In this episode, we talk about a single-question survey that measures customer experience.
In the previous episode, we talked about the only metric that matters to any business and that is your customer lifetime value and customer lifetime value is directly correlated with customer experience. And this makes sense. Right? The better the customer experience you have, the more likely customers are going to spend money with you, more money with you, and stay longer with you.
So how do you measure customer experience? Where there's this one metric that was created by a strategy consulting company called Bane, which is one of the top three consulting firms, and where my younger brother is actually a partner and they came up with this metric called the net promoter score, or NPS. And your net promoter score measures customer experience and can predict how fast your business will grow.
So you might have seen this survey before. The net promoter score is a single-question survey. So it's really easy to do. And the question is: How likely is someone to recommend your brand to a friend or a colleague? And it goes from a scale of 0-10. And if this person scores a 10, If they write down a 10 for how likely they are to promote your brand, then they're extremely likely to promote it obviously right. And um if they are not at all likely then they would put down a zero. So this scale is divided into three different sections.
People who score a 9 or a 10, then they are extremely likely to promote your brand. So we label them promoters and obviously, we don't know if they're promoting or not. This is just the likelihood that they will be promoting. Anyone that scores a 7 to an 8. Our passives, these are people who are prone to being stolen from your competition. They're so so about your business. They might not recommend it. They might recommend um they really don't care too much. Anyone that scores a 6 and below all the way to a 0. These are detractors. These are people that can damage your brand. They do not like your business and they will likely be vocal about it.
So it's split into three different sections. You have your promoters, your passives, and your detractors. To get your net promoter score, what you do is you survey all your customers. And let's say that you had 100 surveys, um, and out of the 100 let's say that 50 people put a 9 or a 10. So they are promoters. And let's say that 50 people put a 1 or a 2 and they are detractors. So essentially, if you want to calculate your NPS score, you take the percentage of promoters, which is 50% and you subtract the percentage of detractors, which is 50% and you get an NPS score of zero. So what does that actually mean? The higher your net promoter score is, the better your brand is doing. But this score is not done in a vacuum. There are industry benchmarks because certain industries will have a higher NPS average than other industries.
For example, no one likes ISPs, internet service providers, you have Comcast time Warner. It's such a pain to deal with. They have horrible customer experience and an NPS score for internet service providers Is actually a -7. What's interesting is Elon Musk is coming out with his own internet service provider, Starlink, which is his satellite internet. And it'll be interesting to see how he scores across the industry because I have a feeling that he's going to put a lot of emphasis onto customer experience and he will likely have a customer experience. Net promoter score that's way above -7.
So you're not promoter score. It can go from a range from negative 100 all the way to 100. And at the bottom of the list that you can guess our Internet service providers that are negative seven at the top of the list, surprisingly, our education and training companies who score around a 71 and digital marketing agencies who score around the 61 NPS score and you have something in between.
So you can look up what your industry is, what the industry benchmark is for NPS, and see how you can start benchmarking yourself against the industry number. So that's how your net promoter score works. It is a measurement of customer experience and this is probably one of the most important metrics that you want to start tracking. And if you don't have a benchmark for your industry, let's say you're creating a blue ocean, then how to use the score. Will you still want to track your score? And you're essentially optimizing to always be increasing the score so you consistently are serving your customers with this one-question survey, seeing how you do and you're trying to improve your NPS, which would be a good predictor of how fast your business will grow. Hope that helps. This is Robin Copernicus. Boom. Bam, I'm out.
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