Measuring the love in your business - youre Net Promotor Score
What is your net promoter score, and why is it essential in building value to your business?
Your Net Promoter Score, NPS affectionately referred to, is one of the most effective ways to uncover how satisfied and loyal customers are to your brand, product, or service. It’s a great start towards adding creditability towards a future business sale and the love for your business
A good net promotor score is derived from detractors vs promotors.
Promotors are those customers who “love “you, and
Detractors are those who are just friends or not in love enough to promote your business. The two are thrown in the mix to work out your score.
Net Promoter Score – who developed it and why
The net promoter score system was established by Fred Reichheld in 2003. Fred was a partner at Bain & Company. He created a new way of measuring how well an organization treats the people whose lives it affects—how well it generates relationships worthy of loyalty. He called that metric the Net Promoter Score
Of course, everyone wants a high NPS score but doesn’t despair if it is low. Either way, your NPS is an opportunity to make improvements for your business.
You can then calculate your NPS using the following formula:
NPS= % of Promoters — % of Detractors
The experts say a good score is 30. You can check the calculations at survey sites like Surveymonkey etc.
Developing an NPS program for your business.
Does your business use this method to measure the love for your business? If not, why not develop an NPS program. Start small, and you can create a more extensive NPS program as you gain your confidence and results.
Here are our suggested plan to undertake your own NPS program and act on the results:
- Ask your customers for NPS feedback at the right time
- Provide a good survey program to get your score
- Evaluate the Score results including a deep dive as to why, good, bad and the ugly.
- Start the strategy as to how to communicate with detractors to uncover reasons for a detractor’s low score towards your business
- Meet promoters to identify areas where you keep improving and ask them to be advocates of your business
- Improve your level of service and delivery of your product offering
- Talk to staff as to how to work on concerns raised by detractors
- Undertake regular NPS checks with customers to evaluate progress
Regardless of your NP score, turn your Promotors into people that can advocate for your business. The best way to do this is to ask them for a google review. A google review adds credibility to your business offering. It’s a known fact people rely on google reviews when making a purchase decision.
Your NPS also helps in the business exit strategy. In the business sale process, the demonstration of a high NPS means customers are happy. A high score gives confidence to a potential business acquirer that your future stated sales and ultimately the profit of the business is achievable and believable. This leads to a better sales outcome
Start measuring the NPS love
Most small businesses would be unaware of the NPS process. Some may even be scared of knowing what they already may be suspect. However, a strong NPS activity can help build a business. Often led by an external advisor to help ensure your NPS program kicks the right goals. We are happy to talk to you about your NPS and how it will add value to your business and, ultimately, credibility to justify future revenue streams to potential buyers.
Your NPS is one tool that can develop value in your business. Understanding who loves you in business is part of your pathway in growing and the eventual sale of your prized asset.