What is “NPS” And Why Is It Important for Marketing

Top 100 Digital Marketing Strategies

When it comes to growth metrics — between our funnel metrics, conversion rates, email open rates, customer close rates, and much, much more — we marketers have a lot to keep track of.

But there is one extremely useful metric that is often overlooked, something many marketers don’t bother to calculate in the first place. And that metric is Net Promoter Score, or NPS.

How Does NPS Work?

Net Promoter Score is a simple calculation of your customers’ loyalty to your business. Your NPS is based on your customers’ answers to this one question:

How likely are you to recommend our company/product/service to a friend or colleague?

Their answers must be given on a scale of 0 to 10.

Respondents are then divided into 3 groups:

  • Promoters are those who respond with a score of 9 or 10. These are your most loyal enthusiasts, who are likely to continue buying from you and encourage others to do the same.
  • Passives are those who respond with a score of 7 or 8. These folks are satisfied with your product/service, but unenthused, and therefore more susceptible to be won over by your competitors.
  • Detractors are those who respond with a score of 0 to 6. These customers are unsatisfied and will not create value for your brand.

To calculate your NPS, simply subtract the percentage of Detractors from the percentage of Promoters.

How to Leverage NPS Data In Your Marketing

As is true of almost all marketing data, your NPS responses offer great insight that you can leverage in your efforts in order to produce better results and grow faster.

In fact, Bain & Company found that, on average, an industry’s NPS leader outgrew its competitors by at least 2X, establishing a strong correlation between a company’s NPS and its rate of organic growth. In other words, a higher NPS is a good indication that you’ll achieve fast growth.

To accelerate that growth even faster, use these 4 tactics to leverage your NPS data for maximum results:

  1. Ask “Why?”

Instead of simply asking for a 0 to 10 score from your respondents, follow up with a “why?” to get more information. Qualitative data will take longer to sift through, but will help you understand the reasons for the scores your customers gave, as well as address any major issues.

Look for patterns in their responses to gain some insight into what your company could do to satisfy more customers and improve your score. Is it a problem of poor onboarding, bad user experience, or an issue within the product? Are they unhappy with your customer service? What is it that’s causing them to give you a low score? Relay this information to the appropriate teams within your company so you can start addressing these issues immediately.

  1. Use your Detractors to prevent customers from churning.

Your churn rate is one of the most critical business metrics to keep in check, since your goal is not only to earn as much revenue as possible, but also to prevent as much revenue loss as possible. If your customers are canceling their subscriptions or returning your products, this is a major area of your business you should be focused on, and your NPS data can come in handy here.

When you conduct your NPS survey, be sure to tie each response to the correct contact in your contact database, so you can link each person’s response to the rest of the information you have about them. Once you have the NPS scores stored in your database, export your customer data and group the data by Promoters, Passives, and Detractors.

Look at the other types of information you have about your customers:

  • When did they last purchase or activate their account?
  • How many times have they purchased from you?
  • How much have they spent total?
  • What’s their projected lifetime value?
  • Where do they live? How old are they? Other demographics?
  • How many times have they spoken to a customer service rep?

See if you can identify any patterns, specifically amongst your Detractors. If you’re able to establish a correlation between a customer’s NPS score and some other data point, you can use that information to help you predict which of your new customers are most likely to become Detractors and/or churn. You might even design a churn risk algorithm based on the data you have from your already-churned customers and factor in these new insights as well.

  1. Inspire brand loyalty in your Passives.

Your Passive scorers (7 or 8) are generally happy with you, but don’t feel tied to your brand. Use this as an opportunity to shift your marketing message toward them!

Instead of immediately asking them to refer their friends to your product, which they’re not ready to do yet, ask yourself how you could inspire them to feel more loyal to your brand.

Here are some ideas for how you might achieve this:

  • Offer valuable, relevant content that helps them in some way.
  • Create a customer loyalty program, where your customers can earn loyalty points by performing certain actions.
  • Create an email campaign that congratulates them on being among your top 100 most loyal customers.

Get creative with it, and look for opportunities to turn more of your Passives into Promoters.

  1. Turn your Promoters into brand evangelists.

Your Promoters are a huge asset to you as a marketer. They’re so happy with your product/service, that they’re ready and willing to refer you to others, if they’re not already doing so.

Take advantage of this by:

  • Creating a referral program that offers incentives for your customers to refer others to your business.
  • Asking your Promoters if you can create case studies to highlight the success they’ve seen with your product/service, then use this as lead nurturing & sales material.
  • Sending them branded swag (like t-shirts, mugs, or pens) as a thank-you for their loyalty and a way for them to show off their enthusiasm for your company.

There are many ways to market to your Promoters to leverage their already-established loyalty to your brand, and this is one of the fundamental strategies to successful customer marketing.

Don’t let your valuable Net Promoter Score data go to waste. Use these tactics to put it to good use, and you’ll be well on your way to faster growth.

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Top 100 Digital Marketing Strategies

Businesses today understand they need to spend money on ads that run across Google and Facebook. Similarly, search engine optimization is now extensively used as well; however, more often than not, the problem is not in the SEO.

We are caught in a wave of constantly evolving digital ecosystem, which mirrors changes in the global economy. There is now a need for a flexible digital strategy to accommodate any change in consumer behaviour. The biggest faux pas a company can make is to stagnate, even momentarily, their digital marketing strategies.

We will share with you our top 100 digital marketing strategies – one at a time so that they are current and effective.

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