6 Important Reasons to
Use NPS for Your Brand

Key Benefits of Using NPS

If you want to drive long-term growth for your company, you need happy customers.  Enthusiastic customers that love your brand and recommend it to friends, family and colleagues.  While lengthy customer-satisfaction surveys have traditionally been used to gauge overall customer perception of your brand, they don't always provide the most accurate picture of the situation.  Instead, more and more brands have been relying on the Net Promoter Score (NPS) survey, a single-question survey that takes just seconds to complete.  In this article, we'll discuss some of the key benefits of using NPS for your brand.

Understanding NPS

Before we can talk about the benefits of using NPS, it's important to understand what the score represents.  A NPS survey asks a single question:

"How likely are you to recommend us to a colleague or friend?"

The survey responses can be classified as follows:

  • 0 to 6:  Detractors:  Unhappy customers who are unlikely to be repeat customers and hurt business growth through negative word-of-mouth

  • 7 to 8:  Passives:  Customers who are somewhat satisfied but not loyal - they're apt to defect to a competitor if presented with a better offer

  • 9 to 10:  Promoters:  Enthusiastic, loyal customers who are likely to recommend your business to others and make repeat purchases

Calculating your Net Promoter Score begins by calculating your percentage of promoters and detractors.  To arrive at your NPS, use the following equation:

NPS = (Percentage of Promoters) - (Percentage of Detractors)

Your Net Promoter Score can range from -100 to 100, where a score of 100 would mean that all your customers were promoters, and a score of -100 would mean that all customers were detractors.

The Six Biggest Reasons

There are many reasons why brands are using NPS to measure customer experience:

  1. Boost customer satisfaction:    Every business wants their customers to be satisfied, but it's not always easy to know exactly what customers think of your brand.  That's where NPS can deliver real value, providing metrics that help you measure customer satisfaction and take steps to improve it.  When you conduct NPS surveys on a regular basis, you can see if your strategies are working.

  2. Measure customer loyalty:   Gauging customer satisfaction is important for business growth, but it's only one piece of the puzzle.  Customer loyalty is critical to success.  Acquiring new customers can be costly; in fact, a study published in the Harvard Business Review suggests that it costs five to 25 times more to acquire a new customer than it does to keep an existing one. [1] Over time, a regular NPS survey schedule can provide a valuable measure of your loyal customers and brand advocates.

  3. Create brand advocates:   NPS provides valuable information about how many of your customers are brand advocates, or promoters.  These promoters provide incredible value to your company, referring your business to colleagues, family, and friends and boosting your brand's reputation through positive word-of-mouth.  With NPS data, you can assess how many brand advocates you have and take steps to create more.

  4. Minimize churn:     It's difficult for your business to grow if your churn rate is high.  Your brand's promoters are the least likely to churn - the real risk comes from detractors and passives.  When you learn from the feedback customers provide in NPS surveys, you can work on delivering the kind of top-notch customer experience that reduces the number of dissatisfied detractors and converts passives into active promoters.

  5. Close the customer-feedback loop:       The real power of NPS doesn't lie in the number alone - the value depends on what you do with it.  Closing the customer-feedback loop can help you transform the makeup of your customer base, turning unhappy detractors into promoters and changing on-the-fence passives into loyal customers.

  6. Fuel revenue growth:Research shows that the best way to fuel revenue growth in your company is to focus on your promoters - keeping the ones you have and turning passives into new promoters.  There are a number of factors that contribute to the power of promoters.  As we mentioned, they tend to have a lower churn rate, and they're less likely to seek out a better deal from a competitor.  Promoters also account for most of a business's referrals, which has a real impact on revenue.  For example, a study by Bain & Company estimates that a typical promoter is worth $9,500 more to a bank or financial institution than a detractor.[2]

There's no doubt that the customer experience can make or break your brand's long-term growth, but how can you ensure that your company is delivering the right kind of experience?  NPS can help you ensure you're on the right track. Armed with the powerful, actionable insights from NPS surveys, you can make the kind of smart business decisions that "wow" your customers and keep them coming back for more.


1. https://hbr.org/2014/10/the-value-of-keeping-the-right-customers

2. http://www.bain.com/Images/LOYALTY_INSIGHTS_3_The_economics_of_loyalty.pdf