What is nps

Note: You can also gather NPS results from your employees to understand their satisfaction and happiness working for your company.

To calculate your NPS, you first have to survey your customers. The NPS is the typical answer to the question "On a scale of 0 to 10, how likely are you to recommend to a friend? Customers who answer the question with As you might be able to infer from the names of these groups, promoters are enthusiastic, loyal customers who will tell their friends about your business and bring in new customers.

Passives are indifferent and could become promoters — or they could switch to your competition. Detractors are unhappy customers, and not only are you at risk of losing them, but they could also do damage to your brand by sharing their bad experiences with other people.

To calculate Net Promoter Score , subtract the percentage of detractors customers who wouldn't recommend you from the percentage of promoters customers who would recommend you. The key to achieving a high NPS is having a greater number of promoters than detractors — a lot more. Imagine you surveyed customers. Consistently surveying customers and learning how they talk about your company to friends and family helps identify risks, areas of opportunity, and ways to improve.

That's why we recommend including space for customers to comment and leave qualitative feedback about how you can improve. From there, you can source specific customer pain points and ways to improve their experience. Quantitative feedback is the response to the rating question we mentioned above. Qualitative feedback comes from follow-up questions after that rating has been provided. Let's take a look at some examples of these NPS survey questions you can ask.

You'll notice the first three questions relate to the quantitative findings since they're based on a scale of The final four survey questions are open-ended and relate back to the qualitative findings, or the "why" behind the ratings given. Customer NPS helps brands evaluate customer loyalty — and the likelihood of them recommending you to a friend. It also helps evaluate the likelihood of customers churning — canceling their subscription or not repurchasing and seeking out a product or service from a different company.

While you want to attract and convert new customers, retaining and empowering existing customers has an even higher ROI. Needless to say, identifying customers at risk of churning is a key aspect of making this possible, and measuring customer NPS over time helps companies do just that. Changes in the overall NPS give companies an idea of how likely it is the average customer will recommend you to a friend.

But changes in the breakdown of scores — between promoters, passives, and detractors — also give customer success teams an indication of which direction the overall NPS is trending. For example, if the number of detractors decreases and the number of passives increases, that could mean that customer perception is trending positively. But a decrease in promoters and an increase in passives, on the other hand, could indicate a risk of customer churn and negative reviews.

Changes in the customer NPS could be a good indicator — or red flag — of the current state of customer satisfaction — and the potential risk of churn. Mention used NPS surveys to cut its churn rate in half — in just two months.

Here is the NPS survey they sent out:. Image Source. Based on the responses received, Mention sent out custom emails and offers to customers depending on their level of satisfaction or lack thereof. Then, passives received an extended free trial period, and detractors were thanked for their honesty — and asked how things could be improved. Customers might answer the NPS question with a low score, or even a 0. It's tough when that happens — especially if it happens more than once — but it also presents an opportunity to zero in on customer feedback and make product or service improvements accordingly.

That's why we suggest an NPS survey with additional space for customers to leave specific comments about why they gave the score they did. That way, you can evaluate qualitative feedback about customers who might pinpoint specific things you can change to improve their experience with your product or service. Sure, not all feedback will be helpful — there will always be trolls on the internet — but specific notes about bugs, poor user experience UX , or a bad call with a customer success manager could be quickly routed to the responsible team to address.

At Magoosh , an online standardized test prep resource, NPS helped flag a customer complaint that contributed to a lower score and identified where to improve for the customer. If a company has more detractors than promoters the score will be negative and vice versa.

A Net Promoter Score provides companies with a simple and straightforward metric that can be shared with their front line employees. The Net Promoter Score is helpful in that it can be used as motivation for employees to improve and to provide the best customer experience possible.

The ultimate objective here is to convert customers who were less than happy or unimpressed into promoters who will put the word out and allow for increased revenues and profits. Higher Net Promoter Scores tend to indicate a healthier business, while lower Net Promoter Scores can be an early warning to dig deeper into potential customer satisfaction and loyalty issues.

Net Promoter scores are often averaging quite low. Starting from behind, it would cost a company much more money to win back a detractor as opposed to simply keeping promoters on board. A detractor can file complaints, bog down customer service lines and will need more time and resources from the company to be served. The reverse is true with a customer enthusiast and promoter.

Free publicity from a promoter means the company need not spend as much on marketing and advertising! On average, the leader in an industry has a Net Promoter Score more than double of its competitors. The list is far from comprehensive but gives an idea of the Net Promoter Score popularity and widespread use.

The list can be found here: Companies using NPS. It needs to be part of a broader ecosystem whereby the entire organization lives and breathes by it. First off, without senior leadership sponsorship and a strong commitment to improving the customer experience, it will be difficult for any one part of the company, be it marketing, sales, operations, customer service or a customer experience team to get the necessary cross-functional adoption and accountability for the program.

It needs to be a company-wide effort. Secondly, the NPS eco-system needs to have a closed loop. Front employees need to be able to act upon real-time feedback and from insights from customers and the rest of the organization. You can validate the registration using the OTP sent to your mobile. The former is the default account while the latter is a voluntary addition. The table below explains the two account types in detail. For everyone else, the NPS is a voluntary investment option.

Here is how they are in comparison to the NPS:. Taxability on NPS withdrawal is subject to change. The good thing about the National Pension Scheme is that it has equity allocation. However, the equity allocation is still not as much as tax-saving mutual funds. Since ELSS can meet that requirement, it serves investors with more risk-appetite better.

Step 5: An OTP will be sent to your registered mobile number. Once you enter this OTP on the screen, your password will be confirmed. Step 7: You will be redirected to the home page of your account. Hence, consider investing in the NPS scheme if the benefits elaborated above match your risk profile and investment goal.

However, if you are open to more equity exposure, many mutual funds are catering to investors from diverse backgrounds available. If you think researching, shortlisting and finalising is too much work, ClearTax Invest has already taken care of it. We have handpicked the best-performing funds from the top fund houses for you. It is never too late to invest. Link Aadhaar with Insurance Policies.

Thank you for your response. Are you a salaried employee? Download link sent. Updated on : Nov 12, - AM 08 min read. Start Investing Now.