Modern marketing is complex, but data is the key to success. Data helps intelligent marketers grow their business and keep customers happy. Out of all the measurements marketers use, the Net Promoter Score (NPS) is especially valuable. It provides a deep understanding that can help with both strategy and customer relationships. The online Master of Business Administration (MBA) with a Specialization in Marketing program from the University of North Carolina Wilmington (UNCW) helps students with this vital skill. Understanding the Net Promoter Score is essential for developing effective marketing strategies.
Understanding the Power of NPS
NPS is a powerful tool that gauges customer loyalty through a single, yet impactful, question: “How likely are you to recommend our brand to a friend or colleague?” Customers answer with a score between 0 (meaning they wouldn’t recommend the brand) and 10 (meaning they’d highly recommend it). Based on their score, they are then placed into one of three categories.
- Promoters (scores 9-10): customers who enthusiastically endorse the brand
- Passives (scores 7-8): customers are somewhat satisfied but not actively engaged
- Detractors (scores 0-6): customers are unhappy and may spread negative reviews
The NPS score comes from subtracting the percentage of detractors from the percentage of promoters. A higher NPS score shows a stronger and more loyal customer base, with a greater chance of organic growth through positive word-of-mouth recommendations.
The Product Marketing Alliance (PMA) emphasizes the importance of using NPS data to guide strategic marketing decisions. They advocate a two-pronged approach:
- Contextualize NPS with voice of customer (VOC) data. Qualitative VOC feedback, such as comments left alongside NPS scores, provides valuable context to understand the “why” behind the numbers. For instance, a low NPS score might accompany complaints about a specific product feature.
- Visualization is key. Transforming NPS data into charts and graphs allows for easier identification of trends and patterns. A sudden drop in NPS score, for example, might need a closer look into VOC data to pinpoint specific customer concerns.
By combining NPS data with VOC feedback and clear visualization, marketers can understand customer opinions and make data-driven decisions to improve their marketing strategies.
Leveraging NPS for Customer Retention
Software company InMoment highlights the effectiveness of NPS data in boosting customer retention efforts.
- Identifying detractors. NPS identifies unhappy customers (detractors) allowing marketers to proactively reach out and address their concerns. Resolving these issues can potentially convert detractors into satisfied customers.
- Targeting passives. Passives represent a group of customers at risk of becoming detractors. Identifying them through NPS allows marketers to tailor personalized campaigns to increase engagement and loyalty, potentially converting them into promoters.
By proactively addressing both detractors and passives, marketers can significantly improve customer retention rates and create a more loyal customer base.
CustomerThink, a digital platform that brings together business leaders, explores how NPS data can act as a springboard for business growth. Their vision highlights two key applications:
- Target the right audience. Understanding which customers drive high NPS scores allows marketers to personalize their efforts toward attracting and retaining those valuable demographics. This approach ensures efficient use of marketing resources, maximizing the return on investment.
- Product development insight. NPS data can reveal valuable information about customer needs and preferences. By aligning product development, businesses can create products and services that resonate with their target audience, fostering brand loyalty and driving business growth.
NPS is a powerful tool that goes beyond simply measuring customer satisfaction. When used effectively, it encourages marketers to make data-driven decisions, improve customer rendition and drive business growth. Programs like UNCW’s online MBA in Marketing prepare future marketing professionals with the skills to use these tools and create successful marketing strategies.
Learn more about the University of North Carolina Wilmington’s online Master of Business Administration with a Specialization in Marketing program.
