The NPS Index is a factor that indirectly examines customer satisfaction and loyalty. This index is especially important for public relations managers in the field of marketing. One of the most important reasons why the NPS Index is popular in businesses is its ease of use. Besides, it can be a factor for predicting the growth of a business.
Concept of NPS
The Persian equivalent of NPS is the net promoter index. In fact, this index is looking for people who advertise a business among their friends and acquaintances and suggest the use of certain business goods and services to others. Therefore, the purpose of this index is to evaluate how many customers of a business will be willing to advertise and promote our business.
The Reason for the Importance of the NPS Index
One of the issues influencing the decision to buy a new product or use a certain service is a survey of the people around you and measuring their level of satisfaction. It may even be said that most people make decisions for their purchases according to the opinions of others.
Using the NPS index structure to measure customers provides very important and useful information to business owners. In the following, we discuss some of the reasons for the importance of this index:
1. Measuring Customer Loyalty
Finding and measuring customers loyal to our brand can be done through this index. A customer loyal to the brand always prioritizes buying from our brand and even recommends it to others. The information obtained in this way about loyal customers helps business owners to identify their main and loyal audience and ways to satisfy and keep them satisfied.
2. Efforts to Improve
When we get the list of loyal customers and dissatisfied customers using this index, we can work on our dissatisfied customers and find out the reason for their dissatisfaction. For example, we can allocate a section for customer surveys so that they can freely state their reasons for satisfaction or lack of satisfaction. As a result of this work, the organization can understand in which areas it is strong and in which ones, it has weaknesses and what measures it should take in order to grow, improve and eliminate its weaknesses.
3. Referral Marketing
This style of marketing is mostly seen in cyber space. In the virtual space, we come across pages that, after buying and using a product, introduce it to their followers, and in this way, if the introducer is famous and trusted, in 70% of the cases, the introduction leads to a purchase.
Advantages of NPS Index
1. To be Economical
Because this index does not have the complexity of other evaluation systems and does not require strange infrastructure, with its very low cost, its use will be accessible as soon as possible. If we have a correct analysis of the results of this index, we will get a general and favorable view of our customers and their relationship with our business.
2. Simplicity in Design, Response and Evaluation
Questionnaires and surveys designed in the NPS index are not made up of vague and complicated terms. Rather, with a simple and common language, it simplifies both the response for customers and the review and evaluation for employees. In addition, due to the simplicity of this method, answering it will take a short time. Therefore, even if our target community is limited, relying on this method, our business will be on the right and desirable path.
3. Increase Customer Loyalty
If the results of measuring this index are properly analyzed, we can increase customer satisfaction and loyalty by using appropriate solutions.
In general, all measurement and evaluation systems have both advantages and disadvantages.
1. This indicator may sometimes not be as accurate and specific as it should be. The design of the questions may not be very precise and high quality. During its investigations, the organization should examine the reasons that cause the customer to ignore our brand and seek to solve the problem.
2. We cannot improve our business solely by relying on this index. Rather, there should always be positive changes to ensure our success.
Up To Sum
NPS is one of the easiest ways to measure customer loyalty. The nature and purpose of this index is to check whether the customer is satisfied with the goods and services offered to him/her or not. And does it recommend our brand to others or not? Therefore, to obtain correct information about our business performance, using this method will be helpful.