Methods for measuring the consumer loyalty index. NPS: What is Net Promoter Score and how to start counting it. Using the NPS indicator for company development

It's no secret that the long-term success of almost any company directly depends on the loyalty of its customers. A good attitude of consumers is made up of many factors: whether the products or services of the company are pleasant, whether the level of service is satisfied, whether they consider the organization to be reliable, etc. Companies today measure consumer attitudes on an ongoing basis. The indicator comes to the rescue in this. NPS is the consumer loyalty index. What "signals" does this indicator give to various business areas? How does it help individual companies? And what are the pros and cons of this method? Let's take a look at examples from different market segments.

Quite a bit of J. Recall that the loyalty index NPS (Net Promoter Score)defines the commitment of consumers to a product or company. The indicator, even by marketing standards, is quite young: it was first presented in 2003 by the American business strategist Frederick Reicheld. The Net Promoter Score is very easy to measure. For this, consumers are asked to indicate on the scale from 0 to 10how likely they are to recommend a company / product / service. According to the results, all respondents are divided into three groups:

• "Promoters" (9-10 points) - loyal customers, ready to recommend;
• "Passive" (7-8) - passive clients, generally satisfied, but unwilling to recommend;
• "Dissatisfied" (0-6) - not satisfied and will not recommend.

The NPS Index is calculated as the difference in the relative number of promoters and disaffected. The larger it is, the higher the customer loyalty.

There are 3 main types of companies, according to their NPS indicator:

• 5-10% NPS - average companies in terms of consumer loyalty. For such organizations, neither customer outflow nor tangible growth in the foreseeable future is typical.
• 50-80% NPS - the most successful companies, leaders in their market. With high customer loyalty, they guarantee themselves high growth rates in all areas.
• 45% NPS - such companies are not leaders in their market, but they also do not lose. They have high growth potential and are very attractive to investors.

So, the author of the Reicheld method himself conducted research in more than 400 companies America. The average for small businesses was 16% ... And companies like eBay, Amazon, Rackspace, TD Bank, Harley-Davidson, Charles Schwab, Zappos, Costco, Vanguard, and Dell efficiency rating reached 80% .

Today, the Net Promote Score is regularly considered by many Russian companies, as well as research and analytical agencies, in order to understand the level of loyalty not only for a specific brand, product or service, but for the industry as a whole.

Telecom: how Beeline bridged the catastrophic gap between critics and promoters

Most major players in the telecom market measure the NPS indicator. In some cases, it has become a very important and alarming signal. So, among the operators of the "big three", Beeline had the lowest NPS in 2013. However, thanks to the client-centric strategy announced in 2014, the company managed to raise this indicator and come close to MTS, says Mikhail Slobodin, General Director of VimpelCom.

« Unfortunately, in the 4th quarter of 2013 we recorded a historical anti-record of balance between those who recommend us and those who categorically do not recommend us. The gap with our competitors was simply catastrophic. Now we can talk about it - then we modestly kept silent about it. The gap that we had more than a year ago is simply not allowed in the industry. And this, in fact, was reflected in the churn of our key client base. In 2014, we invested in making the client trust us again and stopped running from us like the devil from incense. And over the past four quarters we have been consistently improving this indicator, for the first time in the history of Vimpelcom over the past five years. Now we are almost on par with MTS, a little bit is left to Megafon , - said Slobodkin in an interview with Vedomosti.

In addition, in March of this year, VimpelCom announced the launch of a system for collecting, analyzing and processing feedback based on the principle NPS, from customers connected to dealerships.

In dealerships, the system works in the same way as in Beeline's own channels - in the form of an SMS poll. Messages come from short numbers and contain 6 questions. The survey arrives at the customer 24 days after the service in the dealership.

The information received from clients forms the basis for solving particular issues and systemic problems, according to the official statement of the VimpelCom company.

Banks: NPS showed a good level of B2B customer loyalty

Most banks and financial institutions analyze customer data on a quarterly basis, including product, payment and loyalty indicators. Among the main indicators is the consumer loyalty index.

Thus, in February 2015, an all-Russian poll by NAFI (National Agency for Financial Research) was conducted, during which 500 executives of small, medium and big business in 8 federal districts of Russia.

He showed that most entrepreneurs are satisfied with the quality of service in their bank, although loyalty is low. Mean NPS in the b2b segment is 26%: exactly so many respondents are satisfied with the work of a credit and financial institution, but are in no hurry to advise others. This indicator indicates the average position... Every second respondent is ready to recommend their main bank ( 50% ). More 24% of respondents are considering an alternative supplier financial services... Most of the promoters were among companies founded in the period from 1991 to 2000 and representatives of medium-sized businesses. In turn, enterprises established in 1990 and earlier are more likely to take a neutral position.

This indicator was positively assessed by the NAFI expert. Lobanova Irina, Head of the Banking Sector Research Department, NAFI:

« The average NPS is considered to be 10-15%, but a lot depends on the specifics of the market.<…> For the financial industry, where interaction with a client is long-term, and communication is carried out through many channels, especially for the segment of legal entities, an average figure of 25-30% can be considered. In the current situation, when the average value of the index for the market is 26%, we can say that the work of most banks in the formation of a product line, promotion of various services and quality control quite effective».

Automotive industry: up to 100 million rubles. spend some manufacturers to increase NPS

In 2015, a strong stratification of the automotive market is expected. Meanwhile, the disaster can be avoided by introducing new business models, according to the magazine "Company".
To save dealers from themselves, the management of the head offices of auto companies took drastic measures, undertaking to change not only the business model of their partners, but also the consciousness of people. Literally by force, foreign concerns are forcing Russian dealers to build relationships with customers in a new way. The main criterion for assessing such relations in the United States and Europe is the NPS index.

So, in November 2014, the agency "Autostat" as part of the study of satisfaction of Russian car owners and dealerships, calculated NPS. The leaders of the rating are brands Mercedes-Benz (70% ) and Land Rover ( 68% ). The TOP-10 of the mass brands includes KIA ( 62% ) and Skoda ( 57% ). Four places in the top ten belong to Japanese brands - Mazda ( 61% ), Subaru ( 60% ), Lexus ( 57% ), and Toyota ( 56% ). Volvo ( 60% ), ranked seventh. Representatives of budget brands were the obvious outsiders of the rating - LADA (5%) and Daewoo (8%).

Now, to raise the NPS rating, some companies, such as Land Rover or Mazda, spend up to 100 million rubles. in year, send independent quality managers to dealers, launch online services for ordering spare parts, where all operations with parts are noted to avoid misinterpretation. Online resources are created personal accounts for users, and clients are assigned “lifelong” managers, like in Volvo, who are personally responsible for this or that repair. As a result, the NPS rating fluctuates in a positive direction.

Electronics: high NPS puts Huawei in the top three

NPS index on a par with such important indicators how brand awareness is measured by many international research agencies including for the analysis and comparison of the largest players in the same industry in different countries the world. Thus, the IPSOS agency in 2014 conducted a survey in 32 countries regarding electronics brands.

According to this study, Huawei's brand awareness increased from 52% in 2013 to 65% in 2014. This means that almost two-thirds of consumers in these countries know the Huawei brand. According to IPSOS, the Chinese vendor's Net Promoter Score has reached 43% , which allowed Huawei to be among the top three brands in this study, behind only Apple and Samsung. Thanks to such strong performance, the Chinese vendor plans to focus on high-end models this year with high profits.

Air Freight: NPS Confirmed the Success of the Budget Pobeda Business Model

The consulting firm Bain & Company, in which the author of the NPS method Reicheld himself worked for many years, today successfully cooperates with many organizations around the world, measuring the level of customer loyalty for them. One of the oldest objects of study is the air transportation sector and its largest players around the world. For example, Aeroflot Group regularly uses the NPS indicator calculated by Bain & Company for brand analysis and quarterly reporting. In recent years, Aeroflot's loyalty index has shown stable growth, but the best NPS indicators today are with its subsidiary of the budget airline Pobeda.

Thus, Pobeda demonstrated a high level of loyalty of its passengers in the first year of operation. The company officially announced this in February 2015 in connection with the transportation of the 100,000th passenger. According to a study by Bain & Company, Pobeda's NPS significantly surpassed the performance of most not only Russian, but also European airlines, making 72% ... Thus, Pobeda's customer loyalty index is even higher than that of Aeroflot itself. Although it is worth noting that Aeroflot's NPS increased in 2014 by 9% compared to the previous year to 67% .

Such a good NPS "Victory" indicator speaks not only of enough high quality service, but also about the demand for low-cost air travel and growth prospects with such a business model. Expansion is already planned. Now the airline's flight map lists 14 cities, but in the 2015 summer schedule it is planned to open new destinations, in total there will be about 20 routes.

Conclusion

Over the past decade, the Net Promoter Score has proven itself as a reliable indicator of business success. Empirical studies have repeatedly shown and confirmed in practice that the NPS of all measures used to measure the success of an enterprise is:

• a leading indicator of business success;
• the most accurate forecast of consumer loyalty in the future;
• the simplest indicator in terms of speed and convenience of measurement.

However, research shows that Net Promote Score is measured less frequently. Thus, in an Oracle study on the implementation of modern effective customer service methods

Most companies are overly focused on increasing customer base and growing profits. However, it is very important to understand the fact that it resembles fishing with a leaky net. It seems that you have managed to "catch" a lot of fish, but as a result you are left with nothing.

Customer retention is not a goal, unlike customer loyalty to the company. The problem is that this indicator is very difficult to measure, as it is not quantitative. Fortunately, there is a framework to help you meet customer needs and build lasting and rewarding relationships with them. Plus, you can predict their loyalty to your brand.

In this article, we will discuss the basic concepts associated with such metric as the consumer loyalty index (NPS, Net Promoter Score). You will learn how a simple one-question survey can help you determine the satisfaction level of your customers. You will learn how to start using and then apply this metric in your marketing campaigns.

Loyalty measurement methodology

The founder of the NPS measurement technique is Frederick Reicheld. His research was published in the Harvard Business Review in an article titled "One Number You need to Grow." In it, Reicheld criticized the traditional customer satisfaction surveys. He stated that all of them do not allow "keeping an eye on the pulse" and assessing how happy customers are.

As a result, Reicheld and his colleagues developed a simplified schema that linked consumer responses and behavior.

The measurement of the consumer loyalty index is based on the belief that loyalty is nothing more than a person's willingness to contact the company again and, more importantly, to recommend a product or company to their friends. This indicator is very simple to determine. We will tell you about this now.

How to conduct a survey

So, NPS is an index that measures a consumer's desire to recommend your company's products or services to their friends. To calculate it, you need to ask customers two questions:

1. On a scale from 1 to 10, how likely are you to recommend a product (service) of our company to your friends or colleagues?
2. What exactly influenced your answer?

Next, you need to complete a survey and send it to your customers. Usually, such questionnaires are sent by e-mail, via SMS, offered in the form or asked by phone. Ideally, the survey should be completed in less than 24 hours.

After your customers have answered both questions, you will need to categorize them into the following categories based on their rating:

• 9-10: Brand Promoters. They value your company's products and tend to recommend them to their friends and acquaintances. They also repeat purchases frequently. such customers represent the greatest value.
• 7-8: Neutral consumers (Passives). They do not spread negative reviews about your company, but if someone makes them more profitable proposition - will refuse your services. These clients don't often recommend you to their friends.
• 0-6: Detractors. They are unhappy with the quality of your company's products or services and want to ruin your reputation by spreading negative reviews.

How to calculate NPS?

Based on audience segmentation data (see previous section), the customer loyalty index can be calculated using a simple formula:

NPS \u003d (% Brand Loyalists) - (% Critics)

The value you get will be in the range from -100 to 100. If the consumer loyalty index is 100, this means that absolutely all of your customers are fans of your brand ( best scenario). If this indicator is -100, then on the contrary, all your customers criticize you (worst case scenario).

Why is it worth tracking the consumer loyalty index?

Periodic monitoring of the consumer loyalty index is necessary, since this indicator:

• easy to understand - this system is very easy to understand and adapt for your company;
• easy to calculate - the survey is very short, and your customers can quickly and easily answer the proposed questions;
• gives practical feedback
• helps to identify the target audience segment (if you combine the information received with);
• will allow you to develop a plan for improving products or services;
• will help to build a "cult of the consumer" in your company - each department will be focused on building long and fruitful relationships with clients;
• gives you a competitive advantage - the conclusions drawn from the NPS analysis will allow you to make decisions quickly, while your competitors will have to spend several months on it;
• is available for any business - conducting such surveys will not greatly affect the budget, and you will be able to “keep your finger on the pulse” of consumer sentiment.

Using the NPS indicator for company development

1. Steady growth and customer retention

• Extensive research has shown that NPS is one of the top growth indicators. If it is larger than the competition, it means that your company has a larger market share.
• According to a study by Gartner, 65% of startups already have a customer base. It costs 5x more to attract new customers than to retain old ones. The Customer Loyalty Score is an affordable measure of customer satisfaction and retention.
• The NPS indicator can be used as a development metric so that the current growth of the company becomes sustainable.

2. Product sales management

• The customer satisfaction index can be used to make decisions about a company's product itself.
• NPS allows you to properly prioritize based on. They can get feedback very quickly and make changes to the marketing process.

3. Marketing

• Research by Verizon has shown that 85% of new customers come to small businesses because of. Keeping your NPS high will help you attract more buyers without spending money on advertising and marketing campaigns.
• The Consumer Loyalty Index helps marketers measure consumer sentiment and opinions, and then provide feedback to all team members. Thus, all departments of the company will be able to work more harmoniously in order to achieve one common goal - customer satisfaction.
• NPS, combined with analytics tools, can help you predict consumer behavior and create so-called behavioral patterns.

4. Employee potential management

• A customer loyalty score can help you determine the level of satisfaction of your employees. This is especially important for companies operating in the service sector.
• NPS can also be used to select a new vector of corporate culture. In addition, using this indicator, you can get the opinion of your employees on the new corporate policy.

5. General KPIs and reporting

• You can use NPS as the only metric for customer satisfaction. To do this, the indicator needs to be measured on an ongoing basis and made quarterly reports. This will help you gain meaningful insights and build a long-term roadmap for your company.
• If we link NPS with financial statements, then we can draw a conclusion about the general state of the company's development. For example, if profits rise and NPS declines, then this is an alarming sign regarding long-term development prospects.

6. Advantages of the consumer loyalty index

• Increased revenue per customer: Brand loyalists tend to spend more on a company's products and services than the average customer.
• Reduced recurring costs: Brand loyalists are tolerant and tolerant of problems in the company, so they are less likely to complain. This helps reduce maintenance costs. In addition, loyal customers reduce as they spread positive reviews.
• Reduce churn: By reducing the number of neutral consumers and critics, you can reduce churn.
• Motivation for employees: all departments of the company will work together to achieve a common goal.

Increasing customer lifecycle value

Only 14% of customers stop using the company's services because they are not satisfied with the quality of service or the product itself. 69% of consumers stop contacting a company because they feel they have been forgotten.

Most unsatisfied customers will never come and complain directly. They will simply leave silently and then start leaving negative reviews on the web. This is why it is so important to constantly “connect” with your customers.

Constantly measuring NPS will allow you to identify those customers who:

• are going to refuse the services of the company;
• ready to act as brand advocates;
• see any flaws in your product or services, but don't talk about them.

With this valuable information, you can prevent.

When to conduct a survey?

Often, the effectiveness of an NPS campaign does not depend on how you ask questions, but on when you ask them. Here are some of the "right things":

1. After a potential client has taken advantage of the free trial period (Post Free Trial). If the trial period has expired and the customer does not want to purchase the paid version, then this is an indicator that he is interested, but not yet sufficiently involved in the purchase process. Why not ask him for feedback to figure out what went wrong.

2. Before the client finally cancels the company's services (Exit Survey). Price is a repulsive factor for a person only when he does not see the value of the product. If a client decides to end their relationship with the company after using its services for a while, it means that you are doing something wrong. Instead of just letting him go, you can re-engage him by asking him to take a survey. Even if this client leaves anyway, you can draw valuable lessons.

Criteria for assessing the consumer loyalty index

You can't draw objective conclusions just by looking at customer loyalty metrics. The position of the company in the chosen business area must be taken into account. For example, a large store may have a NPS of 30, but it will still be the worst in the market. At the same time, the NPS of the telecommunications company will be 32, and it will be the leader among competitors.

What factors influence the NPS assessment criteria? How do you know if your customer loyalty rate is good? First of all, there are three factors that influence the criteria for assessing the consumer loyalty index:

1. Level of competition

If you are in a highly competitive industry such as insurance, banking, or healthcare, the average NPS is considered normal. But if your company only has a small segment of the market (for example, electric cars or wireless headphones), then you need to make sure that your NPS is high enough. This will be an indicator that your offer is unique and that your customers are positive about your brand.

Optimal NPS indicators for different business areas: banking (0), auto insurance (22), health and life insurance (27), airlines (36), tourism (38), hotels (43), online shopping (45), the Internet -services (48).

2. Tolerance

Customer tolerance is another key factor in determining the NPS assessment criteria. This is due to the fact that people are categorical about the quality of the product or services that they use regularly.

To visualize how this factor affects NPS, it is necessary to give an example. Verizon's consumer loyalty index is 38, which may seem like a very average value, but the company is one of the leading companies in the market. For comparison, their competitors (AT&T and MediaCom) have scores of 15 and 22. This low score is not due to the fact that the company provides insufficient quality services. This means that these firms operate in a highly competitive environment where customers are absolutely not ready to tolerate even minor “errors” in the quality of service.

3. Obstacles

Usually, a person cannot afford to improve (“upgrade”) the purchased product or start using the services of another company without certain financial losses. Thus, in order to appear consistent in their decisions, the client prefers to remain committed to the same brand.

SaaS companies face this problem all the time. To become a client of one of these firms, you need to deposit a certain amount, so it is very difficult for a business to retain its clients and maintain their loyalty. In this regard, the NPS indicator for SaaS companies is kept at “below average” levels.

What is a good NPS metric?

So, there is no quantitative indicator that can be called good, as this value varies depending on what kind of business you are in. But there are several questions that by asking yourself, you can understand how high your customer loyalty index is:

1. Is my NPS higher than direct competitors? If so, this is a good indicator. However, this is not enough to consider your business successful.
2. Is my NPS growing? If in 3-6 months the consumer loyalty index has grown, then this is a good indicator.
3. Is my NPS above zero? If your NPS is -50, and this is higher than your competitors, then don't jump to conclusions. This low NPS is a sign that your customers are not satisfied.

It must be remembered that the consumer loyalty index should not be taken literally. Most companies are simply obsessed with growth performance and do everything possible and impossible to make performance indicators grow. NPS is not a quantitative metric. Rather, it is a qualitative indicator that gives you food for thought.

Overall, while the NPS claims to be the new standard for measuring customer satisfaction and loyalty, it has come under constant criticism for its simplicity. Some experts argue that the index provides an inaccurate picture of how satisfied a company's customers are, for example, highlighting the fact that companies with the same NPS may have different percentages of adherents, neutral consumers and critics. Therefore, entrepreneurs need to focus not on the indicator itself, but on what those numbers tell them.

What to do after measuring NPS

This section will summarize the goals of measuring the loyalty index, and will also close the loop for receiving feedback from customers. This inclusive strategy will keep you growing and keeping an eye on customer churn.

1. Critics: make personal contact

According to a study by Lee Resources, 70% of clients are willing to re-use the company's services if the unpleasant situation is resolved in their favor. Your goal here is to show your customers that you care.

Most companies believe that the category of customers called "critics" cannot be convinced. However, this is not at all the case. In fact, those customers who want to end their relationship with the company and are spreading negative reviews are future adherents of your brand. They just want you to pay attention to them and solve their problem.

Perhaps emails with questions about possible problems and how to solve them, for example:

• What would you like to do with our product but fail?
• Could you formulate an ideal solution to your problem that would completely satisfy you?
• If you had a magic wand, what changes would you make to the product?

After receiving feedback, you can take the following steps to retain customers:

• provide them with instructions (in the event that your product has the desired function);
• extend the trial period and give access to premium features;
• offer some third party service to help solve their problem.

By proposing solutions to problems, you can turn critics into loyalists of your brand.

2. Passive consumers: engage before they leave

Passive consumers are a very interesting category of customers: they don't adore your product, but they don't hate it either. It seems that they are just waiting for something good or bad to happen in order to make a concrete decision.

However, passive consumers are reluctant to answer open-ended questions and give company owners feedback. For example, Zendesk found that only 37% of this customer segment responded to a survey. While 50% of critics and 55% of the company's supporters are happy to share their opinion about the services of the company.

It seems like passive consumers can't damage your brand's reputation. But they, like critics, are more likely to refuse your services. Here are the steps you can take to retain these customers:

• By offering discounts or upgrades, you can re-engage passive consumers in the buying cycle.
• Send them introductory user guides: They may not be involved in the buying process due to a poor first impression that never returns them to the site. You can periodically send them various brochures telling them about the latest innovations or new features of your product.

3. Brand loyalists: show your gratitude

Brand loyalists are, without a doubt, ideal customers for any company. But most firms needlessly take them for granted. They make no attempt to reward or thank the customers who bring them the most income.

Undoubtedly, gratitude will help strengthen your relationship with this category of buyers, and will also contribute to the development of the company.
Here's what you can do to do this:

According to statistics, the average share of people responding to an NPS survey is 60%. Thus, each company will have at least 40% of those customers who did not answer the questionnaire. Surprisingly, according to several studies, this category of customers is more likely than others to refuse your company's services in the future.

In fact, you have a better chance of re-engaging the critic than convincing a customer who did not take the survey. If you do not take any action, then usually 40-70% of these people stop contacting the company within the next 6 months.

The only way to interest them is the methods described above. The same tactics will work for them as for critics and indifferent consumers.

Conclusion

Gathering information about how customers feel about your brand is integral to your long-term growth prospects. Of course, the consumer loyalty index has its drawbacks, but they can be overcome by actively implementing effective metrics.

Any serious business is puzzled by the question of whether it is popular on consumer market its products. And if popularity is present, then how stable it is.

Of course, the high popularity will be obvious, since it is read from quantitative indicators. Massive sales and big profits are an excellent litmus test of the popularity of a company's product. But, not every business can boast of high sales.

Therefore, the feedback from consumers is so relevant, clarifying what their attitude to the company's products is.

Loyalty level measurement using the NPS method

There are a number of techniques that can be used to get some kind of feedback from customers, from direct questions about product or service quality to tracking consumer choices from a line of competitive offerings. Some techniques are easier to use, while others are more complex but more informative.

Recently, there has been a lot of controversy around the method Net Promoter Score (NPS), which aims to measure the level of customer loyalty. Net Promoter Score method was developed by Fred Reichelin 2003 it was presented as a very simple and fast way to identify customer loyalty. Before talking about the pros and cons of the claimed marketing tool, let's dwell on the very essence of the technique.

According to Reicheld, customer loyalty is directly related to their willingness to recommend certain products of the company in their environment.

Therefore, customer attitudes are measured using the Net Promoter Score methodology. on a single question:

This question is supposed to be asked to those real customers who have already used the product and were able to assess its strengths and weaknesses. Potential clients were excluded from the sample of respondents.

The client is asked to answer the key question on a scale from 0 to 10, where an unconditionally positive answer corresponds to a maximum of 10 points, and a categorical “definitely not going to recommend” means 0 points.

Further, based on the answers, all respondents are divided into three categories:
Loyal customers, whose response is expressed by 9 and 10 points, are a group of promoters.
Uncertain consumers who gave 7 - 8 points are a group of passive customers.
Dissatisfied customers who rate their willingness to recommend this company or its products from 0 to 6 points, - a group of critics.

The NPS technique includes and ancillary question,which brings out , “What is the basis for the assessment”.

This open-ended question is intended to clarify the bottlenecks that are holding back brand loyalty and provides insight into product and company strengths.

However, the answers to the auxiliary question do not affect the quantitative measurements of loyalty, but are used only in qualitative analysis.

Further quantitative analysis assumes the simplest calculation of the NPS index - the loyalty index. To do this, the severity of the group of promoters and the group of critics is determined in percent and the difference is determined by subtracting the second indicator from the first.

The result is limited to the range from +100 to -100. Obviously, the NPS index will be equal to +100 only if absolutely all respondents turned out to be loyal customers, and there were no passive or critics in the sample. Similarly, the NPS index will take a maximum negative value of -100 if none of the customers is ready to recommend the company's products, and there were no ratings higher than 6 in the answers to the main question of the methodology.

What information does the NPS index provide?

An index with a plus sign indicates the prevalence of loyal customers over critics. Therefore, there is a possibility that new clients will contact the company based on the recommendations. The higher the index, the more guarantees that the influx of clients will take place.
If the index is equal to 0 or takes a negative value, the situation becomes critical, since we expect not so much an influx of customers as an outflow of customers, based on possible negative reviews and the choice of competitive products.

Strengths and weaknesses of the NPS methodology

While the NPS technique has been popular abroad for more than ten years, there is a lot of criticism in the domestic business environment. Domestic marketing gurus emphasize the artificiality of the NPS index, since it is calculated based on only two categories of respondents - promoters and critics, completely ignoring passive customers.

Another vulnerability is that companies with different shares of critics and promoters may share the same NPS index.

Let us illustrate this with an example. Company A has 30% loyal customers and 10% critics. Based on the algorithms of the methodology, its loyalty index is 20. Now suppose that company B has 20% adherents of its products and no criticism. Obviously, its NPS index will also be 20.

Based on the figures obtained, it should be assumed that companies A and B have similar prospects. But this conclusion contradicts the very same NPS methodology, according to which the presence of critics increases the risk of anti-advertising, and therefore, the likelihood of customer churn increases. In our example, this risk will be higher for company A.

Therefore, the loyalty index cannot be regarded as some kind of independent characteristic. The NPS index can take its own characteristics of interpretation.

Domestic marketers criticize the very formulation of the main question of the methodology, emphasizing that people are generally not inclined to give recommendations, so the survey will fail.
As you can see, critics give strong reasons for the weaknesses of the NPS methodology. But is everything so clear? We will give our arguments not for the sake of a dispute with venerable marketing specialists, but for the sake of taking advantage of a technique popular in the West.

What advantages do we see in using the Net Promoter Score:

1. The wording of the question to be asked to clients.
All the same question that has been criticized has a positive psychological aspect. Namely, the words "What is the likelihood that you ..." removes unnecessary responsibility from the respondent. The client mentally weighs, could he recommend this product to anyone, and quite sincerely answers, because “could” is not the same as “I will recommend”. Therefore, the array of answers received using the NPS methodology is very valuable information for business.

2. The NPS index, with all its superficial calculations, shows a trend, which develops on the market for a specific product. A kind of thermometer that records the state. Yes, knowing the business loyalty index will not improve, just as measuring the temperature will not cure the patient. This is just a diagnostic step that motivates the search for an effective treatment. But without this step, treatment can be unforgivably late.

3. Ease of implementation of the NPS methodology.
You can search the most effective tool to measure the same customer commitment, or you can use the NPS technique, which is not ideal, but takes a cut of certain aspects of the business. As you know, the best can turn out to be the enemy of the good, because in the pursuit of the best, chances for a timely correction of the situation are often missed.

The listed advantages, whether other positive aspects are appreciated in this method by foreign companies, however, the NPS index is actively used in different areas... For example, in the banking sector, the loyalty index is considered to be +11. Considering different markets, the standard customer loyalty ratio ranges from +5 to +15.

As an example to follow, they call apple, the loyalty index of which reaches +50.

Is it possible to automate the collection of customer feedback? Automation of collecting opinions from clients (for calculating NPS).

An analogue of NPS in domestic marketing

A similar technology for identifying customer loyalty is used by some domestic companies. This is most often seen in banks and the service industry. At customer service points, stacks of pictures are placed on the counters, which depict a cheerful or sad smile. It is assumed that a satisfied customer will take a picture with a cheerful emoticon and drop it into a special box. Well, and accordingly, a visitor dissatisfied with the service will come. This is nothing more than identifying loyal customers and critics.

This method could be useful for any service-oriented company. By determining the difference between the number of satisfied and disappointed customers at a given frequency, the company can track the attitude of customers to its product and the dynamics of this relationship.

If there is a trend towards an increase in critics, the next step will be effective: ask customers to answer the question "What does not suit you in service?" or "What would you like to improve in the company?" The responses received are key to where the company needs to go to increase customer loyalty.

In conclusion, we note that the NPS methodology can be an effective basis for the development of its own exclusive tool for measuring customer loyalty, as domestic banks demonstrate. But in order to develop your own version, it makes sense to use the NPS standard, feel the good points of this technique and replace those that are unsuitable for your business.

I will also definitely add an important nuance - whatever you use - the dynamics of the indicator and its relationship with business results are important. Any program to increase loyalty should be assessed in this way - by the dynamics of indicators (for example, NPS) and the growth of sales, the flow of calls, and changes in customer churn.

For the first time, twelve years ago, customer loyalty index (NPS, Net Promoter Score) was described by Frederick Reicheld in the Harvard Business Review.

The method itself is simple - the company asks customers to answer just one question: "What is the likelihood that you will recommend us to your friends and colleagues?" on a 10-point scale. Answer "0" means "in no case", "10 points" - "I definitely recommend". On the basis of the ratings obtained, consumers are divided into three groups: 9-10 points are supporters, 7-8 points are those who do not care, and 0-6 points are critics. All shares are calculated as a percentage.

The customer loyalty index is the difference between the shares of supporters and critics. Sometimes the NPS can even be negative. In the West, they are used to measuring NPS. The one who has the bigger one is the one who satisfies the customers better. Those with less clearly do not want to work on themselves.

• Customer Loyalty Program: Examples and Tips for Business

The client is authorized to declare

Zappos, an online clothing, footwear and accessory store bought by Amazon six years ago, has the ability to listen like no other. One day, his employee answered a client's questions for five hours straight. He could not decide whether the boots fit him or not, or it is better to take moccasins, although the sneakers look prettier. Any Russian store will hang up after 10 minutes of such doubts. But Zappos appreciates every customer, even if they are a bore, and they never measure the average call time.

At Microsoft, it's the same story: everything is for the customer. In the company, a whole department is engaged in providing feedback to the audience. More than 300 specialists in various offices around the world ask consumers whether they are ready to recommend a product line to their friends, and then, based on the answers, calculate the customer loyalty index - NPS. In the West, this indicator is like a barometer: it determines the KPI of the entire corporation and the size of the salary of employees depends on the NPS.

Advantages and disadvantages of calculating the customer loyalty index

The main advantage of the customer loyalty index is its simplicity and availability for any company. All questions asked to clients are precise and specific. It doesn't take long for buyers to answer them. But, despite its simplicity, this method is very informative, because it allows you to know exactly whether customers are happy with your work.

Marketing experts believe there is a drawback to the method. It lies in one-sidedness, since in the course of research information is obtained from supporters and critics. At the same time, the overwhelming majority of buyers are not included in either the first or the second group.

Determining the customer loyalty index allows you to objectively assess the efficiency of your business. According to experts, when developing a marketing campaign and forming important decisions in the management of a company, one should rely not only on this method, but also on the results of larger and deeper studies.

At the same time, loyalty indicators should be calculated regularly, with a certain frequency. This allows you to learn about changes in the attitude of customers to the brand and, if necessary, make the right decisions in management urgently.

Which companies regularly use the customer loyalty index

Companies around the world use the NPS (Net Promoter Score) index. These are both small startups and multinational corporations. The reasons for such widespread use of NPS are simple - simple calculations, prompt collection of information, direct correlation with income and comparability with competitors in the field of activity. All this provides the convenience in using the technique. Based on the calculations, it is convenient to draw a conclusion in which direction the company is moving, make important management decisions, calculate KPIs, open or close entire areas, pay or cut bonuses to employees.

Almost everyone uses NPS in their work large companies: Amazon, Apple, Microsoft, Zappos, Dell, Walmart, Procter & Gamble, Sony, Costco and others. In a way, NPS has become a kind of “de facto standard”. Amazon's NPS is about 70, Apple - 72, Costco - 77, and the little-known financial and investment company USAA - 87.

Russian companies operating in the retail, insurance, telecommunications, banking, restaurant and hospitality, air and railway transportation, also actively use the index. Among them are MTS, MegaFon, Beeline, Ingosstrakh, Rosgosstrakh, Alfa-Bank, Aeroflot, etc.

What exactly will the customer loyalty index give you?

1. Stable development and customer retention

Extensive research has shown that NPS is one of the main indicators of growth. If this indicator outperforms the competition, then your company has the most significant market share.

Research by Gartmer has shown that 65% of startups already have an established customer base. It costs five times more to attract new customers than to retain old ones. Thanks to the loyalty index, it is possible to objectively assess how satisfied customers are with the company's work and how many customers remain with it after the first interaction.

The loyalty index can be used as a development method to turn the current growth of a company into sustainable growth.

2. Sales management of goods

Based on the NPS indicator, you can make decisions about the products of the enterprise itself.

The loyalty index allows you to set the right priorities based on customer needs. It makes it easier to get feedback, thanks to which the order of sales of goods is quickly changed.

3. Marketing

Based on Verizon research, 85% of new customers learn about the brand through word of mouth. If your NPS scores are high, you won't have to spend a lot on advertising and marketing campaigns. Clients will come by themselves.

With NPS, marketers can measure customer attitudes and opinions, and then provide feedback to all company staff. This ensures the well-coordinated work of all departments of the company in achieving a common goal - meeting the needs of customers.

If you use the customer loyalty index together with analytical tools, you can predict how customers will behave, that is, create so-called behavioral patterns.

4. Personnel potential management

NPS allows you to measure how satisfied your employees are. This is especially true for businesses operating in the service sector.

The customer loyalty index can be used to choose a new vector of corporate culture. This indicator also allows you to find out what the staff thinks about the new corporate policy.

5. General KPIs and reporting

NPS metrics can be used as the only metric for customer satisfaction. To do this, you need to regularly calculate the loyalty index and keep quarterly reports. This will allow you to get meaningful insights and make long-term business development plans.

If you correlate NPS with financial reporting, you can assess how the company is developing. For example, with an increase in profit and a decrease in NPS, it is worth worrying about the long-term prospects for development.

How to poll customers to calculate NPS

Many companies install tablets in their service offices and points of sale so that customers can evaluate the quality of work. At the same time, companies receive NPS (customer loyalty index). Calculation examples vary. For surveys, special applications are often used that show answer options on the screen of a mobile device and save information on customer ratings. The tablet running the application is installed on special stands with a holder that protects the device from theft.

Banks and insurance companies place cards with multi-colored “smileys” on the customer service counters. If the client is completely satisfied with the service, he takes a green card. Yellow emoticon means neutral attitude to the service, red - dissatisfaction with the quality of work. At the exit, customers are offered to put the cards in a special box.

To obtain a loyalty index, online stores use special plugins, if the resource engine is some widespread "boxed" CMS, or if the firm's staff is working on the revision. Some people use third-party web services that offer to install an NPS meter on the company's website. Thanks to such a counter, it is convenient to conduct surveys and receive reports on their results.

Collecting reviews yourself has certain drawbacks. With this method of obtaining information, it is possible to incorrectly design the survey form and implement it as an intrusive pop-under banner that pops up when entering the site. Such tools annoy users, and many people mistake them for ads. That is why they unconsciously try to dismiss unnecessary information, often without even delving into the essence.

You can collect customer opinions through phone calls, e-mail newsletters and SMS if you have a contact database. Call center operators usually call customers some time after the sale of a product or the provision of a service. They also use systems of pre-recorded voice-messages IVR (Interactive Voice Response), which communicate with customers without operator participation. Such methods are often used by large online stores and mobile operators, who have contact information for their customers.

The disadvantage of getting information via phone calls or e-mails is that a negative customer may simply refuse to participate in the survey after receiving a questionnaire by e-mail or drop the call, as they treat the brand badly. As a result, he will not express his opinion and will not become a respondent. At the same time, even if we are talking about a brand supporter, he can also ignore the information if the letter accidentally ends up in the spam folder in his mail. That is, the results of the survey are largely influenced by technical problems and incorrect information.

Many organizations use not only the methods listed above, but also additionally expand the functionality of their CRM systems in order to successfully solve tasks such as collecting information and calculating the customer loyalty index. But here it is worth emphasizing that not all "box" CRM systems can be modified in this way without the help of third-party key developers.

How to interpret the customer loyalty index

The NPS indicator shows how customers relate to the company, what its reputation is in the eyes of the audience. When calculating the loyalty index, firms want to know if everything is normal and what needs to be worked on. The NPS method has general rule, according to which the indicator should not be negative.

If the result of the calculations is positive, then there are still more supporters than critics. Accordingly, while expanding the audience, companies should work primarily on loyalty so that satisfied customers bring new people with them.

If the result is zero or negative, then there are more critics than supporters. Consequently, there are no prerequisites for expanding the audience and an outflow of buyers due to the company's low rating is not excluded.

How to tell if your NPS (customer loyalty criterion) is satisfactory

It is impossible to objectively assess the position of a business based on indicators alone. It should take into account what place the company occupies in its field. For example, a large store may have a customer loyalty index of 30, while being ranked lowest among competitors. At the same time, the telecommunications company may have an index of 32, and it will be the industry leader.

What determines the criteria for assessing the customer loyalty index? How do you know if your NPS is positive? Let's consider three factors that influence the criteria for evaluating the customer loyalty index.

Competition level

The main factor is the number of competitors in the business and the uniqueness of your selling proposition. If you work in the banking, insurance, or healthcare industry, average is the norm. However, if there are not so many competitors in your segment (for example, you produce wireless headphones or electric cars), the index should be quite high. This will indicate the uniqueness of your proposal and a positive perception of the brand by consumers.

The figure below provides an overview of the optimal NPS metrics for various business industries.

Tolerance

Another factor that affects the criteria for evaluating NPS is customer tolerance. This is due to the fact that consumers are very categorical about the quality of work or services that they regularly use.

Here's an example to help you better understand how customer tolerance affects NPS. The Vid company has an indicator of 38. At first glance, the figure is average. Moreover, the company is one of the market leaders. The indicators of its competitors, firms A and B, are 15 and 22. The low index of the Vid company is explained not by the low quality of work. This means that it operates in an area with very high competition, in which consumers do not close their eyes even to insignificant gaps in service.

Obstacles

As a rule, in order to improve an already purchased product or switch to the services of another firm, the client must incur certain financial costs. In order to appear consistent in decisions, the consumer often remains loyal to the same brand.

These are the kinds of problems that SaaS companies have on a regular basis. According to the conditions, a person must first deposit a certain amount and only then become a full-fledged client. This makes it difficult for organizations in the industry to retain customers and maintain customer loyalty. This is why SaaS Enterprise Customer Loyalty Index is below average.

What is a good NPS score?

It is impossible to give an exact number. It all depends on the area of \u200b\u200byour activity. However, thanks to the questions below, you can estimate how high your score is.

1. Does my NPS outperform my direct competitors? If so, the company is doing well. But to talk about the success of the business, this is not enough.
2. Is my NPS increasing? If NPS is increasing after 3-6 months, this is a good trend.
3. Is my NPS above zero? If it is -40 and exceeds the indicator of competitors, do not jump to conclusions. This figure directly indicates the dissatisfaction of your customers.

It should be understood that NPS is not literally scored. Many companies are overly concerned with growth performance and are trying every possible way to improve it. At the same time, the customer loyalty index is not a quantitative metric. Rather, it is a qualitative indicator that allows you to objectively assess the state of the business.

NPS aims to be the new standard for measuring customer loyalty, but it gets criticized for its simplicity. According to a number of experts, NPS cannot provide a clear indication of customer satisfaction. Experts believe that firms with the same NPS score may have a different number of supporters, neutral clients and critics. In this regard, businessmen should pay attention not to numbers, but to what the indicator indicates.

How to improve your customer loyalty index

How to reach critics

About 70% of consumers will again agree to cooperate with the company if it resolves the dispute in their favor and eliminates the unpleasant aftertaste. With dissatisfied customers, you need to maintain feedback, that is, establish a relationship of trust and demonstrate your interest in cooperation. Many companies are mistaken in thinking that critics cannot turn into customers.

There are ways to solve consumer problems:

• Providing a free manual for the use of products - for this, a download button is installed on the site.
• Renewing your free trial and unlocking additional features.
• Offer to use the services of third-party companies that can support your customers (even if these companies are not associated with your products).

If you actively try to solve people's problems, it is likely that critics will turn into supporters who will gladly talk about the actions you have taken on your part to increase their loyalty (for example, if you made some product changes).

How to reach neutrals

Brand neutral customers are an interesting group. They don’t like your product, but they don’t feel negative about it either. It may seem that they are waiting for something good or bad in order to finally decide. Neutral customers usually don't give any feedback or get in touch. That is why it is quite difficult to work with them. It was possible to determine that only 37% of consumers from the neutral segment are ready for feedback.

At first glance, neutrals cannot harm a company's reputation. But this opinion is wrong. There are almost as many clients in this segment as critics and supporters. At the same time, critics act decisively, while neutrals are in search of the best opportunities for themselves. They are able to stay close to the brand for a long time, but if they are not involved, their number will increase.

Here are the steps you can take to create feedback with neutrals:

1. Offer them discounts or improve service. Neutrals can be re-involved provided that they receive exclusive discounts and improve the quality of service.
2. Make an e-mail newsletter, indicating the updates in the range. Probably, the customers of the neutral group were not interested in the product, since the first impression was negative. They had no desire to visit your site again and get acquainted with the new products. Regular mailing of notifications about innovations and new features will increase the loyalty of neutrals.

How to thank the promoters»

"Promoters" are the most profitable segment. However, many businesses are doing the wrong thing when they ignore their presence, taking it for granted. That is, the companies do not express their gratitude enough or at all. At the same time, they do not seek to find out the opinion of the "promoters" about the quality of the service, what exactly they like about the brand, and rely on this information for further development. Companies that pay due attention to supporters and express their gratitude for their feedback set the stage for further cooperation and increase their income.

You can get feedback from "promoters" if:

How to reach unanswered

Let's omit three categories of clients - “promoters”, neutrals and critics, and consider another segment, the most numerous. These are people who did not take part in the survey. Considering that 60% of respondents participate in the customer loyalty index survey, it can be determined that at least 40% of buyers will not respond. That is, there are even more of those who ignored the poll than critics and neutrals.

In practice, it is easier to recruit a critic again than a client who did not respond. The only way to attract such a consumer is to reach out to him. The NPS score is independent of the people who did not complete the survey. However, they can negatively affect the further development and income of the enterprise.

Why is the customer loyalty index negative?

Companies with high NPS:

• produce reliable products;
• offer a decent level of service;
• provide unique offers.

But now we will look at the “leaders” in customer churn. It will be interesting to compare the mistakes of the companies and understand why customers turn away from them.

Complex billing

Brand is at the forefront of Apple's advertising campaigns. This is probably why the company became the leader in the loyalty rating in 2013. Apple's score is 65 for the iPad, 70 for the iPhone, and 76 for the laptop line. The outsider was McAfee with an NPS of 2. Other antivirus programs, such as Kaspersky Lab, had a fairly high customer loyalty index.

The McAfee score is a measure of customer service quality, not the big picture. Complaints from users against McAfee are identical to those against brands with low loyalty. For six years now, customers have been complaining about automatic debiting of funds from bank cards. It's not safe to say that McAfee is doing the same, but often companies with low customer loyalty indexes conduct hidden billing and aggressive sales.

Brands with low NPS often practice "bounce billing" - automatic subscription billing before the fact of failure. After the conclusion of the contract, the consumer automatically receives invoices until the moment he himself refuses the product or service.

Failure billing is not such a bad move. Well-known world companies resort to it. For example, Netflix with a high customer loyalty index offers a free demo version that automatically switches to a paid subscription. But, as a rule, brands with good loyalty indicators do not create additional inconvenience to users. In their case, it is clear at what time and in what order the invoice is issued. Conversely, brands with low ratings do not have a direct dialogue with the customer. Their billing is incomprehensible and non-transparent.

If recurring charges, such as monthly subscriptions, are a prerequisite for your business's existence, consider paying transparency. If billing is confusing and aggressive, customers will leave you.

Weak customer support

Companies with low NPS do not serve customers well enough. In the 2015 Temkin Group NPS Benchmark, Comcast TV received the lowest score. The company's customer loyalty index was -17. In the US Senate, where plans to improve the brand's image were discussed, it was said about poor support for Comcast TV. This is not to say that the company has poor service. But it can be safely called disrespectful. The staff were targeted at support as cold selling. The buyers wanted support and help, but they didn't. The company still retained some of its customers, but earned bad reputation... Many users left and never came back.

Consumer mood

In 2007, most of the consumers were satisfied with their banks. The average loyalty score for financial brands was 30 points, which is not bad. But because of the global financial crisis, everything has changed, and people have dramatically changed their views. Initially, the customer loyalty index was 40, but in two years it fell to 22. The NPS of credit card providers dropped to 11 from 27.

The changes in the industries were not so dramatic. However, due to general market trends, people's attitudes and attitudes have changed. Of course, a poor-quality product and poor service reduce the customer loyalty index. However, public opinion also plays an important role in the formation of the NPS. If a low-quality service is connected with market trends, the further outcome of the business is obvious, and it is almost impossible to influence this process.

After the crisis passed, customers again became satisfied with banking products. but banking organizations, involved in scandals, failed to restore their positions. HSBC bank's NPS in the current year was -24. Record-breaking poor service has been the cause of many scandals, and it is because of this that the company was unable to regain its lost reputation.

User experience comes first

To successfully overcome market trends, it is enough to issue a good product and offer quality service. A bad customer experience in a questionable market is a direct path to a low loyalty index.

It is not enough to offer the consumer what he wants and needs. It is essential to ensure a superior customer experience. In this regard, the McDonald's brand is not always successful. Despite his worldwide fame, his US NPS is only -8. You can compare the brand with its direct competitor - KFC. His loyalty index is also far from ideal, but still positive. And the favorite American fast food chain Pizza Hut has an index of 78.

Brand awareness

A good customer loyalty index is something that all companies should strive for. But if loyalty is not related to performance, it doesn't matter. Examples include Uber and Lyft. The functions of the brands are almost the same, and the drivers often work for both firms. However, given the obvious general parameters, the customer loyalty index for Uber is 37 points, and for Lyft - only 9. The reason is the geography of the companies. Uber is featured more in the press and covers a wider area than Lyft, which operates only in the US. The level of customer awareness of a brand also affects loyalty.

Insurance in the USA is a mature industry. The country is highly competitive and companies are seriously competing for customers. Customer satisfaction with the quality of goods and services is a guarantee of high earnings for the company in the future. Companies that have relied on short term, sank in the NPS rankings. This was the case with CIGNA, a life insurance brand. The customer loyalty index of this company is now 1. The company got involved in a scandal when it refused to recognize the client's disability, and since 2009 has been under government supervision.

Let's compare GIGNA to their competitor GoMedigap. The customer loyalty index of this company is 93 points. Obviously, the problem is not in the sphere (as was the case with the earlier example with banks), but in the fact that the brand refused to provide a previously advertised and even sold service.

Closing the feedback loop

United was named the worst air carrier in the United States in 2014. The customer loyalty index was 10 points. In comparison with competitors, this situation can be called catastrophic. Southwest's NPS is 62, JetBlue is 56, Virgin America is 48.

Over the years, passengers have complained about United's operations, including flight cancellations and delays, poor food quality, baggage delivery and the condition of aircraft. In 2012, the company accounted for 43% of complaints. The remaining 57% is for other American carriers. At the same time, United monitors NPS, as do its competitors. But why is the difference so significant?

Despite tracking its Customer Loyalty Index, United ignores feedback or takes insufficient action. Effective feedback is essential. If a company interacts with customers, responds to comments and eliminates them, it has every chance to increase NPS and take a leadership position in the market.

8 mistakes in calculating the customer loyalty index

The biggest mistake companies make is when they don't measure customer loyalty and satisfaction. It is necessary to determine how satisfied the audience is with the product and service in any case, even if the company is small and just started, it has a small audience, there is a check (tender, exhibition) ahead, and there is no time for NPS yet, and even if it has never heard of customer loyalty index. If you have extensive experience in customer service and you have already conducted surveys more than once, you should still improve your skills and knowledge in order to quickly identify and fix problems. If you are just planning to get started calculating NPS, the information below will help you avoid common mistakes.

Conducting a survey by employees working with clientsand

Do not entrust the survey to those employees whose material remuneration and motivation depend on the survey results. At first glance, everything is already clear. However, companies often ignore this rule. As a result, numbers are distorted and the organization does not get food for thought, does not know what to work on, how to improve cooperation with customers.

Why is this happening? Not all buyers are brave enough to express or write a truthful opinion. Agree, you have repeatedly answered the waiter that you liked the dish, although in reality everything was different. In addition, many employees pressure respondents and directly ask them to give a high score.

Don't segment your customer base for a survey

1. Why they stopped working with the brand.
2. Why do they continue to make purchases / use the services of the company.
3. Why didn't they start using the mobile application?
4. Why did you place an order once and no longer turn to the service.
5. Will they make purchases in the future.

Even if you are asking the same questions to current customers, analyze NPS by product and manager.

Interview all customers in a row

If feedback and feedback are received regularly and after each purchase you send short e-mail messages to customers asking them to evaluate the quality of the service, then you are doing everything right. If you want to fully interview customers over the phone, carefully select the respondents. The group of respondents should include, first of all, the respondents most valuable to you.

Don't call customers to get feedback

The number of respondents should not be less than 65%. Only this guarantees the reliability of the survey and an objective index of customer loyalty. Traditionally, the greatest number of responses can be received when calling.

Choosing the phone as a survey medium is also worth making because it will connect with critics of the brand. Often this segment of buyers does not get in touch with the company through other channels, does not follow the links in e-mail messages.

Use a non-standard rating scale or change it periodically

Remember, the rating scale should not change under any circumstances. Standard - from 0 to 10. In it, 0 means "I definitely will not recommend", and 10 - "I will recommend with a high degree of probability." This is the scale that most organizations use. The rest of the options, for example, from 1 to 10, from 10 to 0, do not allow you to compare your results with the data of other brands or find out the exact NPS. The consumer may simply not understand what a particular assessment means.

Incorrectly phrasing the main question

It is very important to formulate the questions correctly so that consumers understand them correctly and give objective assessments.

B2B mistake: getting the opinion of one employee in the organization

If you provide services to legal entities, then, most likely, several people in the organization decide the issue of further cooperation. Dmitry Turusin, co-author of the book "Do something new", expressed his idea very well regarding the survey for obtaining NPS for a PR agency. In his opinion, the positive attitude of the manager and marketing director is not a guarantee that the contract with you will be renewed. You need to look, first of all, at the opinion of the decision maker. You need to talk about problems with loyal customer representatives and try to solve them.

Do not follow the indicator in dynamics

So, you've calculated your customer loyalty index. But don't stop there. Compare the indicators first of all with your previous results. NPS in dynamics helps to predict at what pace the company will develop. In addition, you need to compare your result with the average NPS in the world.

The best option is to compare your customer loyalty index with the results of companies in your industry. This allows you to track the dynamics of NPS changes, correct the situation in time by taking certain actions, and remember that the company's financial position can seriously deteriorate if the index lags behind competitors.

Another recommendation is to use the customer loyalty index as intended. Do not draw graphs and reports that will be stored among unnecessary documents. Based on the index, create an action plan to retain neutral users and critics to convert them into brand loyalists. It is very helpful to ask yourself, "What can be done to exceed customer expectations and solve the problems that caused them to not give us a high score?"

Frederick Reicheld is director emeritus of Bain & Company, based in Boston, Massachusetts, USA, and founder of the consumer loyalty research method.

NPS was invented at the beginning of the 2000s, but in Russia the index is still not in great demand. We will tell you how the index is calculated and applied in business, and about the polar points of view on its effectiveness.

NPS is a mirror of customer loyalty and an indicator of the company's future growth. Literally from English, Net Promoter Score can be translated as "general indicator of supporters", and a popular translation in Russian is the index of consumer loyalty.

You can easily find short history NPS: the metric was invented by Frederick Reicheld, who wrote about it in the Harvard Business Review, and then, together with the Bane company, began to introduce it into American companies. But prior to that, Reicheld explored the relationship of various questions that can be asked to a client with business growth rates among fourteen companies. Only after testing all possible questions, he settled on one thing: are you ready to recommend the company?

NPS articles often overlook the original reason and motivation that led Reicheld to consider this metric the main and only important one: a loyal customer is a freelance marketer for the company. Customers who love the company may even leave it, but still recommend to acquaintances, friends and colleagues. For this reason, the consumer loyalty index is directly related to the growth of the company.

The consumer loyalty index shows the company's growth prospects.

How to calculate NPS?

The consumer loyalty index shows how many supporters or promoters a company has - people who are ready to recommend the company to their environment. It is calculated based on the responses of the clients themselves - those who used the services, not potential buyers. The process is as follows:

1. the company asks the question: "How likely is it that you recommend us?";
2. clients respond on a scale from 0 to 10, where 0 means I won't recommend you for anything, and 10 means I’ll tell everyone how great you are;
3. according to the answers, the segments are distributed: those who answered from 0 to 6 (critics), 7-8 (neutrals), 9-10 (supporters or promoters);
4. calculate the percentage of each segment;
5. from the percentage of supporters, the percentage of critics is subtracted - this is the NPS.

Collect index data regularly, but not too often. Companies approach the collection in different ways: once a month, once every six months, after each contact with the buyer.

A little more about the segments:

• supporters - give 9-10 points to the likelihood of recommendation, these are loyal customers;
• neutrals - they give 7-8 points, they are indifferent clients, they will not recommend;
• critics give 0-6 points, these are customers who did not like contact with the company so much that they are ready to leave negative reviews.

The lowest rate is -100, when the company has only critics, the highest is 100, when all the customers of the company become its supporters. A good indicator is a figure above zero.

Example:
At the end of this article, we ask our readers: Are you ready to recommend the article to your colleagues or friends?
50% of readers give 9 or 10 points, 30% of readers give 7 or 8 points, 20% give from 0 to 6 points - the article seemed so bad to them.
Subtract: 50% - 20% \u003d 30 - this is our NPS (and it's pretty good).

Opponents of the index (and supporters of their own metrics) write that one question cannot predict either the growth of the company or the loyalty itself. The creators of the index answered this in advance: use additional questions. Ask customers after the answer: what did you dislike, what caused such a high assessment of our company.

“Are you ready to recommend us to your friends?” Is not the only possible question, it should not be. It is convenient to use, but for effective research it is worth asking one or two clarifying questions. For example, at the end of the article, we could ask the critics: what was superfluous in the article? what was the article missing?

Net Promoter system, customer focus, bad and good profit

What you read in the previous part of the article is the past of the index, because over time it has grown from a single question into a system. This is often forgotten and left to the NPS "glory" just numbers, one of many in the company's annual report. The misunderstanding of the tool usually gives rise to disappointment after the introduction of the metric in the company: “we tried it - no effect”.

Net Promoter System is a customer-centric business strategy centered on measuring customer loyalty using the NPS index.

The introduction of the system requires a reorganization of the business, because at every level of the company, from executives to executives, the goal must be to create a positive customer experience and establish long and lasting customer relationships. And it sounds abstract enough to be difficult when introduced into a real business, where the seller's goal is to put the squeeze on by any means, the operator's goal is to endure the shift, and the marketer's goal is to submit a beautiful report.

But as idealistic as the goal of the system sounds, it works for Fortune 500 companies.

One of the key details of the Net Promoter system is the relationship between customer ratings and employee actions, or “feedback looping,” which enables real work instead of meaningless indexing. The company collects customer ratings, analyzes, communicates with critical customers and gives feedback to employees - so they learn which customer needed to work differently, and in general understand the responsibility for each contact with customers.

The system distinguishes between two types of profit: good and bad. Good profits come from actions that deserve the trust of buyers, bad ones - at the expense of trust and future relationships. For example, you might sell a stale product at a discount and upset buyers with stale products - this is a bad profit, although it will allow you to get a short-term benefit.

NPS Application

You can also find specific NPS numbers for various industries and companies. For example, there are NPS (paid access) benchmarks for various industries from Satmetrix, a software company for measuring the index. And here are benchmarks from Npsbenchmarks (free access).

But benchmarks are good, and understanding your business is better. How do you know which NPS is good or sufficient?

Writes Mike Gowen, co-owner of Delighted:

• score from -100 to 0: most people have a negative experience with your company and advise others never to contact you;
• 1-30: normal grade, but room for improvement;
• 31-50: the majority is here. Companies from this segment care about the customer experience and most often make it memorable;
• 50–70: These companies are even more concerned about customer service, and they are among the most loved by customers;
• 71-100: The Holy Grail is an almost unattainable ideal reserved for the best companies the world.

Another way to understand if the NPS is high enough is to answer these questions:

• Is your NPS higher than the competition?
• Is it above zero?
• Is your rate growing?

If you answer yes to all three questions, that's good. But that doesn't mean you can stop trying. The Net Promoter system has no ultimate goal other than continual improvement.