Net Promoter Scores (NPS) for Service Companies
- February 16, 2017
- By: Vonigo
Is everything reduced to acronym these days? It seems that way, so add “NPS” to your internal rolodex. NPS stands for “Net Promoter Score:” a phrase that really just means “on a scale of 1-10, how likely are you to recommend us?”
Aside from it’s overly complex name, NPS surveys are hugely helpful to business owners who want to leverage their community of clients and better their business practices.
NPS surveys are built on a few central ideas:
- More satisfied and loyal customers = better sales
- People trust the opinions of their friends.
- Word of mouth is the most effective form of marketing
Those three points are pretty hard to argue with. You can’t buy the press that a good review will grant you, and on top of that, a recurring customer will always bring in more money (for less effort) than a series of one-offs.
An NPS isn’t just a way for you to learn about what your clients think of you. It also tells your customers that you are attuned to them.
How Do I Use an NPS, and Why Bother?
So write a survey and email it to your clients once a service is completed? That’s useful too, but the NPS is measuring something quite different. NPS is ruthless. NPS doesn’t care about how the employees looked. It doesn’t look at the extra mile you went. The
NPS cares about one thing, and one thing only: how likely are you to recommend us, on a scale of 1 (Never!) to 10 (Always!)? The average of these answers is your net promoter-score.
So why bother? Your NPS is the best metric to measure how your customers are feeling about you over time. Maybe you’re having a crazy busy month. The phones are ringing off the hook! Your teams are out on jobs every day! But your NPS score is bringing back a lot of 6s. Would you hire a company that was a 6/10? We doubt it. But knowing there’s an issue is the first step to solving it.
The second step is feeding that information into a field service software so you don’t make the same mistakes twice.
These days, people don’t just talk to their friends about their favorite brands and services. They write blog posts, status updates, and Instagram posts about it. So when you’re deciding whether you want to adopt the practice, imagine a cool 500 pairs of eyes on a positive review of your business.
How Do I Use NPS?
The NPS doesn’t just stop at asking the question. The scores determined require a bit of analysis. “A bit” being the operative words here. The 1-10 basis of the NPS survey is broken into three pieces:
- Those who rank a business from 1-6 are “detractors,” and will not recommend your business. In fact, they might pan your services
- A 7 or an 8 are considered “passives,” and while they might pass your information on, you shouldn’t wager on it
- And lastly, “promoters,” or those who rank your business a 9 are higher: these are your angels and bringers of more business. May all your customers be a 9 or above
Right, But How is the Score Calculated?
This is the formula you can use for calculating your NPS:
(promoters – detractors) / (respondents) x 100
Anything over 0 would be considered “ok” by most companies’ standards, whereas an NPS of +50 is excellent. Once you have your responses, add up your “promoters,” “passives,” and “detractors.” This is where the math comes in: the true and final NPS is your percentage of promoters minus your percentage of detractors.
Want to test it out? Enter the results of your customer survey into this handy free NPS calculator, or subscribe to a service like Delighted, that offers survey and NPS tools for calculating your score, as well as tips on how to improve it.
An NPS isn’t a perfect metric for measuring the success of your business. But it is a single-question that your customers can answer quickly, and a great way of taking a high-level look at your customer satisfaction. Plus, you can make notes of NPS scores right into your service management software.
Want an at-a-glance way of understanding NPS better? Check out this infographic:
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