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Last updated on: Oct 12, 2022

8 Reasons Why NPS and eNPS Matter

by LeTeisha Newton

Estimated Reading Time : 4 mins

Net Promoter Score—known as NPS, or eNPS when it’s applied to employees—is an important metric gauging customer or employee loyalty. While many people are familiar with it and use it regularly to inform their loyalty strategies, it may not always be completely clear why it’s such an important metric to follow.

We’ve been breaking down different CX metrics, like the all-important CSAT, to really understand how these metrics can change your customer experiences and employee experience. We’d like to continue this conversation by looking at the importance of NPS now that you know more about what it really means and how to calculate NPS. You may be asking yourself: what are the benefits of NPS? Or, is investing in NPS even worth it? In this piece, we’ll highlight the biggest benefits of this key metric.

CSAT NPS

1. Streamlined tracking

As you continuously gather data from your eNPS or NPS survey, over time you will begin to see trends emerging from your customers or employees. Analyzing these patterns, you can identify potential weaknesses and strengths while also being aware of customer experiences across their journey.

2. Stronger relationships

NPS is a measure of how loyal and likely to promote your organization your customer is. Because of this, the more enthusiastic customers who support your organization will be in the promoter range. Understanding passives and detractors, and how to bring them up on the scale, can lead to greater profitable relationships with customers. It’s also linked to their satisfaction, which increases as their NPS score goes up (and vice versa).

On the employee side, the eNPS leads to greater employee engagement. Employee engagement increases are linked with employee satisfaction increases. Of course, employee satisfaction and employee engagement are also linked with customer satisfaction. So Net Promoter Score is great not just for customer success, but employee and organizational success as well.

3. Improved online reputation

Online reputation management (ORM) is imperative to most organizations—and particularly to service industries like healthcare, where 79 percent of patients consider online reviews before choosing their healthcare provider. Controlling the narrative about your company online is a powerful way to interact with customers and improve customer satisfaction. NPS is a great sign for promoters and detractors, as they will be more likely to submit reviews.

On the employee side, workers become consumers when they are not at work, and can often be trusted promoters of your organization as well! Their direct interaction with customers (and how engaged they are during these interactions) will also affect the company’s online reputation.

4. Reduced customer churn

Through dedicated practice to improving customer loyalty and satisfaction, you are also working toward reducing the number of customers who never return to your company. Higher NPS scores can help avoid churn in the first place. And lower customer churn equals greater expansion revenue.

Higher eNPS typically indicates employee engagement and satisfaction. As such, these are the employees that will be proactive in customer service and support, increase customer experiences and satisfaction, and generate greater revenue.

5. More customer advocates

The nature of the NPS is to discover who your promoters are. Promoters are amazing because they also help with advocacy. In today’s world, customers love interacting with companies who are authentic and real, but they don’t want you to sell to them. Other customers can do that for you, advocating on your behalf and sharing recommendations, which translates to a type of customer acquisition that is usually cheaper than traditional sales and marketing techniques!

6. Expanded revenue opportunities

We touched on this a bit in reducing customer churn, because as customers leave, they aren’t spending any more dollars with you. However, as the NPS score increases, customers are more willing to continue to spend more with you as they don’t churn.

7. Simplified benchmarking

By monitoring your competitor or industry benchmarks for NPS, you can also gauge how you’re doing in comparison to your competitors. This type of analysis should be performed in conjunction with other data and research for deeper insights, but even at a glance, comparing NPS can be helpful with strategy.

8. Increased customer satisfaction

Customers who are willing to promote your business are happy with it. These are, essentially, your ideal customers. As improving customer experiences or satisfaction can improve NPS, so too can a rising NPS improve CX and CSAT scores.

There are many benefits to working with NPS to inform strategy for CX and EX. The more you understand its nuances and what it affects, the more innovative ways you can improve your customers’ experiences!

Now is the best time to get feedback from your customers and employees with powerful analytics to drive action. Don’t know where to start? We’re here to support your efforts!

Tags:

calculationeNPSNet Promoter ScoreNPSsurveyTips
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