Highlights

• Understand the fundamentals of NPS, a vital metric for gauging customer loyalty and satisfaction in today's retail landscape.
• Explore the significance of NPS in retail and its impact on consumer shopping habits, empowering you to stay ahead in a competitive market.
• Discover the types of NPS and learn how to implement and analyse them effectively for your eCommerce business.
• Harness the NPS feedback loop to identify improvement areas, measure customer satisfaction over time, and benchmark against competitors.
• Implement NPS strategies like surveying all customers, measuring pre and post-delivery NPS, and analysing NPS by RFM segment, product/category/brand, and location.
• Elevate your DTC business by mastering the art of monitoring NPS, driving growth, and fostering lasting customer loyalty.
• Ready to revolutionize your business with NPS? Connect with our sales team to embark on this transformative journey.

Understanding Net Promoter Score

Before digging into its importance, let’s first grasp the concept of Net Promoter Score. Net Promoter Score is a metric used to gauge customer loyalty to a company or brand. It is measured by asking customers a simple question: On a scale of 0 to 10, how likely are you to recommend our product/service to a friend or colleague?

Based on their responses, customers are categorised into three groups:

Promoters (Score 9-10): They are your loyal customers who are highly satisfied with your product/service and are likely to recommend it to others.

Passives (Score 7-8): These customers are satisfied with your offering but might not be as enthusiastic as promoters. They are neutral and could easily switch to a competitor.

Detractors (Score 0-6): These customers are unhappy with your product/service and are unlikely to recommend it. They may even spread negative word-of-mouth.

To calculate the Net Promoter Score, subtract the percentage of detractors from the percentage of promoters. The resulting score can range from –100 to +100, with a higher score indicating higher customer loyalty and satisfaction.

Types of Net Promoter Scores

Primarily, there are two main types of NPS. These are:

• Transactional NPS: It is based on specific interactions or transactions between the customer and the company, such as a purchase, customer service inquiry, or delivery experience. Transactional Net Promoter Score provides real-time insights about customer experience that help you address the issues and capitalise on positive interaction.
• Relationship NPS: It is based on the overall relationship between the customer and the company over time. It incorporates multiple interactions and touchpoints. It gives a holistic view of the customer-brand relationship to aid in assessing long-term customer satisfaction.

Both types of Net Promoter Score offer valuable insights into customer satisfaction and loyalty. However, they may be used differently depending on the goals and focus of the business.

Net Promoter Score in Retail

In the retail industry, NPS can be a significant changer for businesses looking to improve customer experience and drive growth. By regularly monitoring Net Promoter Score, retailers can identify strengths and weaknesses, benchmark themselves against competitors, and implement targeted strategies to enhance customer satisfaction and loyalty.

Why do you need to Monitor NPS for your eCommerce?

You need to Monitor NPS for your eCommerce for the following reasons:

Customer Feedback Loop

Net Promoter Score provides a direct channel for customers to voice their opinions and sentiments about your product or service. You can establish a feedback loop by regularly monitoring your Net Promoter Score, which aids in understanding what customers love about your brand and where improvements are needed.

Identifying Areas for Improvement

Detractors offer valuable insights into areas of weakness in your business. Their feedback highlights pain points, issues with product quality, customer service shortcomings, or any other factors that may hinder satisfaction. By addressing these issues promptly, you can prevent customer churn and improve the customer experience.

Measuring Customer Satisfaction Over Time

NPS is not a one-time measurement but rather an outgoing process. By tracking Net Promoter Score regularly, you can observe trends and changes in customer sentiment over time. This longitudinal view helps you assess the impact of any changes or initiatives implemented to improve customer satisfaction.

Benchmarking Against Competitors

Net Promoter Score serves as a benchmark for comparing your business’s performance against competitors. Understanding where you stand relative to your peers provides valuable context and helps you set realistic goals for improvement.

Driving Growth and Loyalty

Satisfied customers are more likely to become repeat buyers and brand advocates. By focusing on improving NPS, you cultivate a loyal customer base that generates recurring revenue and helps attract new customers through positive word-of-mouth recommendations.

Master the long-term growth of your business with conversion rate optimisation.

How to Implement and Analyse NPS for your eCommerce

Implementing and analysing Net Promoter Score for your eCommerce business involves several key steps:

• Survey All Customers

  To calculate the Net Promoter Score, you must survey an accurate sample size of your customers. You need to follow an NPS process to reach all subsets or groups of customers to generate the accurate Net Promoter Score because surveying only a subset or group will present an artificially high or low Net Promoter Score. It will make it difficult to take corrective action. For example, if you sell your product or services to registered and guest users, then to get an accurate NPS score, you must survey both groups independently to get the correct score.

  Measure Pre and post-delivery NPS

  It is crucial to measure pre and post-delivery NPS. Besides, some brands only measure post-delivery NPS. However, you must measure and calculate the Net Promoter Score after delivery if you want an accurate and deeper understanding of the customer experience on your app and website.

  It will let you determine whether your brand clings to the under-promise, over-deliver principle. The gap between pre and post-delivery NPS is known as the ‘Delivery Gap’ that can be calculated as

  Pre-delivery NPS – Post-delivery NPS = The Delivery Gap (Delta NPS)
  

  If the pre-delivery NPS is higher than the post-delivery NPS, it means that you have over-promised and under-delivered. Therefore, to determine if there is a gap between these two phases, you must measure both:

  Pre-delivery NPS – You ask customers about their experience on your website or app during the purchase process.

  Post-delivery NPS – You enquire about customer experience with the product (during transit and after receiving the products).

  For example, Let’s say a woman buys a gown for a wedding from an online clothing store. In this case, for better NPS results, the store can send her two surveys:

  • For the pre-delivery: Did our gown colour and size chart help you find the correct size?
  • For post-delivery: Did the dress fit you well, or are there any flaws?

  The first question explores the woman’s sentiment based on her experience on the site. The second question helps you know her experience with the product you delivered (whether it was good or better than her expectations).

  You can further send her follow-up qualitative questions that provide more clarity about the score she gave.

• Net Promoter Score by RFM Segment

  Analyse Net Promoter Scores by RFM (Recency, Frequency, Monetary) segments to understand the preferences and behaviours of different customer segments. Moreover, RFM analysis and segmentations allow you to identify valuable customers.

  RFM analysis reveals data anomalies that allow you to identify the most crucial customer groups when you balance the customer acquisition cost with the margins they generate.

  RFM segmentation discovers the most important types of customers by grouping them based on their RFM score. It allows you to target specific customer groups based on their behaviour, thus generating higher response rates, improved customer lifetime value, and increased loyalty.

  The primary benefits of monitoring NPS by RFM segments are:

  • You can allocate customer service resources based on customer value, which results in improved relationships with the most valuable customers.
  • By creating a loyalty program, you can improve customer retention and deliver unique experiences that consider the opinions of your most valuable customers.

• NPS by Product/Category/Brand

  You must break down your NPS scores by brand, product, or category to identify which offerings are driving customer satisfaction and which may need improvement. Net Promoter Score relates to purchase intent in the future.

  Therefore, analysing the NPS by product/category/brand aids you in seeing beyond the revenue each item brings and acknowledges why several products are more successful than others.

  For example, if there is a marketing issue (overpromising issue) or an issue related to specific products or product categories you sell. You can reduce customer churn, modify marketing campaigns, and improve your product lineup by observing the Net Promoter Score through this angle.

• Net Promoter Score by Location

  Understanding NPS scores by geographic location to identify regional differences in customer satisfaction and create marketing and sales strategies accordingly. NPS by location helps you track how customer satisfaction influences delivery times.