What Is Net Promoter Score (NPS)?

Summary

The video explores the Net Promoter Score (NPS), a key customer experience metric that helps companies measure customer loyalty. By asking customers how likely they are to recommend a company, NPS categorizes them as promoters, passives, or detractors. The score is calculated by subtracting the percentage of detractors from promoters, providing insights into customer satisfaction. The true value of NPS lies not in the number itself but in understanding customer feedback to improve experiences. Companies are encouraged to follow up with customers to identify issues and recognize what drives loyalty, embodying Walt Disney's philosophy of exceptional service.

Takeaways

• 😀 NPS, or Net Promoter Score, is a popular metric used to measure customer experience and loyalty.
• 😀 The core NPS question asks customers how likely they are to recommend a company to others, using an 11-point scale from 0 to 10.
• 😀 Customers are categorized into three groups based on their responses: detractors (0-6), passives (7-8), and promoters (9-10).
• 😀 NPS is calculated by subtracting the percentage of detractors from the percentage of promoters, resulting in a score between -100 and +100.
• 😀 For example, if 40% are promoters and 10% are detractors, the NPS would be 30 after calculation.
• 😀 The primary goal of NPS is not just the score but to identify and rectify issues causing detractors and enhance the factors that create promoters.
• 😀 Follow-up questions should be open-ended to allow customers to express their views freely after providing their NPS score.
• 😀 Companies should engage with both detractors and promoters to understand their experiences and resolve issues.
• 😀 Analyzing the responses from different customer segments can help identify trends and opportunities for improvement in customer experience.
• 😀 To effectively improve NPS, companies need to establish processes for reviewing, prioritizing, and acting on customer feedback.

Q & A

What is the Net Promoter Score (NPS)?

NPS is a customer experience metric that measures the likelihood of customers recommending a company to others.

How does NPS categorize customers?

Customers are categorized into three groups based on their responses: 'detractors' (0-6), 'passives' (7-8), and 'promoters' (9-10).

How is NPS calculated?

NPS is calculated by subtracting the percentage of detractors from the percentage of promoters, and then multiplying the result by 100.

What does a high NPS score indicate?

A high NPS score indicates a greater proportion of promoters, suggesting that customers are likely to recommend the company, reflecting a positive customer experience.

What should companies do with NPS data?

Companies should analyze the responses to identify and resolve issues for detractors and replicate successful strategies from promoters.

Why is it important to ask a follow-up question in NPS surveys?

Follow-up questions allow customers to explain their ratings in their own words, providing deeper insights into their experiences and perceptions.

What actions should be taken to improve NPS?

Companies should establish processes for reviewing, prioritizing, and acting on insights gained from NPS feedback to enhance customer experience continuously.

What role do promoters play in a company's success?

Promoters are valuable as they are likely to recommend the company to others, helping to attract new customers and foster loyalty.

What did Walt Disney emphasize about customer service?

Walt Disney emphasized the importance of delivering exceptional service so that customers want to return and bring their friends.

How can companies leverage insights from NPS responses?

By analyzing responses, companies can identify specific activities and situations that lead to customer satisfaction or dissatisfaction, enabling targeted improvements.