How the Net Promoter Score helps you to increase loyalty
The idea of the Net Promoter Score is fairly recent and was introduced in 2003 by Fred Reichheld in the management magazine “Harvard Business Review” as “One number you need to grow”. Nowadays, it is one of the most important metrics for measuring customer loyalty and satisfaction towards a brand or a company. Let´s take a closer look at this concept. What´s the Net Promoter Score definition and how do you calculate it?
What is the Net Promoter Score?
The Net Promoter Score is an index that is used to gauge both customer satisfaction and their willingness to recommend a company’s product. Ultimately, the Net Promoter Score is based on one simple question:
“On a scale of 1-10, how likely is it that a customer will recommend my company/hotel to a friend or colleague?”
Calculating the Net Promoter Score in the hotel business
Based on a review of 1-10, guests are divided into three categories: Detractors, Passives and Promoters.
- Detractors: Guests who give a review of 6 points or less. They are not too impressed with the hotel and are not likely to become regular guests. Critics may also damage the reputation of your establishment through negative word-of-mouth advertising.
- Passives: Neutrals give reviews of 7 or 8 points. They are reasonably satisfied with the service received, but could easily switch to one of your competitors. It can be assumed that this type of guest has neither a negative nor a positive influence on other customers’ purchasing decisions.
- Promoters: Guests who love your establishment and give it a score of 9 or 10. They are not only of higher value than your average guest, they are also the best advocates for your establishment. Great recommendations are the best form of free advertising!
The Net Promoter Score is calculated from the difference between Promoters and Detractors:
NPS = Promoters (in %) – Detractors (in %)
An example: Your hotel is reviewed positively (9 or 10 points) by 80% of your guests. 10% of the surveyed give it a neutral score (7 or 8 points) and 10% give it a negative score (6 or fewer points).
The Detractors are substracted from the Promoters. Passives are ignored in the calculation.
80 – 10 = 70
In this example, the Net Promoter Score for your business is 70.
How to use the Net Promoter Score
Due to its simplicity, the Net Promoter Score is an attractive tool. It can be used practically for all types of companies. A simple email NPS survey with just the one question mentioned above will be enough to gather relevant data. If you wish, an open text field for the guest to go into more detail about their review can be placed after the question.
This is an easy way to collect valid feedback from your guests. As the question is the same in all surveys, it is simple to compare the results across locations or outlets. Today, the NPS is often used together with Customer Experience Management (CEM). It is supposed to help you drawing qualitative conclusions from the solely quantitative data of the survey. This means that Detractors can be identified more easily to tackle the problem. Promoters can also be targeted to encourage other guests.
An all-in-one solution – Increase Your Net Promoter Score with Customer Alliance
If you’re being absolutely honest, how do you stand in your efforts to satisfy your guests? Do you take every opportunity to improve your reputation by using modern tools such as NPS or CEM? Especially for small hotels, it it is extremely difficult and time-consuming to work on all fronts at all times.
Our user-friendly solution offers you the opportunity to easily capture your NPS. All you have to do is ask your guests how likely they are to recommend you on a scale of 1-10 and then calculate your Net Promoter Score. We recommend that you use our personalized questionnaires to ask your customers for more concrete feedback. In combination with the NPS, you can identify and optimize weaknesses in your service or product.
In addition, analysis function allows you to truly understand the feedback of your guests. Filter your reviews based on key topics such as breakfast or room service and saves countless hours of manual work.
Would you like to learn more about the NPS and how it can help you drive satisfaction and loyalty? Then schedule your free, personal consultation with one of our experts!
>> Why not get in touch today to arrange your free consultation?
