Net Promoter Score, or NPS, is a client satisfaction metrics that is widely used by businesses who want to make customer support a priority. It is increasingly used in professional services as well as the market shifts towards a more client-centric place.
Asking clients how likely they are to recommend you gives 2 distinct advantages. You can:
- Know whether individual clients are likely to bring in more work (and if not, address the reasons)
- Track and benchmark your performance over time.
What's the underlying logic?
NPS is a proxy for your client base's propensity to recommend you to others. Word-of-mouth remains and will continue be the most powerful way to grow your business.
Sustainable businesses have happy clients who add more value than simply paid invoices - they bring in other work by referring others. They are referred to as "Promoters" of your business - and they are absolutely vital to its success.
Most businesses will have a large number of "Passive" clients. They are generally content with their service, but they aren't raving fans.
People who are unhappy with service received are referred to as "Detractors". They are people who are bad-mouthing you to their friends, family and colleagues. Typically, Detractors will tell more people than Promoters (unless you specifically ask satisfied clients if they'll promote you), so it's really important that your quality control is on-point.
How is it calculated
Our survey contains a question:
"How likely are you to recommend [firm] to a friend or colleague?" with a rating scale of:
- 0 - Not at all likely
- 5 - Neither likely nor unlikely
- 10 - Extremely likely
Clients who rate their likelihood of recommendation as a 9 or 10 are classed as Promoters.
Clients who rate 7-8 are classed as Passives.
Those that rate 0-6 are Detractors. This has high face validity - it's rare that someone who rates their service as 6/10 or less is particularly satisfied - they'll usually have several reasons why they are reluctant to recommend your firm to others - and they are likely to communicate this to their contacts.
The Net Promoter Score = % Promoters - % Detractors.
It's a great metric to track over time because those who improve their net promoter score have significant returns in terms of organic growth.
In fact, referred clients have up to 20% higher life time value than other clients.
- Track NPS over time to see the impact of your client service initiatives
- Your FirmChecker dashboard tells you how you're doing on key drivers of recommendation. That is, the behaviours you should focus on to make sure clients are more likely to recommend you. Prioritise your efforts based upon how you're doing in these drivers:
- Understanding clients' needs
- Respond to each and every review that comes in.
- Promoters - ask them for a referral!
- Passives - see what they said about how you can improve and ACT! Better still, tell them what you've done in response to their concern.
- Detractors - get in touch with them ASAP to resolve their issues. This will stop them spreading negative word-of-mouth and may turn them into Promoters