What is a Net Promoter Score and why should your business care about it? Well, simply put a Net Promoter Score (or NPS) is a way to understand how other consumers view the company you are about to work with.
While NPS is very different from sites like Yelp or Google reviews, the fact still rings true that positive brand recommendations and word of mouth advertising is important. According to a survey by ModernComment, 2/3 of consumers would be willing to spend 13% more with a company they think provides excellent customer service. They also found that 20-50% of all purchasing decisions are made based on a word-of-mouth recommendation.
An NPS is an indirect word-of-mouth advertisement that we want you to be aware of. Check out our infographic below to understand how it works, why you should care about it, and how you can start using the NPS survey for your business.
Full Infographic Text:
Why We Care About Net Promoter Scores – And Why You Should, Too
Reliability, Trust, Integrity
First of all, what is the Net Promoter Score (NPS)? In the simplest of terms, the NPS is how likely customers are to recommend a certain company or brand.1 The company receives a single number ranging from -100 to +100, the higher the better.2
How Does it Work?
The NPS is based on one simple question that companies ask their customers: “On a scale of 0 to 10, how likely would you be to recommend us to a friend or colleague?”
Customers will fall into three categories – promoters, passives, and detractors.
Loyal customers that are extremely likely to refer your business to friends and colleagues.1
Satisfied but unloyal customers that are unlikely to promote or criticize your business.1
Dissatisfied customers that can damage your reputation through negative word-of-mouth.1
How is it Calculated?
For example, a company surveys customers and receives the following results.[Illustration: Graph outlining the percentage of promoters (83%), Passives (7%), and Detractors (10%)]
83% promoters minus 10% detractors equals 73 NPS
A score of 50 to 80 is considered good.3
What Does it Mean for You?
Understanding a company’s NPS can help you feel confident when making a decision to do business with them. For example, in the financial space looking at lenders’ NPS scores can help you determine who you can trust.[Illustration: Direct Capital’s NPS Score of 73]
Standout Companies Have Standout Scores
Companies with reputations for innovation and excellence tend to have higher NPS scores than their industry averages. 456[Illustration: Graph showing industry averages for banks, retailers, credit card issuers, insurance companies, and airlines and the companies in those industries whose NPS scores stand out]
Work with a Lender You Can Trust
Direct Capital has been helping small businesses across the country access the capital they need for over 20 years. We are a trusted name in the industry, as our NPS shows, and are backed by some of the most reputable partners in the world. For your lending needs, turn to the business that will work with you every step of the way and get you the cash you need when you need it. We’re a lender you can trust – and we look forward to proving it to you time and time again.
Speak to a consultant: 866-777-0117
Or visit us at: www.DirectCapital.com/NPS
4 Direct Capital NPS survey results from April 2014 – April 2015
5 2014 Satmetrix Net Promoter Industry Benchmark Report