Why Your Net Promoter Score Matters to Your Small Business

As a small business owner, you may always be on the lookout for ways to grow and improve your business. Gathering and analyzing customer feedback is a great way to do that. Your customers' thoughts and experiences regarding your business can show you areas of success as well as highlight areas that could do with some improvement. There are many different ways to collect this data. Here is a guide to using one of the most common methods.

What is a Net Promoter Score?

The net promoter score is commonly used by businesses to determine their success with customers. It measures how likely customers are to return to your business and/or refer it to others. Scores range from -100 to 100. The closer your score is to 100, the more likely customers are to return and refer others.

Customers respond to a single question using a scale of 1 to 10, where 0 is the worst and 10 is the best. A score of 0-6 makes a customer a "detractor," or someone who isn't likely to return or refer anyone to you. Those who respond with a 7 or 8 are "passive," and may or may not return or refer. Customers who select 9 or 10 are called "promoters." These are the customers who will return and refer others to your business. You can calculate your NPS by subtracting the percentage of customers who are detractors from the percentage of customers who are promoters. The result is your net promoter score.

How Does Having a High NPS Help Your Business?

While your customers may not know what your NPS is, or even what it means, they probably will know the reputation your business has in the local community. As a small business, your reputation in the community can have a very large impact on your success. Customers are more likely to visit if they've heard good things about your business. Having a high NPS often correlates strongly with having a good reputation. This means that boosting your business's NPS can come with a boost in your overall reputation.

How Can You Improve Your NPS?

As a business owner, you'll want to take steps to get your NPS as close to 100 as possible. That means getting as many of your customers to become promoters as possible, as well as moving as many detractors to passive or even promoter status. Both things can help improve scores. There are a couple of ways that you can go about achieving this.

First, you'll want to deliver excellent customer service each and every time. This helps make your customers feel valued and increases the likelihood that they'll tell others about their positive experiences. Even if a customer doesn't become a promoter, having a reputation for good customer service can help decrease the number of detractors. Having a lower percentage of detractors can boost your NPS just as much as increasing the number of promoters.

Second, you'll want to have an easy-to-navigate complaint resolution process. Frustration with getting their problems resolved can turn even the best promoter into a detractor if you aren't careful. You can prevent this by making it easy for a customer to get help with missing orders, broken products, or other needs. When a customer is able to get their problem resolved quickly, they're more likely to feel like your business cares about them. That can translate into higher net promoter scores.

Net promoter scores often match up with your business's reputation, which can have a strong effect on your success. Understanding what goes into your NPS, as well as knowing some ways that you can help boost your score, is a smart business strategy. Having happy customers means free word-of-mouth advertising, and can mean lots of new customers coming in the doors. Take the time to really focus on your NPS and see for yourself just how much it can help your business succeed.