Should your start-up be tracking Net Promoter Score

Should your startup be tracking Net Promoter Score?

AvatarCloudCherry | September 12, 2016

Happy and loyal customers are essential for any business, be it a startup or enterprise, at every stage of its lifecycle. The more ‘happy clients’ your business has, the more referrals you get through them and the more business you will generate.

Furthermore, loyal clients have a higher lifetime value, help bring down churn rate and maintain a steady flow of revenue.

And the Net Promoter ScoreSM is a simple-to-use metric that can help you determine precisely customer loyalty by asking your customers: how likely are you to recommend our business to their friends and family?

Understanding the Net Promoter Score


The Net Promoter Score or NPS® is one simple, powerful metric that reflects the loyalty of your customer base. A negative NPS means you have issues with customer satisfaction, while a positive NPS means that you have loyal customers who will probably recommend your business to their social circle.

A company focused on offering a great customer experience will have a higher positive Net Promoter Score. For example, in 2013, Apple had a NPS of 69, which meant that their customers were highly loyal and recommended Apple to their family and friends.

NPS has been used widely by corporations since 2003, to assess how loyal customers are. However, it’s also become a valuable metric for startups. Here’s why.

The Importance of NPS for Startups

For a startup, maximizing the value of each customer is essential to success. The more value you can get out of one customer, the higher your profit margins, even taking into account customer acquisition costs.

To do so, you have to make customers happy so they eventually become loyal to your brand. This comes with the obvious benefits of maximizing customer lifetime value and increasing customer retention rates, but also reduces customer acquisition costs as word-of-mouth advertising is more effective than any other form of marketing.

And the Net Promoter Score allows you to measure how many of your customers are loyal, how many couldn’t really care less and how many are dissatisfied with your brand.

By constantly measuring the NPS, you will be able to not only keep a constant finger on the pulse of your customers, but you’ll also be able to identify areas where you can improve so you can turn more of your passive customers (the ones that don’t care one way or the other) and detractors into promoters.

Using NPS Effectively

Though many startups are aware of the value of the Net Promoter Score, in many cases, it’s not used properly. While NPS is a valuable metric, it can be misleading if not managed effectively.

The first step is to make sure you are polling your customers on a regular basis. NPS usually changes over a longer period of time, but it’s still worth getting feedback from your customers at least every quarter.

Also, don’t just focus on the numbers. You also need to read the text answers themselves as they provide valuable insight into what the problems might be, just as they can confirm what you are doing right.

Another issue you need to consider is the fact that NPS can be used for specific parts of the customer journey and not necessarily just as a general metric. So, instead of just asking general questions, poll customers on specific interactions they’ve had with your brand.

For example, instead of just asking a general: “how likely are you to recommend our brand to your friends and acquaintances?”, take a more specific approach for the particular area you want to analyze, such as:

“After interacting with our customer service team, how likely are you to recommend our brand to family and acquaintances?”

This approach will allow you to measure specific areas of the customer journey and experience, including sales, support, training and more. You could even measure the NPS of each of your sales representatives to determine how well they are doing.

Another area where NPS can be useful is to determine employee engagement by asking how likely an employee is to recommend working for your company to a friend. These scores can be powerful, especially when broken down by department. Again, you should be reading the text comments to get better insight into what the issues might be.

The employee NPS score can even be tied into performance evaluations, though you will have to consider an approach that will allow you to maintain confidentiality.

The Net Promoter Score is an invaluable tool for any startup because it can help you identify areas of improvement to increase the number of loyal customers you have. Invariably, this means a higher retention rate, lower customer acquisition costs, increased lead generation based on word-of-mouth advertising and, overall, higher revenues and profits thanks to the increased lifetime value of your customers.

Without measuring NPS, you will be flying blind. And in the digital age, information is vital. So, instead of struggling, wondering whether you’re going down the right path, ask your customers, start measuring your net promoter score and you’ll find the results invaluable in growing your business and ensuring its success.