One way to measure customer loyalty is through a Net Promoter Score (NPS). And while the NPS score is straightforward for measurements like customer loyalty, it is somewhat limited when actually measuring true customer experience or the overall success of a product or service.
How the net promoter score works
At its heart, the NPS of your company measures a simple question: “How likely is it that you would recommend [company X] to a friend or colleague?” Respondents are then asked to rate their responses from 0 to 10. On the scale, 0 equals “Not at all likely,” while 10 equates to “Extremely likely.”
Companies use an NPS score to determine customer loyalty in regard to products and services. Respondents giving a 0 to 6 rating are considered “detractors,” 7 or 8 raters are considered “passives,” and those giving a 9 to 10 rating are considered “promoters.”
To get a final NPS, you subtract the number of detractors from the number of promoters and then divide this sum by the number of overall respondents. Many companies use this final NPS to assess their performance. While simple to execute, an NPS has both advantages and drawbacks to understanding how people feel about your product or service.
Advantages to the net promoter score
Because deploying and measuring an NPS is fairly easy to do, it allows companies a simple way to get quick feedback from customers and measure the customer base satisfaction level. Plus, the single-numbered nature of the NPS makes it easy to compare companies across the same industry to benchmark them with each other, or to compare past and current performance of the same company.
While an NPS serves its purpose, there are much better ways of gauging customer devotion to your company’s products or services, or overall customer experience.
Disadvantages to the net promoter score
While an NPS score serves a simple purpose, there are a few drawbacks to an NPS and its measurement of customer loyalty and customer satisfaction.
Because the NPS is based on a single question that measures whether a customer would recommend your company’s products or services, it’s extremely limited in scope. The NPS also doesn’t deal with a current behavior, but a future action that might not even happen!
Additional drawbacks of an NPS include:
The sample size is small because the only respondents are individuals who have actually used your company’s products or services.
An NPS is poorly calibrated. For instance, there is little difference between a rating of 0 or a 6, as they are both considered “detractors.”
Asking for feedback, as opposed to getting it organically from the open Web, means that your company only hears back from those who have an interest in your products or services.
Alternative questions for NPS
Conducting a customer survey, in addition to measuring an NPS, provides you with a broader assessment of your customers’ mindset at a particular point in time. As a part of a customer survey, given along with the NPS question, your company should consider asking more in-depth questions, including:
How long have you been using the product?
Did you consider any alternative before purchasing the product? If so, which?
How often do you use the product?
What would you improve with the product if you could?
Have you encountered any problems while using the product?
The ‘word-of-mouth’ factor
In the past, people would often buy a product according to recommendations from their friends and families. In addition to advertising, this “word-of-mouth” factor was extremely limited to a close-knit circle of friends and family. With the invention of the internet, “word of mouth” was expanded exponentially.
Today, consumers have come to also rely on recommendations published on online review sites and forums (such as Trustpilot, Yelp, and App stores), as well as social media sites (such as Facebook and Twitter). In some cases, these online sources exist for the sole purpose of giving product and service reviews. That’s why it’s important for you and your company to know what is being said about your products or services.
Alternatives to NPS
Another important factor to keep in mind is that the NPS system is not the only game in town. There are a variety of other alternatives to the NPS, including these options:
A variation on the NPS method, including those that slightly tweak the standard NPS, such as adjusting the scale to 0 to 5 as opposed to 0 to 10; rewording the initial question; or even changing the criteria for detractors, promoters, and passive respondents.
The Customer Satisfaction (CSAT) survey is similar to an NPS in that it focuses on a single question: “How satisfied were you with our service/product?” Unlike the NPS, though, the CSAT uses a scale from 1 to 5.
Customer churn is another popular term and details how many of your customers wish to continue buying your company’s products or services. This is usually measured in the form of revenue or customers lost.
The Customer Effort Score (CES), like many of the other methods mentioned here, asks a single question centered around a given product or service: “How much effort did it take to deal with us?” Like CSAT, respondents are then asked to give a rating between 1 and 5.
A customer health score measures which of your company’s customers are “healthy” as opposed to those who are “struggling.” This allows your company to focus on struggling customers and getting them back to where they need to be, which is happy with your products and services.
A Product Engagement Score (PES) measures customer engagement in three areas: stickiness, feature adoption, and retention. The score wraps everything up in a mathematical equation: [(Feature Adoption + App Retention + Stickiness) / 3] x 100.
Customer intelligence platforms, such as Affogata, are also an option. For example, Affogata provides companies with a Brand Reputation Score by leveraging the power of data from across the internet, as opposed to only asking a single question, such as with the NPS, CSAT, and other methods.
What is Affogata’s Brand Reputation Score?
Affogata calculates its Brand Reputation Score by measuring how your company’s products and services are perceived across the open Web, including reviews left on review sites and social media, as well as by assessing internal company data and customer support tickets. The score is based on the sentiment and volume of brand mentions, and they do not have to be direct mentions of the brand name either, also indirect mentions or related topics can be included.
Through your company’s scores in a variety of Key Performance Indicators (KPIs), you can track how your company is doing compared to the competition. Plus, you can benchmark your own company’s current performance compared to past performance.
How Affogata can help you better determine your brand reputation
Affogata’s Brand Reputation Score measurement allows you to determine where changes need to be made for better customer satisfaction, engagement, and loyalty; as well as to improve overall customer experience with your company’s products or services. The score goes far beyond a simple number grade; users of Affogata’s platform can drill down further into brand reputation by date ranges, topics or keywords, to gain a better understanding of pain points or areas you can work on improving. Affogata will show you what’s working well vs. what is not, which keywords or topics to prioritize, so you can work first on optimizing the low ranking topics.
You can view your brand reputation score in a trendline, so understand the score’s fluctuation over a certain time span to give a better overview of the company and to analyze how various activities – e.g. campaigns, product launches, competitor activity, etc. — may affect the score.
By tracking your brand reputation score in Affogata, you can account for changing customer needs, so you can give your customers what they want when they want it. Using a tool like Affogata helps your company apply its resources where they have the most impact, stay ahead of the competition, and keep customers happy and engaged.