer satisfaction curtain so that you get an accurate view of how you’re perceived, and make decisions based on real data rather than assumptions or isolated reviews. 

No matter how our digital world advances, word of mouth is still incredibly valuable to all businesses, whether consumer or service based. Your net promoter score, and the comments that come with it, will help you to make improvements that build greater customer loyalty, and boost referrals. 

Periodically, we send out surveys to our clients as customer service is of huge importance to us. We’ve now had over 800 responses to this survey with an average rating of 9.6/10  – something we are very proud of along with our NPS score of 88. When you consider brands such as Apple has an NPS score of 47 and John Lewis

Some of your favourite brands will be using NPS too, and it’s interesting to note industry average when you’re benchmarking against your competitors. Apple’s last recorded NPS score was 45, and the industry average for Consumer Brands / Electronics is 45. Our NPS score is 88. Although we’re not quite in the same industry as Apple, our customer service is something we pride ourselves on. 

 

How to calculate your NPS

 

1. First things first, you’ll need to ask the question. 

It’s simple really. You ask your customers how likely they are to recommend you: 

On a scale of 1-10, how likely are you to recommend [your company/product/service] to a friend?

You’ll need to give a scale from 0 (not likely) to 10 (extremely likely), and a way for your customers to select their answer. You could use a template like this from Survey Monkey to gather your data. This is something you can share in an email update, in your follow up to a product launch, or at the end of a project. 

For a more thorough look at customer satisfaction, follow up your initial question with a second open-ended question. Either leave a blank space and encourage comments of all kinds, or ask something specific. This could be ‘Please give the top reason you’re unlikely to recommend’ or ‘What would make you rate us 10?’.

Scary as it may seem, this allows your responders to give honest feedback about their experience working with you, and delivers you more transparency about what needs work.

 

2. Sort your responses into categories

Based on the score they give, your customers or clients can be categorised into the following groups:

  • Promoters (Those who answer 9 or 10) – These are the loyal customers who are most likely to send friends and peers your way. 
  • Passives – (Those who answer 7 or 8) – The indifferent group in the middle. The passives have the potential to move up to become promoters, or down to detractors depending on how well problems are resolved and improved upon. 
  • Detractors – (Those who answer 6 or below) – This group are generally unhappy, and could damage your brand if experiences are shared publicly. 

 

3. Calculate your score

Now that you’ve categorised your answers, look at the percentage of promoters and detractors. To calculate your NPS, you subtract the detractors percentage from the promoters percentage. 

So if you have a hundred results, 60% of which are promoters, 20% passives and 20% detractors, your net promoter score would be 40. 

Simple. But why?

 

Three benefits of calculating your Net Promoter Score

 

  • It shows that you’re always looking for areas of improvement

Possibly one of the most important factors. Asking your customers and clients for honest feedback is proof that you’re willing to hear constructive criticism and you’re invested in improving their experience. 

Not to mention, it may be the first time you have real customer data to help you make key decisions within your business. 

Here’s an example in our industry. Recently, Xero did some research into the top reasons business owners were likely to change accountants. They used the NPS structure to gather data from thousands of business owners and found that the top reasons were:

  • Lack of support 
  • Limited industry knowledge 
  • Feeling like a low priority 
  • Not up to date with technology 
  • Unresponsive
  • Not enough value provided

Although this is an across-the-board result, it has allowed us to ensure that we’re addressing all of these pain points, and also shows us that there are still owners out there looking for the tools to build a more efficient and profitable business (the whole reason we created our Xero Trifecta). 

  • It’s an easy way to collect the data

There is still immense value in taking individual feedback on board, gleaning testimonials, and generating reviews on google. That being said, you have nothing to lose by incorporating NPS into your business to get a greater picture of where you stand – and so simple to adopt.

We use Customer Sure to collect data from our own clients. Feedback software like this makes it even easier to allow your customers to review you, but you can do it yourself if you don’t want the extra cost. It’s also an incredibly low maintenance and simple way for your clients to review, with only one or two questions to answer.

  • You can reach unhappy customers before it’s too late

The first step is asking for the feedback. Once you have the feedback, it’s what you do with it that can really make a difference to the people you serve. Categorising your answers gives you a chance to identify the people who are truly unhappy, and to follow up with them personally. It also allows you to see who is hanging in the balance. The NPS calculation lets you catch the passives before they become detractors and turn their experience around, instead of than losing them to your competitors. 

Bringing the net promoter score system into your business is a small and simple task with a huge potential payoff. It’s a chance for you to listen, adapt and grow. 

So the question is, how likely are you to embrace NPS on a scale of 0 to 10?

Let us know.