3 min read

Why NPS Matters

Why NPS Matters

In today's fiercely competitive business landscape, understanding and improving the customer experience is paramount. 

A recent study on NPS benchmarks some astonishing insights emerged. The research revealed that a significant 62% of businesses do not presently calculate the return on investment (ROI) of their experience programs. Further, 70% of companies do not integrate their experience programs with their financial data. Equally surprising, 63% of companies struggle to trace referrals generated by their experience programs. Even more striking, a tenfold increase in NPS Score was found to correspond with an impressive 3.2% surge in upsell revenue. This underscores the untapped power of NPS as a strategic tool for business growth.

It's crucial to recognise that NPS Scores exhibit natural fluctuations over time. While these changes might tempt some to halt their NPS programs prematurely, it's essential to understand that these variances offer invaluable insights when viewed in the broader context. As studies have shown, NPS Scores can indeed evolve in response to external factors. For instance, the overall NPS score during COVID-19 for U.S. customers declined from 29.8 to 14.6, particularly within the tourism and hospitality sectors. This decline aligns with the understandable constraints imposed on travel and leisure during challenging times. Furthermore, our evolving interactions with brands and evolving experiential needs highlight the dynamic nature of the business landscape.

For the past two decades, NPS Benchmarking has served as a pillar of insight for businesses globally. Introduced 20 years ago, this metric has transformed how companies approach customer service and experience enhancement. The true value, however, resides in the long-term perspective. Rather than scrutinising NPS month by month, companies benefit most from tracking their NPS trends over time. This approach allows businesses to harness the true potential of NPS as a strategic compass guiding them toward lasting success.

This is where Net Promoter Score (NPS) comes into play. NPS is not just another metric; it's a vital tool that can revolutionise your business. Here are 13 reasons why you should consider embracing NPS:


Identifying Customer Churn: By segmenting your customers based on NPS, you can pinpoint the factors that drive customer detractors, passives, or promoters. Armed with this knowledge, you can take proactive steps to retain your valuable customers.

Gauging Competitor Movements: NPS fluctuations can often be indicative of your competitors' actions. When your score dips, it's time to investigate and stay ahead of the competition's marketing offers and promotions.

Enhancing Agent Training: Analysing verbatim responses and dissatisfaction themes in NPS feedback allows you to identify gaps in your agent's knowledge and address them with targeted training, ultimately improving customer satisfaction and NPS scores.

Measuring Overall Customer Experience: A high NPS score is a clear signal that your customer experience is on point. Use it as a benchmark to stay ahead of any declines in customer service, satisfaction, or product quality.

Detecting Growth or Shrinkage Periods: NPS can serve as an early warning system for market and social changes. By monitoring NPS, you can adapt your operations and marketing efforts to navigate challenging times.

Understanding Customer Preferences: Segmentation based on NPS helps you connect with your customers on a deeper level, uncovering their likes, dislikes, and usage needs. This invaluable information can be leveraged to create highly targeted marketing campaigns and offers.

Evaluating Marketing Campaigns: NPS can tell you if your marketing campaigns are a hit or miss. If you observe a significant drop after partnering with specific influencers or launching certain products, it's a cue to make course corrections.

Safeguarding Your Reputation: Detractors tend to share negative feedback by word of mouth. By actively monitoring NPS, you can manage the narrative around your brand or business, gaining an advantage in a world where negative experiences spread quickly.

Boosting Shareholder Returns: A study by the London School of Economics revealed a strong correlation between NPS and revenue growth. A 7% increase in NPS was associated with a 1% increase in overall revenue growth. This demonstrates the tangible financial benefits of a high NPS.

Enhancing Employee Engagement: NPS isn't just about customers; it also ties directly into employee satisfaction. Monitoring NPS and addressing issues highlighted in verbatim feedback can lead to a more engaged workforce committed to delivering an excellent customer experience.

Gathering Data-Driven Insights: In a world where customers are willing to pay more for exceptional service, ignoring what your customer base is saying is a costly mistake. NPS feedback, with its themes and insights, guides improvements, marketing strategies, and targeted training, ultimately saving you money and resources.

Leveraging Promoters: In an interconnected world, your promoters can be your most potent marketing force. They're your brand advocates, and their recommendations hold significant weight. Cultivate a network of promoters to tap into millions of share points and free publicity.

Increasing Customer Lifetime Value: A high NPS indicates satisfied customers who are likely to make repeat purchases and refer friends and family to your business. Continuously striving to improve your NPS can result in long-term, high-value customers.

Net Promoter Score is not just a metric; it's a strategic asset that can drive growth, enhance customer loyalty, and boost your bottom line. Embracing NPS as a fundamental tool for understanding and improving your business's customer experience can lead to significant benefits in today's competitive marketplace.

Don't miss out on the opportunity to harness the power of NPS for your business's success, click here to start your NPS survey today. 


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