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what is NPS and how to calculate it?

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Since inbound marketing has emerged, the strategies carried out have changed a lot, especially from the base, with traditional marketing, the product is the centre of the strategy, but now thanks to inbound marketing, the customer takes the importance it has and takes the place of the product, focusing the entire strategy on consumers. In this post we will teach you everything you need to know about the NPS, one of the most important metrics regarding customers.

what is the Net Promoter Score (NPS)?

The NPS, whose acronym is Net Promoter Score, is a key indicator that provides us with information on the degree of satisfaction that customers have with a company, as well as the loyalty they feel towards it. This score is calculated based on a question that is sent to customers to find out whether or not they would recommend the brand, always in a range from 0 to 10.

The NPS gives us as a company a very useful insight into how satisfied your customers are and the level of loyalty they have.

how is it calculated and what is it for?

This survey allows us to find out the level of satisfaction of our customers, and this is important when it comes to being able to take the necessary measures regarding our strategy, thus solving any situation that may be affecting the organisation. You can carry out market research to find out if you are doing well, but only through the NPS can you quantify exactly how satisfied or dissatisfied your customers are with your brand. All this information is obtained through a survey that asks two simple questions:

  1. A score from 0 to 10 of how satisfied you are with your purchase, or the probability from 0 to 10 that you would recommend it to a family member or friend.
  2. The main reason why you gave that score to the question above.

The simpler your survey is, the more likely it is to be answered, so sometimes only the first question is asked and the second is left for later as a follow-up.

There are three different types of customers depending on the score they have given in the survey you have asked them, we show them below:

  1. Detractors: These are the users who score the survey from 0 to 6, these are not happy with the brand or the shopping experience and are a big problem for the company as not only will they not recommend your brand, but they can help to create a negative idea of it.
  2. Passives: This group of people are the ones who score 7 or 8, they are satisfied with the brand but they are not amazed with it, they will not speak badly about it but there is a latent possibility that they will want to change and go to the competition.
  3. Promoters: These people are included in the group of those who score 9 or 10, they are satisfied with the brand and would recommend your company without thinking about it. They are what we could call brandlovers, or at least what most resembles.

why is NPS important?

  1. It helps to evaluate the loyalty of your customers
    Thanks to this you will have information about the loyalty of your customers and the likelihood that they will recommend you to their friends. It also helps you to know the risk of losing customers, that is, the probability that they will not buy from your brand again or that they will choose your competitors. As we already know, it is much cheaper to keep a customer who has already bought your brand than to attract a new one. So this metric will help you convert new customers and retain the ones you already have, generating a higher ROI.

  2. Boost word-of-mouth marketing
    NPS will also help you know how likely your customers are to recommend you, which is extremely valuable to your strategy. It's much better advertising to get a recommendation from someone you trust than from a brand you don't know whose intention is to sell. We can see this in the statistics, as 81% of consumers trust reviews from people they know over advertising.

  3. You will be able to converse with your detractors
    As we have indicated above, detractors are those customers who after consuming your brand have voted the survey with a score between 0 and 6, that is, they would not recommend your products or services. Thanks to having the data of those who have voted this, you will have the opportunity to start a conversation with them to find out why they have had a bad experience with the brand, and thanks to these answers you can find out what disadvantages your product or service has and correct it.

  4. Increase CLV
    The CLV, which stands for Customer Lifetime Value, indicates the benefit that the customer will bring to your company in their lifetime as a customer. Having made the division between detractors, passives and promoters, you can segment your audience and serve them accordingly, taking the necessary measures for each group and solving the problems presented by the detractors.

  5. Create a stronger product

    The best way for your business to succeed is for the products you offer to be of top quality. This is obvious, isn't it, because you can make your products better and better thanks to NPS surveys, which will give you the guidelines to make your products fit the needs of all your consumers.

In conclusion, a metric as simple as the NPS, which is based on the opinion from 1 to 10 of customers and consumers of the brand, can help your company to grow steadily, not only getting the data of what satisfaction your customers have, but getting the reasons why the sector of detractors are not satisfied, which will make us improve as a brand and give to understand to customers that they are the centre of our strategy and we care about them. And you, what are you waiting for to get started in the NPS?

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