NPS index. We track customer loyalty

After all, loyal customers:

• They will recommend you to friends and acquaintances.
• They will continue to buy from you as long as they need it.
• They will not purposefully look for another brand.
• Even competitors' discounts are not so attractive for them.
• Most likely, they will be interested in the products you offer them.
• They will treat technical problems, delivery problems and other temporary difficulties with understanding.
• They will give you feedback if you ask: they will write a review of the product or point out what can be improved.

And in order to manage customer loyalty, it is important to learn how to measure it. This will help us become better and sell more. How to measure loyalty? Now we'll tell you.

#1: Measure NPS

The NPS (Net Promoter Score) loyalty index is the basis for measuring loyalty. It shows whether customers are willing to recommend your brand to friends. It's easy to measure and just as easy to interpret:

1. You ask how likely, on a scale from zero to ten, the client will recommend your brand to his friends: 0 - never and never, 10 - definitely, even today.
2. Divide the answers received into three groups, as a percentage. Critics- those who put from 0 to 6. They are unlikely to recommend you to anyone, perhaps they will even dissuade you. Neutrals- those who gave 7 or 8. They seem to be satisfied, but they are unlikely to recommend you. Promoters- those who gave you 9 and 10 points. They have the most pleasant impressions of communicating with you, and they will really recommend you to their friends.
3. Subtract the percentage of critics from the percentage of promoters - this is the NPS.

NPS calculation formula

If the number has a plus sign, it means you have more fans than haters. As you understand, the higher this number, the better. A negative and zero value indicates that the brand has problems and it’s time to do something about it.

The classic NPS ends here, but there is also an extended version - this is when you also ask why the client gave this particular rating. It allows you to specify the claims of critics and identify strengths through feedback from promoters.

You can collect data in different ways: send an email newsletter with a questionnaire, arrange an online survey directly on the website or in the application, work with a call center and conduct a mass call, have a robot call clients automatically.

#2: Measure the CSI Satisfaction Index

The Customer Satisfaction Index (CSI) measures how satisfied customers are immediately after interacting with a brand. At the same time, CSI implies that customer satisfaction depends not only on the direct characteristics of the product, but also on how important these characteristics are to him. Using the Customer Satisfaction Index you can find out:

• How satisfied are consumers with a particular product?
• How satisfied are they with the overall experience with the brand?
• How satisfied are they with interactions with your competitors?
• How satisfied are different groups of clients after interacting with you - and compare these indicators with each other;
• how the attitude towards the brand changed after marketing campaigns or some other actions - for example, after staff training - if you measure CSI before and after.

CSI is measured in two stages:

1. First, they determine by what parameters satisfaction with the product will be measured. There can be many of them, and they depend on the specifics of the brand: the Internet speed of the provider, the quality of printing in a book publishing house - and so on. But the 5P criteria can be taken as a basis: Product, Price, Place, Promotion, People - satisfaction with the product itself, price, place, promotion, people. For example, did the 24-hour consultant help or did the manager who confirmed the order over the phone speak politely?
2. Then data is collected using personal CAPI and PAPI surveys, telephone CATI and online CAWI. The surveys have two sections: the first one asks how important each parameter is for customers, and the second one asks how satisfied they are with these parameters. Usually, in both cases, they use a rating on a scale from 1 to 7, but not necessarily. Sometimes the questionnaire includes additional questions that imply a detailed answer (like with NPS, remember?) or allow you to judge satisfaction not with an individual product, but with the brand in in general.

Both indices, NPS and CSI, can be used to evaluate b2b and b2c segments. And it’s best to evaluate them together: this way you can understand whether satisfaction (CSI) leads to loyalty (NPS).

In our country, as a rule, the assessment of brand loyalty is limited to these two indicators. But Western marketers identify a number of other characteristics, briefly about them.

Repurchase Ratio - repurchase ratio

The repurchase rate is the ratio of “repeat” customers to “one-time” customers. The logic is this: at the heart of a commercial relationship is purchase, so repeat purchases can provide reliable evidence of customer loyalty. Important: we are talking about the same products - again we will return to the provider or the b2b segment, which, for example, purchases raw materials or office supplies.

It is calculated in different ways. If the brand’s business model is based on a subscription, that is, a certain amount is debited from the client every month (quarter, year) for services, you simply need to divide the number of clients renewing the contract by those who stop using the services after the first cycle.

For those who work with transactions, you need to consider the average time between the first and second purchase of regular customers and the standard deviation. In general, it’s difficult, but there is a tool for calculation.

Upselling Ratio - sales ratio

The sales ratio is similar to the repurchase ratio - the only difference is that we are talking about different products. To calculate it, you need to again divide “repeat” clients into “one-time” ones. This metric reflects the trust you gain from your clients' previous experiences.

The more different the second product is from the first, the greater the loyalty to the brand. For example, let's take an online clothing store and an online electronics store. The first client can buy jeans once a year because he is satisfied with everything. The second one is to first buy a smartphone, make sure everything is in order, and then buy a laptop. The Upselling Ratio of the second store is higher.

Customer Loyalty Index - another loyalty index

CLI is a loyalty index that shows the same as NPS, plus the possibility of repeat purchases and the purchase of other products. It contains three questions:

1. What is the likelihood that you will recommend us to your friends and acquaintances?
2. How likely are you to buy a product from us again?
3. How likely are you to try our other products and services?

CLI is assessed on a six-point scale, where 1 is “definitely yes” and 6 is “definitely no.” The overall CLI is the average score of the three answers. This index is believed to cover more aspects of loyalty and is therefore more reliable.

However, in our country they don’t really like it, because, firstly, it takes more time and human resources. Secondly, the issue of reliability is still controversial, because errors creep into the results of each survey, and in the case of CLI, these are errors from not one, but from three questions.

NPS is the opposite

This, like NPS, is a one-question survey, but here you ask customers how much they would miss you if the company went out of business tomorrow. And the same ten-point scale: from 1 - “I won’t notice”, to 10 - “I can’t cope without you.”

The survey measures your emotional connection with your customers and the value of your USPs. So if there are a thousand other companies on the market besides you doing the same thing, customers are unlikely to lose sleep over your disappearance.

Customer Engagement Numbers - engagement indicators

Many believe that online engagement metrics now play a much more important role than NPS and CLI - they are easier to measure and influence, and they are also more closely linked to revenue and profit.

Guy Nirpaz, CEO and founder of cloud app user acquisition company Totango, suggests using these metrics first:

Activity Time. This is the average time that customers interact with your service per day, week, month or year - whichever makes the most sense for your offering.

Visit Frequency. Shows how often a user returns to your service.

Core User Actions. Analyzes whether the user can experience the basic functions of the service.

As you can see, measuring customer loyalty is quite possible. All the methods that we have written about, in one way or another, help to identify the strengths and weaknesses of a brand and suggest where it should go.

We've released a new book, Social Media Content Marketing: How to Get Inside Your Followers' Heads and Make Them Fall in Love with Your Brand.

The Net Promoter Score (NPS) is an easy-to-calculate metric that determines the degree of customer commitment to a company in general, or to a product or service in particular. Commitment here refers to a person’s willingness to recommend the service they like to friends and acquaintances, as well as the willingness to make a repeat purchase.

What does NPS measure?

It is believed that this indicator is statistically related to income: the higher it is, the faster the company is developing economically. This is determined from many parameters, but the main result consists of the following criteria:

1. The likelihood that a person will seek repeat services again.
2. The degree of positive attitude of the buyer towards an unplanned or more expensive purchase at the time of payment for the current one (this could be accessories, insurance, etc.).
3. Reviews on the company website or third-party forums.
4. Recommend the service to friends and acquaintances.

According to many domestic and foreign experts, the loyalty index is one of the best tools with which you can find out how well (or positively) potential customers feel about the product offered. The results of the study help to evaluate and understand how to improve the quality of service and, accordingly, the degree of consumer commitment.

If not enough effort is made in this regard, complications in the activity are possible. In particular, the amount of income equal to the entire volume of purchases made over a certain period decreases, and the LTV indicator also decreases (that is, the amount that one person brings to the organization decreases). Other negative phenomena include:

• Inability to create a portrait of the average client.
• Lack of interest and demand for a new product.
• An increase in the “dump” rate, that is, temporary or permanent loss of customers (they refused the service, went to competitors, etc.).

Ultimately, a low NPS loyalty index negatively affects sales and overall profits. To correct the situation, it is necessary: ​​firstly, to conduct research regularly (preferably every month), and secondly, to analyze the information received and build a further trade policy based on it.

What does NPS measure?

You can make appropriate measurements of indicators using a customer survey. To do this, you need to send them a letter to their email or mobile phone number asking them to rate the level of service on a ten-point scale, as well as the likelihood that the person will recommend the organization’s services to friends and acquaintances. In addition, you should ask for recommendations or advice on how to improve your service.

You can conduct a survey not only by email or SMS. For these purposes, it is recommended to use calls to numbers from the collected database, create a special form on a web resource, create a survey on official pages on social networks, etc. In order to obtain as much information as possible, it is also necessary to interview partners through whose networks the product is sold.

How is NPS calculated?

To make the calculation, you need to create several groups and distribute the surveyed clients into them based on the ratings received. The first category should include those who were dissatisfied. Typically, such buyers give a low score: from zero to six (if a ten-point rating system is used). Such people will not recommend the service to others and may not use it again.

The second category is passive buyers. The average score here is 8 units out of 10 possible. As a rule, they are satisfied with the service, but will not talk about the company or recommend it. This is due to a lack of interest. The third group includes regular supporters - these are those who regularly use the services and give high ratings.

The customer loyalty index is calculated using the formula: “Number of supporters/total number of respondents”, “Number of dissatisfied/total number of respondents”. For example, a survey was conducted among one hundred respondents. At the same time, five people were in the range from 0 to 6 points, thirty - from 7 to 8, the remaining sixty-five - from 9 to 10 points. Therefore, the calculation of the shares in each group will be 5, 30 and 65%, respectively.

Organizations with a low index cannot develop and increase product turnover. Consequently, they cannot compete and will suffer losses. The average value - from 30 to 45% - indicates that the company is developing and can compete for the position of leader in the market. To do this, it is necessary to analyze the shortcomings and correct them, increasing the NPS customer satisfaction score. 50% or more is a market leader that the consumer will turn to on an ongoing basis.
However, despite the high positions, it is necessary to constantly calculate and try to increase indicators for further growth.

Naturally, this is a maximally averaged scheme that cannot be used in practice. In reality, many factors must be taken into account - both general and individual for each industry.

Techniques for measuring and increasing the consumer loyalty index

Considering that in each area of ​​business “good” statistics look different (in insurance - 30%, online store - 20%, consulting - 40%, etc.), most companies use different techniques and methods of communication with target audience, receiving an overall assessment based on individual indicators. Among such methods for measuring the NPS customer loyalty index, it can be noted when a person:

1. Made a purchase at a point of sale (office or store).
2. Pays a visit regularly (no matter whether he buys goods or not).
3. Contacted the support service to resolve a problem or get advice on an issue of interest.
4. Visited the company's website or placed an order for a product.
5. Left a review on a web resource, a third-party forum, in a book of complaints and suggestions, or in any other sources.

It is worth noting that after the rating is given, it is necessary to ask a clarifying question about exactly why the service was rated this way and not otherwise. This will make it possible to collect as much useful data as possible about the person and his relationship to the organization.

Why is it important to count the index?

By calculating and analyzing the NPS indicator, you can obtain invaluable information about what the real attitude of consumers towards the company and the services it provides. By receiving and processing this data, it becomes possible to work on improving the service and popularizing products.
In conjunction with other communication tools, for example, a feedback form, NPS allows you to reduce customer churn by building long-term and cost-effective relationships with them. Knowing the net loyalty index, specialists can begin to “convert” dissatisfied and passive consumers into their regular audience, correcting previously made mistakes, improving customer service and the quality of goods and services offered.

However, while customer satisfaction metrics are important, they should not be treated like numbers. Many businessmen suffer from this, wanting to create an ideal customer base. Such policies can alienate audiences and disrupt communication channels.

NPS was invented back in the early 2000s, but in Russia the index is still not in great demand. We will tell you how the index is calculated and used in business, and about the polar points of view on its effectiveness.

NPS is a mirror of customer loyalty and an indicator of the company's future growth. Literally from English, Net Promoter Score can be translated as “the overall indicator of supporters,” and a popular translation in Russian is the consumer loyalty index.

You can easily find a brief history of NPS: the metric was invented by Frederick Reichheld, who wrote about it in the Harvard Business Review, and then, together with the Bain company, began to introduce it to American companies. But before that, Reichheld examined how different questions you might ask a customer correlated with business growth rates among fourteen companies. Only after testing all possible questions, he settled on one: are you ready to recommend the company?

Articles about NPS often miss the original reason and motivation that led Reichheld to consider this metric the main and only important one: a loyal customer is a company's freelance marketer. Customers who love the company may even leave it, but still recommend it to acquaintances, friends and colleagues. For this reason, customer loyalty index is directly related to company growth.

The consumer loyalty index shows the company's growth prospects.

How to calculate NPS?

The consumer loyalty index shows how many supporters or promoters a company has - people who are ready to recommend the company to their surroundings. It is calculated based on the responses of the clients themselves - those who used the services, not potential buyers. The process is:

1. the company asks the question: “How likely is it that you will recommend us?”;
2. clients answer on a scale from 0 to 10, where 0 means I would never recommend you, and 10 means I’ll tell everyone how great you are;
3. segments are distributed according to the answers: respondents from 0 to 6 (critics), 7–8 (neutrals), 9–10 (supporters or promoters);
4. calculate the percentage of each segment;
5. The percentage of critics is subtracted from the percentage of supporters - this is NPS.

You need to collect index data regularly, but not too often. Companies approach collection in different ways: once a month, once every six months, after each contact with the buyer.

A little more about the segments:

• supporters - give 9–10 points to the probability of recommendation, these are loyal customers;
• neutrals - give 7–8 points, these are indifferent clients, they will not recommend;
• critics - give 0–6 points, these are clients who did not like contacting the company so much that they are ready to leave negative reviews.

The lowest score is -100 when the company has only critics, the highest is 100 when all the company's customers become its supporters. A good indicator is a number above zero.

Example:
At the end of this article we ask readers: Are you ready to recommend this article to your colleagues or friends?
50% of readers give 9 or 10 points, 30% of readers give 7 or 8 points, 20% give from 0 to 6 points - the article seemed so bad to them.
We subtract: 50% - 20% = 30 - this is our NPS (and it’s pretty good).

Opponents of the index (and supporters of their metrics) write that one question cannot predict either the growth of the company or loyalty itself. The creators of the index answered this in advance: use additional questions. After answering, ask the clients: what did you not like, what caused such a high rating for our company?

“Are you ready to recommend us to your friends” is not the only possible question, it should not be so. It's easy to use, but effective research requires asking a follow-up question or two. For example, at the end of the article we could ask the critics: what was unnecessary in the article? What was missing from the article?

Net Promoter system, customer focus, bad and good profits

What you read in the previous part of the article is the past of the index, because over time it has grown from one issue to a system. People often forget to talk about this and leave the “glory” for NPS as just numbers, one of many in the company’s annual report. A misunderstanding of the tool usually gives rise to disappointment after the introduction of a metric in a company: “we tried it - no effect.”

Net Promoter System is a customer-oriented business strategy, which is centered on measuring customer loyalty using the NPS index.

The introduction of the system requires a business reorganization, because at every level of the company, from managers to executives, the goal must be to create a positive customer experience and establish long and strong relationships with customers. And this sounds abstract enough to be difficult when introduced into a real business, where the salesperson’s goal is to push through by any means necessary, the operator’s goal is to endure a shift, and the marketer’s goal is to submit a beautiful report.

But no matter how idealistic the goal of the system may sound, it works in Fortune 500 companies.

One of the key details of the Net Promoter system is the relationship between customer ratings and employee actions, or “feedback closure”, which ensures real work instead of meaningless index calculations. The company collects customer ratings, analyzes, contacts critical customers and gives feedback to employees - so they find out which client should have been worked with differently, and generally understand responsibility for each contact with customers.

The system separates two types of profit: good and bad. Good profits are made by actions that earn the trust of customers, bad profits come at the expense of trust and future relationships. For example, you can sell stale goods at a discount and upset customers with stale products - this is a bad profit, although it will allow you to get short-term benefits.

Application of NPS

You can also find specific NPS numbers for various business sectors and companies. For example, there are NPS benchmarks (paid access) for various industries from Satmetrix, a software developer for measuring the index. And here are the benchmarks from Npsbenchmarks (free access).

But benchmarks are good, but understanding your business is better. How to understand which NPS is good or sufficient?

Mike Gowen, co-owner of Delighted, writes:

• score from -100 to 0: most people have a negative experience with your company and advise others never to contact you;
• 1–30: normal score, but room for improvement;
• 31–50: This is where the majority lies. Companies from this layer care about the customer experience and most often make it memorable;
• 50–70: These companies care even more about customer service and are some of the most loved by customers;
• 71–100: The Holy Grail - a virtually unattainable ideal reserved for the world's best companies.

Another way to understand whether the NPS is high enough is to answer the following questions:

• Is your NPS higher than your competitors?
• Is it above zero?
• Is your score growing?

If you answer “yes” to all three questions, that's good. But that doesn't mean you can stop trying. The Net Promoter system has no end goal other than continuous improvement.

NPS (NetPromoterScore) is an index showing consumer commitment to a company, product, or service. Otherwise, the NPS loyalty index is called the index of willingness to recommend and make repeat purchases in a given company.

As a rule, the NPS index is measured several times throughout the year and several years. Continuous measurement of loyalty allows you to effectively work to gain a competitive advantage and improve your performance.

On Questionnaire, there are a huge variety of tools for collecting respondents’ opinions through surveys - e-mail mailings to the client base, surveys among members of Questionnaire’s own panel of respondents (suitable for large companies with a branch network throughout the country), etc.

An example of calculating the NPS loyalty index

For example, you received 100 answers to your question. 10 of them were in the range of “critics”, 20 were “neutrals”, 70 were “supporters”. Subtract 10 critics from 70 supporters. You will get a number of 60. This is your customer loyalty index.

However, if an internal indicator of, for example, 33 is considered bad, then the external one (compared to competitors) may turn out to be quite high when compared with the average loyalty index for organizations with a similar (similar) field of activity.

Benefits of Measuring Loyalty Using NPS

NPS statistical indicators can be directly correlated with the company’s success in the eyes of consumers. The index is used by large (Apple, AmericanExpress, JetBlue) and small companies due to a large number of advantages:

• Speed. One question is all that is required to calculate the indicator. You can create such a survey on Questionnaire in a matter of minutes, and conduct it in a couple of days.
• Simplicity. The Net Promoter Score uses common technology so it is easy for anyone to understand.
• Comparability. You can compare your results with those of your competitors, because hundreds of companies also use NPS.

Using the Questionnaire service, it is easy to measure the NPS customer loyalty index.

The NPS customer loyalty index shows the degree of satisfaction of your customers: how satisfied they are that they will recommend you to their surroundings. The calculation of the NPS index must be carried out constantly at some intervals in order to have an idea of ​​​​customer sentiment. We will examine this issue in more detail in our article.

NPS consumer loyalty index

This is an indicator that tells an entrepreneur how strongly his customers are committed to his product or his brand. More precisely, this indicator characterizes their willingness to make repeat purchases in your store (use your services again if you provide services).

Moreover, it shows not only how willingly customers will come to your store again, but how willingly they will recommend it to their surroundings - friends, relatives, colleagues, etc.

NPS loyalty index stands for “NetPromoterScore”. If translated from English literally, this means “Net Support Rate”, meaning, of course, customer support for your product or brand.

Adapted into Russian, this term is translated as “NPS Loyalty Index”.

Customers for life. How to build long-term relationships with buyers. Video

NPS index calculation

Calculating your customers' loyalty to you, your business or your product is quite simple. This is done in three stages.

1. First, you need to conduct a survey of customers, asking them one single question: “With what probability from 0 to 10 are they ready to recommend your company (product, mark, brand) to their environment?”

“From 0 to 10” is a ten-point scale, where extreme values ​​indicate:

• 10 – “I will definitely recommend your store (brand, brand) to all my friends, relatives, and colleagues!”;
• 0 – “I will never, under any circumstances, recommend you to my circle!”;
• From 0 to 10 – variations from “Never” to “Always, definitely”.

• Those who rated the likelihood that they would recommend your business to their surroundings at 9-10 points. In the terminology of the developers of the loyalty indicator, this category of clients is called “Promoters”, literally “Promoters”, that is, those who will definitely support and recommend your business to others;
• The second group are those who rated this probability at 7-8 points. These are the so-called neutral buyers;
• The third group is those who rated support for your brand with a probability of 0-6. In business terminology, this category of buyers is called “Detractors”. Literally translated from English, this term means “Slanderers” or “Those who distract”, that is, opponents of your brand, those who do not like what you sell.

When calculating the NPS index, you can not pay attention to the exact translation of the terms; the essence and importance of the loyalty indicator does not depend on them; they are given for general information.

3. The third stage is actually the calculation of the NPS index, which is the difference between those who will definitely support you and those who will not do this under any circumstances.

Calculation formula:

NPS Index = Share of supporters – Share of critics

Let's say you surveyed 100 customers.

Of these, 55 people (55%) answered that they would definitely recommend you to their circle.

Another 30 people (30%) said that everything is absolutely not important to them, they are not interested in anything, they are neutral about everything.

And the third group, 15 people (15%) are those who didn’t like you, who won’t recommend you, your opponents.

NPS indicator - calculation:

Index NPS = 55 – 15 = 40

The survey itself in order to identify loyalty of your customers can be done in the following ways:

• Survey directly on the sales floor, recording the answers;
• By offering the buyer a questionnaire, for example, at the checkout;
• By phone;
• Online on the company’s website (not only applies to online stores).

The latter method, by the way, is the most convenient for both the entrepreneur and the client, when you don’t have to waste time filling out forms and communicating with store employees; you can evaluate your attitude towards the company at any convenient time.

Advantages and disadvantages of the NPS index

The main advantage of measuring your customer loyalty index is that it is simple and accessible to any entrepreneur. The question asked of customers is extremely specific and does not require time to think, search for solutions and answer options.

Despite its simplicity, this method is quite informative. It shows quite accurately how your business satisfies your customers and clients.

The disadvantage of this method, according to experts in the field of marketing, is that it is still somewhat one-sided, so the assessment is made on the basis of two categories - those who support the brand and those who criticize it, when a large number of customers are neither the first nor the second. They do not consider themselves to be in the second category.

In addition, calculating the NPS index is one of the methods for assessing business performance. When developing important management decisions, experts and specialists recommend relying not only on this method, but also on the results of broader and more thorough research.

At the same time, it is necessary to calculate the loyalty indicator; this must be done constantly, with some frequency, in order to know how the attitude of customers towards your business is changing so that, if necessary, you can quickly make the right management decisions.

Increase customer loyalty with the Business.Ru CRM system. In the program you can save all information about communication with the client: telephone calls, correspondence, execution of contracts.

How to increase your NPS index

There are no recommended values ​​for this index; it all depends on the type of business and the current situation in it.

Some experts say that it should be no less than “50” and, if it is lower, it’s time to do something. For someone, more precisely, for some business and for some situation, the value “30” may be satisfactory.

General rule: the index should not be negative. In this case, it turns out that there will be more of those who are definitely in a bad mood towards you than those who are definitely in a positive mood.

In this case, it is urgent to take action. This means that it is necessary to come up with and implement one or another or several customer loyalty programs and loyalty increasing programs. There are many ways to do this:

1. Discount loyalty program. These are various discounts, discount cards, including those with the so-called CashBack, that is, cash back. This is when from each purchase a small part of its value, usually about 3-5%, is returned to the card holder (buyer);