What Is a Net Promoter Score and How Can It Improve Revenue?

What Is a Net Promoter Score and How Can It Improve Revenue?

Posted by Stephen Spiegel on Jul 10, 2019

Net Promoter Score to Improve Revenue


Happy customers foster growth

We don’t get into business to upset customers and leave ourselves in debt. We want happy customers, record profits, and amazing growth. There are many ways we can do this, but data is at the root of all of them, and a net promoter score can tell you exactly where you stand with customers.

Net promoter scores (NPS):

  • Tell you who’s happy with your company and who’s not
  • Allow you to see how well your business is doing in the eyes of your customers
  • Show you where there’s room for growth
  • Tell you which customers to focus on to experience the growth you want
  • Can shed light on areas for improvement

So, what is an NPS?

In short, it’s a single question that tells you how good a customer thinks your business is. The longer answer is: it’s a survey with one question that, when customers answer it, tells you which customers are more likely to promote your business through word-of-mouth, which customers are satisfied, but not loyal, and which ones did not like their service at all.

The system asks a customer to rate your business on a scale of 0-10, and the higher the score, the more likely they will tell others about the experience they had, the services or products you offer, and encourage them to work with you.

Likewise, the lower the score then the opposite may happen. These are typically the people who will leave a low score review, tell others what a terrible experience they had, and how others should never do business with you.

Unlike typical customer surveys, these aren’t sent out after each transaction or interaction. An NPS survey is sent out every few months, typically at the end of the quarter, to find out how well your company is doing.

Your company could do as bad as -100, or as good as 100. Typically, unsatisfied customers are those that rate your company a 6 or lower, while promoters will rate it a 9 or 10. The people who rate it a 7 or 8 aren’t likely to take action either way. They like your business well enough, but they’re not going out of their way to promote it to other people, so they don’t figure into the final score.

Calculating the score isn’t difficult. You subtract the percentage of unhappy customers from the percentage of promoters, and you have your answer.

How NPS relates to growth

Naturally, the higher your NPS, the more likely you’ll experience growth in the future. Of course, loyal customers aren’t the only thing which factors into your growth, but it’s a good indicator that if you were trying to grow your brand and had plans in place to do so that your customers would support that growth. It also doesn’t take into consideration outside factors that can impact your company, like a downturn in the market, a recession, or any of the other hundreds of variables you don’t have control over.

Relating to your NPS, your future growth depends on keeping those loyal customers happy. If we try to focus on making the unhappy customers happy once again, we are going to waste more resources than we would by simply keeping our promoters happy and doing their thing, which is spreading their love for our brand.

Fostering stronger relationships with your promoters is a good place to start when you’re trying to grow. These relationships are already solid, and you’ll spend less money selling to them. With the increase in service and making your promoters happy, they will spread good publicity about your business, and new customers will naturally come to you because of the great word-of-mouth.

Finding the reason for low numbers

Of course, we all want to improve our business. If we receive low numbers, there’s a reason for it. Follow-up questions should be asked to help understand the reason. Like a customer satisfaction survey, the NPS follow up can tell you where there’s room for growth in your company, and where the disconnect is.

It will take resources to get to the bottom of the disconnect, but it could also be something as straightforward as a disengaged employee ruining the customer experience. Correcting the issue is unlikely to bring unhappy customers back into the fold, but it will clear the path so future customers don’t experience the same dissatisfaction.

CrewHu makes using customer feedback simple. Our online tools help businesses stay in the loop both internally, and externally. We encourage you to see for yourself. Sign up for a free trial and start maximizing your company’s potential today.

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