Net Promoter Score (NPS) is a customer satisfaction metric that measures how likely customers are to recommend a company’s products or services to a friend or colleague. NPS is calculated by asking customers a single question: “How likely are you to recommend our product or service to a friend or colleague?” Customers are then scored on a scale of 0 to 10, with 0 being “not at all likely” and 10 being “extremely likely.”
NPS scores are divided into three categories:
Promoters: Customers who give a score of 9 or 10.
Passives: Customers who give a score of 7 or 8.
Detractors: Customers who give a score of 6 or lower.
The NPS score is calculated by subtracting the percentage of detractors from the percentage of promoters. For example, if a financial institution has 60% promoters and 20% detractors, its NPS score would be 40.
NPS is a valuable metric for financial institutions to use to measure customer satisfaction and identify areas where they can improve. By tracking their NPS score over time, financial institutions can see how their customers’ satisfaction levels are changing and make adjustments to their operations as needed.
Here are some of the benefits of using NPS in finance:
Improved customer retention: NPS is a strong predictor of customer retention. Companies with high NPS scores tend to have lower customer churn rates.
Increased customer acquisition: NPS can also help financial institutions to acquire new customers. Promoters are more likely to refer their friends and family to a company than passives or detractors.
Improved employee morale: NPS can also help to improve employee morale. Employees are more likely to be engaged and motivated if they are working for a company that has a high NPS score.
Here are some tips for using NPS to improve customer satisfaction in the financial industry:
Collect NPS feedback regularly: Don’t just collect NPS feedback once a year. Collect it regularly, such as after every customer interaction. This will help you to identify trends and patterns in customer satisfaction.
Segment your customers by NPS score: Segment your customers by NPS score to identify promoters, passives, and detractors. This will help you to target your marketing and outreach efforts to the right customers.
Close the loop with detractors: When you receive negative NPS feedback, be sure to close the loop by responding to the feedback and taking action to address the customer’s concerns. This shows customers that you value their feedback and that you are committed to improving their experience.
Use NPS feedback to improve your products and services: Use NPS feedback to identify areas where you can improve your products and services. For example, if you are receiving negative feedback about your wait times, you may want to look at ways to streamline your processes.
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