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NPS Benefits: 8 Benefits of the Net Promoter Score


The Net Promoter Score (NPS) has been a critical metric in tracking customer loyalty since Fred Reichheld penned The One Number You Need to Grow in 2003.

But what are the benefits of the Net Promoter Score? And why does it continue to exert such an enormous influence in customer experience management?

In this article, we’ll take you through some of the key reasons why NPS remains the number one metric out there to help you to measure and improve your customer experience (CX). In short, it’s simple, flexible, and actionable—and it can be easily put to use to drive business growth.

But let’s start with the basics.

What is the Net Promoter Score?

NPS is a customer experience metric developed to determine a company’s level of customer loyalty. It’s based, in essence, on one question:

“On a scale of 0 to 10, how likely are you to recommend this company/good/service to a friend?”

Depending on the score they give, customers are classified as promoters (score 9 to 10), passives (7 to 8), and detractors (0 to 6). These scores are then aggregated into one number, which is the company’s NPS.

From there, you’ll need this formula for calculating your NPS score:

NPS = (% of promoters) - (% of detractors)

If your NPS score is -100, it means all your customers are detractors. If it’s 100, all your customers are promoters. (You can read more about how to calculate your NPS here.)

In B2B, NPS is the gold standard of customer experience metrics, and is used by almost 41% of companies. This usage far exceeds the second platform in line, Customer Satisfaction (CSAT), which is used by 26% of B2B companies, and Customer Effort Score (CES), which is used by just 11%.

Related Read: 4 Ways to Answer 'What is a good NPS score?'

What are the Benefits of Net Promoter Score?

There’s a reason for NPS’s reputation and loyal following. Making NPS a fundamental part of your customer experience management processes has tangible and material benefits.

1. It Offers Real Returns on Investment

According to Gartner, 80% of future revenue comes from 20% of existing customers. As industries and companies become more competitive, the crucial brand differentiator is the way in which they treat their customers.

Companies need to create exceptional customer experiences if they are to drive retention rates and monetize their customer base. Failing to do so results in churn and a loss in revenue.

Learn how to drive revenue growth with our guide to Account Experience.

2. NPS is Simple and Easy to Execute

NPS surveys are short (at least they should be), and are easy and quick to answer. This ensures high response rates. And they are surveys that can be conducted at any point along the customer journey—provided you have the right https://customergauge.com/what..., of course.

They can also be rolled out through different channels, including phone, SMS or web. Choose the option that is the most convenient for your customers and that will likely receive the best response rate.

For example, while many brands prefer to use email for surveys, customers actually seem to prefer the phone. According to CustomerGauge research, phone interviews have a 42% response rate, compared to 30% over email.

3. It’s Actionable

NPS data isn’t complicated. You’ll receive your customers’ comments and the reasons for their score in real-time, allowing you to act immediately to reduce churn and foster customer loyalty.

Actionable data also means you can dig deeper into root causes, solve problems together with your clients, drive new sales, and lift responsiveness by proving to your customers that their voice matters.

4. Results Transcend Individual Experiences

NPS provides a wider view of your customer experience with every aspect of your company.

CSAT and CES only really offer insight on a customer’s most recent interaction with your company. NPS, on the other hand, takes a broader, more holistic perspective, gauging sentiment on everything from your website to your end product and back again.

5. It’s Flexible

In many instances, companies only deploy NPS surveys once or twice a year. But increasingly, businesses are coming to acknowledge the value of using smaller NPS surveys more regularly. This tactic, often called “drip NPS”, helps you to keep track of customer sentiment on an ongoing basis, so that you can improve incrementally.

In fact, CustomerGauge research has shown a 5.2% increase in customer retention if relationship surveys are conducted every quarter.

Short and frequent is often the way to go.

6. It Allows You to be Both Proactive and Reactive

In ensuring you become aware of large and persistent problems, NPS helps you implement solutions proactively so that these issues don’t happen again. That said, if a situation demands an immediate, reactive response, real-time NPS data can help you put out fires quickly and effectively.

7. It’s Useful to Everyone

With its -100 to +100 scoring system, NPS is easy for people at every level of a business to understandfrom the frontlines of customer service to the boardroom. This helps to foster internal NPS buy-in and spurs collective effort to improve it over time.

8. It Supports Future Growth

NPS data gives companies the power to turn customers into predictable recurring revenue.

By optimizing NPS feedback with Monetized Net Promoter, companies are equipped with even better tools to help customers stay longer, spend more, buy additional products, and refer new customers.

While NPS is a powerful tool that B2B companies interested in reducing churn and increasing revenue can’t neglect, it doesn’t work in isolation.

NPS is just a number, unless you make the data you gather work for you by acting on it, monetizing it, and using it to stimulate growth.

Discover New Content: 10 Best NPS Softwares for B2B

What is Monetized Net Promoter and How Does It Change Net Promoter?

Monetized Net Promoter is the future of NPS.

It’s part of Account Experience, CustomerGauge’s proprietary adaptation of the traditional Net Promoter System, and is designed to help you turn NPS from a customer research tool into a tool that actively accelerates revenue growth.

Monetized Net Promoter examines your NPS and tracks it alongside bottom-line metrics.

This involves pushing your Net Promoter System beyond loyalty and into the realms of revenue, retention, referrals, and up-sells and cross-sells.

Account Experience is based on three key steps: Measure, Act, and Monetize and Grow.

In this stage, reach out to customers, discuss their concerns, and tell them what you will do based on their feedback.

This simple act may encourage them to stay with you. Studies conducted in the banking sector suggested that 56% of customers who left a particular company were prepared to change their mind if their banks had only reached out to try and keep them.

  • Monetize and Grow. Monetizing and growing your NPS takes place when you actively measure your retention rate, measure and analyze your referrals, and attach your customer’s annual revenue to the NPS score they left you to identify opportunities for growth.

For many B2B brands with high numbers of customers, tying revenue gains to NPS seems daunting. But it’s really worth the investment.

Imagine never being blindsided by a churning account? Or identifying $6 million in referral revenue for your sales team?

Setting goals for growth can help. Our research shows that businesses that set NPS targets grow twice as fast as those that don’t, and yet 21% of companies still aren’t putting these measures in place.

Monetizing your NPS with Account Experience enables you to recognize the value of each of your customers. And that helps you to drive retention, referrals, and repurchases. Into the future, keep looking for opportunities to up-sell and cross-sell among your promoters as another way of increasing your bottom line.

Learn more about this process in our ebook: NPS 101: Retention Management to Combat Churn

Get More Benefits from NPS with CustomerGauge

You don’t have to do all of this alone. In fact, we don’t recommend that you do. CustomerGauge is the founder of Account Experience software and methodology, and we're here to help.

Find out more by exploring our comprehensive B2B NPS & CX Benchmarks Report.

Or book a meeting with our team to discuss it further.

Next Up: NPS vs CES vs CSAT: Which Customer Experience Metric To Use?

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