What is Net Promoter Score?
Net Promoter Score (NPS) is a metric developed by Bain & Company, a major consulting firm, and Satmetrix, a satisfaction research firm, as a metric to measure a company’s ability to grow and provide an early warning sign as to what kind of growth to expect in the future. Additionally, it helps businesses split customers into three groups (promoters, passives, and detractors) to help them know who to ask for referrals and segment customers by their needs.
To capture NPS, clients or customers are asked one simple question: “On a scale of 1 to 10, how likely are you to recommend [company name] to others?” Based on their answer, they’re split into one of three groups:
Promoters (9-10) are loyal enthusiasts who will keep using your services and refer others, fueling growth.
Passives (7-8) are satisfied but unenthusiastic clients who are vulnerable to competitive offerings.
Detractors (1-6) are unhappy clients who can damage your brand and impeded growth through negative word-of-mouth.
To calculate Net Promoter Score, simply take the percentage of clients who are promoters and subtract the percentage who are detractors.
Why is Net Promoter Score important?
Companies with high Net Promoter Scores grow at more than twice the rate of their competitors on average. Achieving and maintain a high NPS can help you to make your clients into your marketing department by turning them into promoters. It also helps you keep your services top-notch so that other methods of growth will come more easily.
Finally, using NPS allows you to know how to deal with different clients. It helps you know who to approach for referrals, who needs a little extra “wow” factor, and who is vulnerable to leaving your services.
How do I use Net Promoter Score?
A Net Promoter Score isn’t the end goal in and of itself—client growth and satisfaction is. Use NPS as a road marker to identify if you’re on the right track. When you begin a new exercise program, the first thing to do is set goals and track your progress. Otherwise, there’s no way to tell if you’re truly improving. Likewise, using NPS to track your progress helps you identify whether you’re truly making progress at improving the experience you provide to your clients.
NPS won’t help you much if you occasionally check it; you need to track it closely, gather feedback as to why clients give the answers they do, and use it to power decisions. The most successful agencies in our program are those that track trends over time and use this data to influence decisions, including compensating their caregivers based on client satisfaction scores.
As a caregiver, how much more compelled would you be to provide great care knowing that you’d receive a bonus if your clients gave high satisfaction scores?
Is there an Employee Net Promoter Score?
Yes. In fact, everything we’ve said about Net Promoter Score here applies equally to Employee Net Promoter Score (eNPS).
As long as the caregiver shortage continues, eNPS will be particularly important because it can help you measure and improve your ability to recruit new caregivers through your existing caregivers. (According to the 2018 Home Care Benchmarking Study, caregivers recruited through existing caregivers have the lowest turnover rates of any recruitment source.)
Why does Home Care Pulse use a 1-10 scale instead of a 1-5 scale?
Research by many outside companies has indicated that a scale with more options produces more accurate results. Many people who are very pleased with services are reluctant to give a perfect score to indicate that there is always room for improvement. A 1-10 scale provides a better option for them to give a less-than-perfect score while still giving a high score that classifies them as promoters.
Why are 5 and 6 detractors? Isn’t an average number okay?
In school, a 5 out of 10 is still an F. The purpose of Net Promoter Score is to identify the clients who are thrilled with your services. If someone talks about your agency in a lukewarm way, they may have different needs than someone who is already thrilled.
Why do clients’ scores sometimes not match up with their feedback?
For example, a client may say that they can’t think of anything that can be improved, but still rate your agency a 7 out of 10. In cases like this, they may simply be lacking the “wow” factor. Remember that 7 and 8 are passives—clients who are satisfied but not enthusiastic. They might say good things about your agency because their needs are being met, but it will take something above and beyond to turn them into an enthusiastic promoter of your services.
How can I compare my NPS to that of other businesses?
Net Promoter scores vary significantly by industry. It’s best to compare your NPS to your own historical score and to the overall home care industry NPS found in the Home Care Benchmarking Study.
Tracking Your Net Promoter Score
If you’re not using our service and are interested in learning more about tracking Net Promoter Score and managing your client satisfaction, schedule a free demo today to learn more. If you’re already a Home Care Pulse customer and have more questions about using Net Promoter Score, contact your Customer Success Manager today.
What other questions do you have? Let us know in the comments below!