“Feedback is the only way to ensure you are still on the right track.”– Jack Welch
The true test of a business starts when customer loyalty is called into question. Understanding how customers feel about you is critical for any business. Now the question is, what is the best way to learn about your customer loyalty and whether they will suggest you to friends, family, or colleagues?
The answer is- NPS. NPS is a technique to assess customer loyalty, and it also helps you develop a customer base. NPS surveys have grown in popularity as a method of gauging customer loyalty and identifying areas for improvement.
The timing of these surveys, however, has a major effect on their effectiveness. If the timing is not proper, you may not receive as many responses as you expected. However, there are several things to consider before going into survey time. So let’s dig right in.
What is NPS?
NPS stands for Net Promoter Score, which is a popular business metric for measuring customer satisfaction and loyalty. It is based on a single-question survey, also known as the NPS survey, which is –
“On a scale of 0 to 10, how likely are you to recommend us to a friend or colleague?”
NPS is regarded as the gold standard for determining customer loyalty and is different from any other similar metric. It is more than customer satisfaction since, according to this indicator, your customers not only love your brand but will go out of their way to choose you over any other. They are not only your loyal customers, but they have also become your advocates putting them one step ahead of loyalty in their path.
How to calculate NPS?
Calculating NPS is super simple. Everything depends on the NPS question: “On a scale of 0 to 10, how likely are you to recommend our [product/service/company] to a friend or colleague?”
Customers are classified as promoters, detractors, or passives in the Net Promoter system based on how they respond to the above question.
- Promoters: These are the customers who give you a 9 or a 10 as an answer to the standard survey question as discussed above. These are the customers who are the most loyal of all. They represent a company’s most enthusiastic and committed customers: these individuals are likely to act as brand ambassadors, improve a brand’s reputation, and generate referral flows, all of which contribute to the company’s success.
- Passives: These customers rate you as a 7-8. They are not actively promoting a brand, but they are also unlikely to harm it through unfavorable word of mouth. Although they are not counted in the NPS calculation, passives are extremely near to being promoters thus it is always prudent to spend time researching how to win them over.
- Detractors: They provide you with a rating of 0-6. This group reflects dissatisfied clients who are unlikely to purchase from you again. Detractors can dissuade customers from investing in your company, which is why it is critical to pay special attention to this area.
Once collecting all the data and segregating them into the above three categories, the further calculation process involves putting them into the following formula:
(Number of Promoter Scores/Total Number of Respondents) – (Number of Detractor Scores/Total Number of Respondents)
Here’s an example calculation:
Suppose you surveyed 300 customers, and the results were as follows:
Promoters (scores 9-10): 150 customers (50%)
Passives (scores 7-8): 90 customers (30%)
Detractors (scores 0-6): 60 customers (20%)
Calculation:
NPS = (Number of Promoter Scores/Total Number of Respondents) – (Number of Detractor Scores/Total Number of Respondents)
NPS = 50% – 20% = 30
In this example, the NPS is +30, indicating a positive sentiment among customers.
Remember that NPS is just one metric, and it’s important to consider it alongside other metrics and qualitative feedback to gain a comprehensive understanding of customer satisfaction and loyalty.
What is a “Good” NPS?
A “good” Net Promoter Score (NPS) can vary based on factors such as industry, competitive landscape, and customer expectations. Generally, the interpretation of NPS scores falls into the following categories:
Negative-0 NPS: If your NPS is negative, it indicates that you have more detractors than promoters. This suggests that there are significant issues with customer satisfaction and loyalty that need to be addressed urgently.
NPS between 1 and 30: This range is considered a modest or acceptable NPS. It suggests that while you have more promoters than detractors, there’s room for improvement to enhance customer loyalty and satisfaction.
NPS between 30 and 50: This is a good NPS range. It indicates that you have a healthy balance of promoters and detractors and that your customers generally view your products or services favorably.
NPS above 50: An NPS in this range is considered excellent. It signifies that a significant majority of your customers are promoters and are likely to recommend your company to others.
NPS above 70: NPS scores in this range are exceptional and rare. They indicate exceptional customer loyalty and a high likelihood that customers will actively promote your products or services.
However, it’s important to consider that “good” and “bad” scores are relative and can vary based on your industry norms and the competitive landscape. Some industries naturally have lower NPS scores due to the nature of their products or services. Additionally, NPS should not be viewed in isolation; it’s valuable to also consider trends over time and to combine NPS with other metrics and qualitative feedback to gain a more comprehensive understanding of customer sentiment.
Types of NPS
NPS comes in several forms and has multiple purposes to fulfill. Many customer-centric businesses employ three types of Net Promoter Score surveys to listen to their consumers and discover their pain problem areas.
Following are the 3 types of NPS:
- Transactional NPS or tNPS
- Relational NPS or rNPS
- Employee NPS or eNPS
Transactional NPS (tNPS)
Transactional Net Promoter Score (tNPS) is a variation of the traditional Net Promoter Score (NPS) that focuses on measuring customer loyalty and satisfaction based on specific transactions or interactions with a company rather than the overall relationship.
While the standard NPS typically asks about the likelihood of recommending a company as a whole, tNPS focuses on the customer’s experience with a particular interaction, purchase, or touchpoint.
Relational NPS (rNPS)
Relational Net Promoter Score (rNPS) is a framework applied to measure customer loyalty and satisfaction over the long term, based on the overall relationship customers have with a company or organization.
The term “relational” in “relational NPS” emphasizes that this NPS measurement focuses on the overall relationship a customer has with the company rather than a specific transaction or interaction. It’s a holistic way to gauge customer loyalty and satisfaction over time.
tNPS vs rNPS
Transactional NPS, as the name implies, deals with customers per transaction, such as a phone call or an agent visit. As a result, the frequency of sending survey forms is increased, like sending them immediately after the transaction is done.
However, rNPS is more concerned with a company’s overall relationship with its customers. As a result, the frequency with which the surveys are sent is lower than with tNPS. It is typically used to compare year-over-year or quarter-over-quarter customer success, therefore feedback forms are handed out annually or quarterly, depending on organizational goals.
Employee NPS (eNPS)
Employee Net Promoter Score (eNPS) is a metric used to measure employee satisfaction and loyalty within an organization. Similar to the traditional Net Promoter Score (NPS) used to measure customer loyalty, eNPS assesses how likely employees are to recommend their workplace to friends or colleagues.
eNPS provides organizations with insights into their employees’ overall satisfaction and engagement levels. It’s a valuable tool for understanding employee sentiment, identifying areas for improvement, and tracking changes in employee satisfaction over time. Just like with customer NPS, organizations can use eNPS to set goals, track progress, and take actions to enhance the employee experience.
Choosing the Right NPS Distribution Method
When it comes to distributing NPS surveys, there isn’t a one-size-fits-all answer to the “best” method, as it can vary based on businesses, target audiences, resources, and goals. However, there are some common NPS survey distribution methods as below:
Email Surveys:
- Pros: Email surveys are easy to distribute to your existing customer base. They provide a direct link to the survey and can be automated using survey tools.
- Cons: Response rates can be lower due to email overload or spam filters. You might also miss out on feedback from customers who don’t regularly check their email.
Website Pop-ups or In-app Surveys:
- Pros: These surveys can be displayed directly to users while they’re using your website or app, making it convenient for them to provide feedback in real time.
- Cons: Users might find these pop-ups intrusive, affecting their overall experience. Response rates can vary depending on the timing and presentation of the survey.
SMS or Text Message Surveys:
- Pros: SMS surveys can be convenient for customers who prefer quick interactions and are more likely to respond promptly. They can also be automated.
- Cons: You’ll need customers’ phone numbers, and some might find unsolicited text messages annoying. SMS surveys are limited in terms of the amount of information you can gather.
Phone Surveys:
- Pros: Phone surveys allow for personalized interactions and can yield detailed insights. They can be particularly useful for B2B relationships or for gathering in-depth feedback.
- Cons: Phone surveys can be time-consuming and costly. They might not be well-received by customers who prefer online interactions.
Social Media Surveys:
- Pros: Social media platforms provide access to a wide audience. They can be effective for reaching a younger demographic and generating quick responses.
- Cons: Responses might be more informal and less detailed. The reach of social media surveys depends on your follower base and algorithms.
Paper Surveys:
- Pros: Paper surveys can be distributed at physical locations like stores or events. They can be useful if you’re interacting with customers in person.
- Cons: Paper surveys require manual data entry and might have a lower response rate compared to digital methods.
Combination of Methods:
- Often, a combination of distribution methods works best to reach a diverse audience and improve response rates. For example, you might start with email surveys and follow up with SMS reminders for non-responders.
Why is the timing of NPS surveys important?
The timing of Net Promoter Score (NPS) surveys holds significant importance as it directly impacts the accuracy and relevance of the feedback gathered. Customer experiences are dynamic and can vary at different stages of their interaction with a product, service, or brand.
Sending NPS surveys at the right moments ensures that customers provide feedback when their impressions are fresh and contextually relevant. Surveys sent too early may not capture the full scope of the customer’s experience while sending them too late might lead to diminished recall and less accurate feedback.
By strategically aligning survey timing with key touchpoints in the customer journey, businesses can obtain insights that reflect the nuances of customers’ interactions, enabling them to make timely and informed decisions for enhancing satisfaction, loyalty, and overall experience.
The Right Time To Send NPS Surveys
The right time of sending an NPS survey depends on which industry vertical is being dealt with. We have covered a few important verticals below:
Retail and ecommerce-
In the retail and e-commerce vertical, the “right” time to deliver an NPS survey can vary depending on your individual business model, customer path, and goals.
Sending an NPS survey quickly after a consumer completes a purchase is one approach that can provide significant insights into their entire shopping experience, product satisfaction, and the checkout process. This could happen within a day or two of purchasing.
Another possibility is sending a survey of the consumer after they’ve received their order will help you evaluate the quality of delivery, packaging, and the condition of the things they’ve purchased. Sending an NPS survey after a few transactions to consumers who make regular or repeat purchases might reveal insights into their continued happiness and loyalty.
Sending an NPS survey to customers who abandoned their shopping carts will help you understand why they left and get suggestions for improvement.
Consumer durables-
The best time to send an NPS survey is if a customer has recently interacted with your customer support or service team for maintenance, repair, or technical assistance, sending a survey afterward can help measure their satisfaction with the assistance they received.
When customers choose to replace or upgrade their consumer durables, this presents an opportunity to assess their loyalty and satisfaction with their previous purchase and their motivation for upgrading is another good stage for asking for feedback.
For products with warranties, sending an NPS survey toward the end of the warranty period can provide insights into the product’s performance over time and the customer’s overall experience.
BFSI-
Given the sensitive and personal nature of financial services, it is important to ensure that survey timing respects the privacy and preferences of customers.
Sending an NPS survey after a customer opens a new account or completes the onboarding process. This helps you understand their initial impressions, the ease of the process, and their overall satisfaction with your institution is a good idea.
Send a survey after the completion of a significant financial transaction, such as a loan application, investment, or insurance purchase. This allows you to gauge their satisfaction with the process and the assistance provided. For customers who have secured a loan or mortgage, sending a survey at the time of disbursement or approval helps capture their sentiments about the terms, rates, and overall experience.
Travel-
In the travel industry, the timing of sending NPS surveys is crucial due to the various stages of the customer journey and the unique experiences associated with travel.
Send an NPS survey shortly after customers book their travel arrangements. This allows you to capture their initial impressions of the booking process, website usability, and overall satisfaction.
A follow-up survey sent a week or two after the trip allows you to gather more reflective feedback on their overall experience, any memorable moments, and their likelihood to recommend your services.
If customers booked travel for a special occasion like a honeymoon, anniversary, or birthday, sending an NPS survey afterward helps you assess how well you met their expectations and created a memorable experience.
Wrap-up with Feedback pro-
Feedback Pro is a complete feedback management product that assists you in converting customers into brand promoters.
With Feedback Pro, you can automatically collect feedback at the end of every encounter. Using its sophisticated reporting and analytics features, which can output reports in 1000+ formats, you may analyze and improve customer service indicators like as CSAT scores, NPS, and so on. Make informed decisions that will help your business develop while keeping your customers satisfied.
Talk to our product squad today!
,
,
,
,
,
,
,
,
,
,
,
,
,
