THE NET PROMOTER SCORE (NPS)
Net Promoter Score (NPS) measures the loyalty that exists between a provider and a consumer. The provider is the entity that is asking the questions on the NPS survey. The consumer is the customer, employee, or respondent to an NPS survey. It gives an indication of the growth potential of your company and your product. It gauges the customer’s loyalty to the company. It serves as an alternative to traditional customer satisfaction research programs that were tedious to manage.
There are two basic approaches to collecting the Net Promoter Score (NPS).
- NPS bottom-up and
- NPS top-down
This is where the survey is targeted towards the customer involved in the transaction. The bottom-up NPS surveys are generally conducted to understand a customer’s experience at a very specific interaction or touchpoints. Here, the goal of the survey is to know how satisfied the customers are with a specific process/ transaction/ touch point.
It is not aimed to evaluate the overall customer loyalty to your company but it measures customer’s likelihood towards a particular process. The Bottom-Up NPS can act as a frontline feedback tool that can diagnose customer problem about transactions. These feedbacks help an organization in taking corrective measures to rectify the problems with existing processes. A typical Bottom-Up NPS directly refers to a transaction, such as:
Based on your recent billing experience, how likely are you to recommend us to a colleague or client on a scale of 0 to 10?
Transactional NPS surveys are carried out in both Business-to-Consumer B2C and Business-to-Business B2B organizations. Having said that, a B2C organization will have a larger number of transactional NPS as compared to that a B2B organization. Since the frequency of transactional NPS surveys are huge (they are generally conducted every weekly or twice a week), it is very important that you reach out to your customers at the right time.
You are always required to reach out to your customers just after any interaction so that the customers don’t forget that transaction (or the experience associated with it).
Also, it is equally important to identify the important touch points for which you are aiming to conduct the Transaction NPS surveys. Too many surveys might irritate the customers.
- It gives immediate feedback to the company since it is frequently done hence the best corrective measure can be put in place immediately.
- It is very simple to use compared to other survey approaches
- It requires a lot of information frequently hence some customers get tired giving the feedback frequently
THE TOP-DOWN NPS
The Top-Down NPS give you an overview about how your customer feels about their entire journey with your organizations. These surveys generally help you understand the likelihood of your customer recommending you to her friends or colleagues. In a B2C set-up, relationship NPS surveys let you compare your organization with your competitors. It also depicts the overall health of the company in terms of customer retention and repeats purchase.
Relation NPS surveys generally target to know the overall customer experience of your customers. Hence, the survey question is straight forward as:
How likely are you to recommend us to a colleague or client on a scale of 0 to 10?
Globally an NPS leader is usually the market leader. For example, companies like, Apple, Nike, Netflix and Amazon have superior NPS score as compared to their competition and they are market leaders in their respective fields as well.
The Top-Down NPS surveys are generally conducted quarterly, half yearly or annually.
- Its results can be compared from to time hence one can know the progress of the organization
- It focuses more on the relationship rather than transactions
- It requires standard data so that comparisons can be made.
How to choose between Bottom-Up and Top-Down NPS
Bottom-Up NPS will help you identify who loyal customers are but a Top-Down NPS will let you know the areas of improvement at each touch points. Bottom-Up NPS can get influenced by the Top-Down NPS but the Top-Down NPS is independent and has a score of its own. For example; A customer might give you a poor rating for your worker but might give you a good rating for your company.