What is NPS? How can you use it to your advantage?

3 minutes to read

It is the desire of companies and professionals for customers to be satisfied with their products or services. However, this is a very subjective measure involving studies on complaints and opinions. This is one reason why knowing what NPS is turns out to be so important in measuring your success.

This metric is paramount for assessing aspects such as customer service, after-sales services and, above all, customer retention.

If you are interested in how this strategy works, read on. Keep following us!

What is NPS?

NPS stands for Net Promoter Score, which is an approach designed to track the following processes:

-the customer’s journey;

-the customer’s interactions;

-the consumer’s experience.

This metric can be applied in a variety of areas that have contact with consumers and potential customers such as sales, technical support, and service channels.

Even with its value for companies and managers, NPS does not need to be used exclusively. After all, there are quality indicators that can be related to financial indicators like revenue and billing.

How can you apply NPS?

The Net Promoter Score aims to demonstrate how customers feel about the company and products. To put this process into practice, we start with this very simple question: On a scale from 0 to 10, how much would you recommend our company / product / service to a friend?

The answer to this question indicates the degree of loyalty to your company. This result represents both new and recurring customers.

Evaluation of Results

On a scale of 0 to 10, the higher the number, the more likely it is to refer the brand to others. Thus, by tabulating these answers, the results are separated into three categories:

– Detractor (0 to 6): are individuals who are dissatisfied with the company because of negative experiences;

– Passive (7 and 8): Customers at this level are qualified as satisfied but have not developed a sense of loyalty. Their behavior is neutral and may be attracted by competition;

– Promoter (9 and 10): is the ideal consumer who, in addition to recommending products and services, has a high buyback rate.

Monitoring of the qualitative stage

There are several reasons that motivate a customer to recommend your company to their social circle. However, the cited question above does not allow a qualitative assessment.

Therefore, some companies ask their consumers to justify their answer. Answers generally include items such as:

  • quality;
  • functionality;
  • affordable prices;
  • physical characteristics.

Therefore, this is an efficient way to collect data involving economic and functional factors.

How does NPS calculation work?

To obtain the Net Promoter Score, we use the formula that subtracts the percentage of Detractors from the percentage of Promoters, which can be represented as follows:                       NPS =% Promoters -% Detractors. Understanding what NPS is and how it works provides ways to improve customer relationships and keep an eye on their behavior.

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The VMI Portal is a portal of news and information on systems of collaboration between suppliers and customers, which is growing continuously. The idea is to promote and disseminate the concepts of Supply Chain Management (SCM) and Vendor Managed Inventory (VMI), among other topics.

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