Net Promoter Score (NPS) is a powerful marketing metric that helps businesses gauge customer satisfaction, loyalty, and the likelihood of recommending their services. For companies in the digital marketing space, including those in connected TV advertising, NPS can provide valuable insights into customer relationships, campaign performance, and growth potential. This guide will walk you through how to measure and improve NPS, ensuring that advertisers leverage it to enhance their customer experiences and optimize their performance in a highly competitive landscape.
What is Net Promoter Score (NPS)?
Net Promoter Score (NPS) is a widely used metric for measuring customer loyalty and satisfaction. It helps businesses assess how likely their customers are to recommend their products or services to others. The score is based on a single question:
“On a scale of 0 to 10, how likely are you to recommend our company/product/service to a friend or colleague?”
The NPS score is calculated by subtracting the percentage of customers who are detractors (score 0-6) from the percentage of customers who are promoters (score 9-10). The final score can range from -100 to +100.
How to Measure NPS?
To effectively measure NPS, follow these key steps:
1. Survey Your Customers
The first step in measuring NPS is to survey your customers. The simplest way to do this is by sending a survey email or using a platform that automates customer feedback. Along with the NPS question, consider asking follow-up questions to gather more context behind the score, such as:
- What is the main reason for your score?
- What can we do to improve?
- How can we better meet your needs?
These open-ended questions provide valuable insights into why customers feel the way they do about your service or product.
2. Segment Your Customers
It’s important to segment your customer base into three categories based on their NPS responses:
- Promoters (score 9-10): These are your loyal, enthusiastic customers who are likely to advocate for your service. They’re your best brand ambassadors.
- Passives (score 7-8): These customers are satisfied but not enthusiastic. They aren’t likely to spread negative feedback, but they aren’t necessarily passionate about recommending your service.
- Detractors (score 0-6): These customers are unhappy and may discourage others from engaging with your brand.
By categorizing respondents in this way, you can gain deeper insights into the satisfaction levels within your customer base.
3. Calculate Your NPS
Once you’ve segmented your customers, you can calculate your NPS score. Use the formula:
NPS = % of Promoters – % of Detractors
For example, if 60% of your respondents are promoters and 20% are detractors, your NPS would be:
NPS = 60% – 20% = 40
Your NPS score will give you a snapshot of customer sentiment and loyalty, which is particularly valuable for companies in industries like connected TV advertising and OTT advertising, where customer satisfaction is key to long-term success.
4. Benchmark Your NPS
To interpret your NPS effectively, it’s important to benchmark it against industry standards or competitors. This gives you a sense of where you stand relative to others in the digital advertising or TV advertising space. While NPS scores can vary widely between industries, a score above 50 is generally considered excellent, and a score above 70 is exceptional.
Why is NPS Important for Advertisers?
NPS can be a game-changer for advertisers, especially those in the digital marketing and connected TV advertising industries. Here’s why:
1. Customer Loyalty and Retention
NPS helps measure customer loyalty, which is crucial for advertisers looking to retain clients and reduce churn. In the competitive world of programmatic advertising, customer retention is often more cost-effective than acquiring new clients. By improving your NPS, you’re likely to build stronger, longer-lasting relationships with your customers.
2. Performance Marketing Insights
For companies in performance marketing, NPS can be a key indicator of how well campaigns are resonating with the target audience. If your NPS is low, it may suggest that your campaigns are not effectively addressing customer pain points or needs. On the other hand, a high NPS score indicates that your marketing efforts are likely succeeding in delivering value to customers.
3. Demand Generation
A high NPS score can also be a valuable tool for demand generation. Promoters are likely to refer others, leading to increased organic referrals and potential customers. By focusing on NPS, advertisers can create a cycle of positive feedback that drives growth and expands their reach.
How to Improve Your NPS?
Improving your NPS requires a strategic approach focused on enhancing customer satisfaction and addressing any areas of dissatisfaction. Here are actionable strategies for boosting your NPS:
1. Enhance Customer Support and Communication
Customers often become detractors when they feel that their concerns are not addressed properly. Providing excellent customer support and maintaining open lines of communication is crucial. For connected TV advertising platforms, this might mean offering timely assistance when clients face technical issues or navigating complex OTT advertising campaigns. Make it easy for customers to reach out and ensure that their queries are resolved quickly.
2. Leverage Data and Insights
Use the feedback from your NPS surveys to gather insights on what customers like and dislike. This data can help you pinpoint areas where your product or service may be falling short. For example, in programmatic advertising, if clients are dissatisfied with targeting accuracy or ad performance, you can refine your algorithms and offer better targeting solutions.
3. Personalize Customer Experiences
Personalization can significantly improve customer satisfaction. Tailor your services to meet the specific needs of individual clients. In the world of connected TV advertising, for instance, personalized content and ads based on viewing habits and preferences can make a huge difference in customer satisfaction. The more customers feel that their needs are being met, the more likely they are to become promoters.
4. Solicit Regular Feedback
Improving NPS isn’t a one-time effort—it requires continuous engagement with your customers. Regularly ask for feedback, not just when things go wrong but also when things are going well. By consistently measuring satisfaction and acting on feedback, you can identify and address issues before they escalate.
5. Reward Promoters
Reward your most loyal customers for their positive feedback. This could be through discounts, exclusive offers, or simply by acknowledging their loyalty. Not only will this help retain your best customers, but it may also encourage them to spread the word about your service, further improving your NPS.
6. Improve Product and Service Quality
If the underlying cause of a low NPS is product or service quality, addressing these issues head-on is crucial. In connected TV advertising, this could involve improving the ad delivery process, increasing targeting precision, or ensuring seamless integration with OTT platforms. A superior product or service naturally leads to higher customer satisfaction and a better NPS.
7. Focus on Building Trust
Trust is a key factor in customer loyalty. Make sure that your customers feel confident in your brand. Transparent business practices, honest communication, and delivering on promises will help build trust and lead to a higher NPS score.
Conclusion
Net Promoter Score is more than just a number; it is a reflection of customer loyalty and satisfaction, essential for growth in the competitive digital advertising landscape. So, what is NPS and why does it matter? By effectively measuring and improving your NPS, advertisers can enhance their customer relationships, optimize campaign performance, and ultimately drive long-term success. Whether you are in connected TV advertising or performance marketing, NPS offers valuable insights into what your customers truly think and how you can better serve their needs.