Customer loyalty is a critical success factor for any business, and there are many methods to measure, improve, and sustain customer satisfaction. Net Promoter Score (NPS) Analysis is an effective and commonly used tool in determining and enhancing customer loyalty. In this article, we will emphasize the importance of NPS Analysis, support it with current examples, and explain the formula logic in an understandable manner.

1-Why NPS Analysis?

NPS Analysis is used not only to assess customer satisfaction but also to understand customer loyalty. Essentially, customers are asked the following question: “Would you recommend our company to your friends and family?” Ratings are given on a scale of 0 to 10, categorizing respondents into three categories: Promoters, Passives, and Detractors. This information allows businesses to determine their levels of customer loyalty and shape their strategies accordingly.

2-How is NPS Analysis Done?

1. Defining Your Target Group:

Non-expert businesses in this regard often conduct this study without creating a sample group representing all customers in the target group and assume that the results are valid for all customers. However, this leads to incorrect conclusions because the results will not reflect the satisfaction of those who did not respond, did not want to respond, or could not be reached. Therefore, it is essential to select a sample group that represents all customers in the target group. It should be noted that NPS scores obtained from those who have allowed message receipt or callbacks by phone may not fully reflect the actual NPS scores.

2. Asking the Question:

Clearly ask customers, “Would you recommend our company to your friends and family?”

3. Response Categories:

Divide responses into three categories:

Promoters (9-10): Customers who strongly recommend your company.

Passives (7-8): Customers who are satisfied with your company but are not overly loyal.

Detractors (0-6): Customers who are dissatisfied with your company and have the potential to make negative recommendations.

4. Calculating the NPS Score:

NPS = (%Promoters) – (%Detractors)

5. Evaluation:

It should be remembered that NPS scores may vary by industry and customer segment. You can learn how sectoral NPS scores should be and how they should be evaluated from market research experts. Below are NPS categories and the NPS score ranges that should be according to some sectors for reference purposes.

Technology and Service Sector: NPS≥70 => High            50>NPS<70=> Medium       NPS≤50 => Low

Healthcare Services:                      NPS≥70 => High            50>NPS<70=> Medium       NPS≤50 => Low

Retail Sector:                                    NPS≥60 => High            40>NPS<60=> Medium       NPS≤40 => Low

Financial Services:                          NPS≥60 => High            40>NPS<60=> Medium       NPS≤40 => Low

3-Example:

A bank can use NPS Analysis to assess and improve customer satisfaction. For instance, they can utilize data obtained by asking NPS questions to customers through a post-service survey. Based on positive feedback from Promoters, they can strengthen customer service or make loyalty programs more effective.