What is a Good Net Promoter Score, and Why is it Important?

What is a Good Net Promoter Score, and Why is it Important?

Client referrals are essential in any business. And for caregiver agencies, client referrals are the number one marketing source. But sadly, most agencies run their caregiver business so badly that clients do not refer them.

What your clients say about your home care agency matters more than any other marketing source. And since it's more expensive to attract new clients than to keep existing ones, you need to know what your existing clients think of your services. 

To do this, you need to find a way to track your customers' loyalty and satisfaction and see what they think about your brand (brand perception). And this is where a Net Promoter Score (NPS) comes in.

This piece will discuss what a net promoter score (NPS) means, why it's important for homecare businesses, and how you can calculate your NPS.

What is a Net Promoter Score?

The NPS is a simple but effective metric that can give you a lot of insight into your brand perception, customer loyalty, and client satisfaction. It measures how likely customers are to keep doing business with your brand and recommend your services.

The NPS is a valuable tool for businesses of all sizes, as it can help you evaluate your customer loyalty and the health of your home care agency. 

A positive NPS indicates that a company has more promoters than detractors, while a negative NPS suggests that a company has more detractors than promoters. 

The Benefits of Having a Good NPS

NPS is a useful tool to evaluate business performance because it reflects how well the business meets its customers' needs over time. A good NPS can provide your business with some other benefits, including:

1. Improved Client Satisfaction

One of the traits of a successful business is client satisfaction, and you must understand their behavior, needs, and complaints. A good NPS can help you improve client satisfaction levels by providing feedback on what your clients like and don't like about your products or services.

2. Increased Customer Loyalty

A good NPS can also lead to increased customer loyalty, as clients who are happy with your products or services will likely stick around and continue doing business with you. And obviously, "an ounce of loyalty is worth a pound of cleverness."

3. A Better Understanding of Clients' Needs

A good NPS can give you better insight into what your clients need and want from your business, which can help you improve your offerings and make them more appealing to prospects.

4. Increased Brand Awareness

A good net promoter score can also increase brand awareness for your business, as satisfied clients are more likely to recommend you to others and bring new customers aboard. You can also use your NPS to measure the effectiveness of your marketing and customer service efforts.

5. Increased Profitability

Ultimately, these benefits can improve your business's bottom line, as happy customers mean more repeat business and positive word-of-mouth for your company.

What is a Good Net Promoter Score for Homecare Agencies?

A good NPS goes a long way in letting you know if your clients will keep using your services or recommend them to their friends and family. The greater your agency's NPS, the more likely your customer referrals will turn into new leads, resulting in more income for your organization.

A good net promoter score indicates that:

  • Customers are happy with the product or service. 

  • Customers are willing to talk about your product or service with others.

There are two approaches to determining what a good net promoter score is:

  • Through an Absolute Net Promoter Score: This entails comparing your company's score against scores from other companies outside your industry to determine whether it is "good."

  • Through a Relative Net Promoter Score: This entails evaluating your score against other businesses within your industry. To measure customer satisfaction, you should compare yourself to your competitors. For example, if your competitor's NPS is above 40 and yours is below that number, you need to improve your NPS.

While your NPS should be above that of competitors within your industry, measuring your success relative to the competition is not always the best approach. 

For example, what if your competitors are generally doing poorly? So, rather than getting obsessed about the actual score, you should be more concerned about the percentage of clients in each satisfaction segment—promoters, passives, and detractors.

Whatever the case, you must maintain an NPS that is above 0. So, even though an NPS of -10 is greater than that of other competitors in your niche, falling below zero might be depressing and raise concerns about the quality of the customer experience.

In general, an NPS of less than 0 indicates that your company has a lot of areas to work on. Any score above 0 is considered "good," as it suggests that your clients are likely loyal. An NPS above 20 is regarded as favorable; An NPS above 50 is considered exceptional, and an NPS above 80 is world-class.

 

How to Calculate Your Net Promoter Score

You can calculate your NPS using just two questions:

  1. How likely would the client recommend your company/product/service to a friend or colleague?

  2. What is the main reason for their answer?

To calculate your NPS, you need to survey your clients and ask them how likely they are to recommend your business on a scale of 0–10. From there, you can group clients who responded to the survey into these three categories:

1. Promoters

Clients who respond with 9 or 10 are considered "promoters." Promoters are people who rate your business highly and strongly support it. They tend to be the most engaged in your business, buy more from you, and recommend you to their friends.

2. Passives 

Clients who fall between 6 and 9 are called "passives." Passives are people who rate your business slightly below the promoters and support it only somewhat more than the detractors. They may remain loyal for a while but can be easily swayed away by competitors.

3. Detractors

Clients who respond with 0–6 are "detractors." Detractors rate your business very low because they are not satisfied with it and are less likely to recommend your company to others or buy from you again.

But how do you calculate your NPS? The net promoter score is calculated by subtracting the percentage of detractors from the percentage of promoters. Here's the net promoter score formula.

Your Company's Net Promoter Score = % PROMOTERS - % DETRACTORS

Here is a good net promoter example: 

You surveyed 500 customers and found that 250 were promoters, 200 were passive, and 50 were detractors. First, you need to calculate the percentage score of each category.

Promoters as a percentage = 250/500 x 100 = 50%

Passives as a percentage = 200/500 x 100 = 40%

Detractors' percentage = 50/500 x 100 = 10%

So, your net promoter score would be 50 – 10 = 40.

The poorest possible score is -100, which is the score you will get if every customer is a detractor, and the best score is 100 if everyone is a promoter. However, both of these results are rare in reality.

While the promoter score is a helpful metric, it's important to note that it shouldn't be used as the only decision-making metric for your business. Use it as one piece of the puzzle when trying to understand your customer satisfaction levels.

How to Increase Your Company's Net Promoter Score: 9 Different Ways

The overall NPS for a caregiving company can be affected by several factors, including existing client satisfaction, company reputation, product quality, interaction with existing clients, and new client acquisition rate.

If you're looking to increase your company's NPS, you should do the following:

1. Measure Your Net Promoter Score Regularly 

You can't improve what you don't measure. By measuring your NPS regularly and accurately and keeping track of your score, you can identify problems and trends early, fix them, and improve your score before they become more significant.

2. Focus on Improving the Caregiving Experience for Your Promoters and Passives

What can you do to make a faithful customer's experience even better? Here are a few ideas:

  • Make it Easy for Them to Give Feedback: This includes short online surveys after they perform an action, feedback boxes that are simple and easy to use, or reaching out directly.

  • Take Their Feedback Seriously: When you get feedback from your clients, you need to respond so they know that you take their feedback seriously. Everybody wants to be heard.

  • Make Rapid Changes Where Possible: Take your client's feedback seriously and inform them of the new changes that stemmed from their feedback. This way, your promoters, and passives will feel that their voices are heard and are more likely to use your service again.

3. Work on Reducing the Number of Detractors 

Detractors are not interested in your services, and as high as 95% of detractors will share bad experiences to discourage their friends, family, and colleagues from using your caregiving services. 

Since detractors have the greatest negative effect on your company, you must strive to reduce their number to the nearest minimum. 

Some of the ways to reduce the number of detractors include:

  • Acknowledging their feedback promptly (about 50% of clients in the detractor phase will stop doing business with your company if you don't do anything about their feedback).

  • Improving your customer service

  • Strengthening customer relationship

  • Providing a unique value in your caregiving service

  • Increasing the quality of caregiving services

  • Offering more competitive pricing

  • Preventing other clients from becoming detractors by stopping similar events from recurring.

In addition to the steps above, address feedback in 24 hours or less and gain context of the complaint before jumping in to provide a solution. 

Be polite and professional throughout the interaction, provide a solution, and follow up after resolving the situation. 

Don't take your clients’ complaints personally, don’t get defensive, and don't make promises you can't keep. Also, don't tell your clients that they are wrong, and don't ask questions you know are annoying.

4. Keep an Eye on Your Competition

In business, your competitors can sometimes help you know what you should and should not do. So, if you own a caregiver agency, you should keep an eye on your competition. You should know how their NPS compares to yours and which competitors have the best NPS. Here are some tips to help you keep an eye on your competition:

  • Compare your NPS with your industry average

  • Find out the score within your region and compare

  • Consider their survey channel and keep an eye on their survey methods. Survey channels can have a significant impact on the results.

  • Use your baseline NPS as your benchmark and compare your score over the last six months to see if you are improving.

5. Optimize Your Survey Methods and Question

An optimized NPS survey will lead to high-quality data and insights into your customer's experience. You can ensure your survey methods are top-notch by choosing convenient channels for your clients and asking easy, straightforward questions.

Here are some key things to remember when optimizing your NPS survey methods and questions.

  • Your survey should be short, straightforward, and easy to understand. No one wants to answer a long, drawn-out survey. 

  • Go beyond the simple common question. Avoid questions that have default public answers. 

  • Ask questions that are easy to answer and relevant to your clients. 

  • Avoid asking biased questions (such as gender-based questions) as they can discourage clients who could have given sincere answers and reviews that will help your NPS.

  • While you want your surveys to be user-friendly, you should frame your questions in a way that will elicit helpful responses.

  • Send NPS surveys at strategic points and times throughout the customer experience and cycle. For example, you can make it a quarterly survey or a biannual form to fill out. Don't bore your client with repeated surveys.

 

6. Hold Regular Meetings and Share Regular Insights With Your Caregivers

Sharing regular insights across your caregiving organization can help to build a culture that is customer-focused. Also, it can help ensure that everyone is on the same page with your company's caregiving goals.

Not only will this help improve the customer experience, but it will also help boost your company's bottom line.

So how do you go about sharing regular insights across your organization? Here are a few tips:

  • Let your caregivers know your overall business goals and how they can help you achieve them.

  • Share insights about milestones achievements and how the company is doing with them often so they can keep up with your progress.

  • Ask about their challenges while dealing with clients and organizations and provide insights into how they can solve them.

  • Ask for their input on new ideas to improve their on-the-job skills.

  • Organize a caregiver recognition day where you can appreciate caregivers with extraordinary performance. It will motivate others to do their best and the awardees to do more in their job.

7. Perform Root Cause Analysis for Detractors and Passives

Performing a root cause analysis for detractors means looking closely at why your customers are unsatisfied or passive with your services. The six steps to perform a root cause analysis are:

  • Define the event. Are you looking to analyze the cause of high passives, detractors, or low promoters? 

  • Find out the root cause of a problem or event. 

  • Research how to solve the problem and compensate for the damage.

  • Verify how effective the solution can be.

  • Take strategic action to execute your solution.

  • Learn from any serious issues within the root cause.

So, how do you take action? Here are a few tips:

  • Look at the data: Review customer feedback and surveys to identify trends.

  • Talk to customers: Get on the phone or in person to hear customers' stories firsthand.

  • Talk to your caregivers: Conduct interviews or focus groups with your caregivers to get their perspectives on the problem.

  • Identify root causes: Once you have gathered all this data, start looking for patterns. 

8. Use the NPS Survey Feedback to Train Your Caregivers.

NPS feedback can give insight into where your caregivers need improvement and training. For example, suppose clients say your caregivers cannot deal with medical-related issues, respond to emergencies, or handle themselves in stressful medical situations. In that case, your caregivers might need training in handling medical crises like heart attacks or near-drownings.

Here are a few tips on how to use NPS feedback to train your staff:

  1. Use NPS data to identify areas of improvement

  2. Train your staff on how to address these areas of improvement

  3. Make your caregivers get more practice

  4. Measure the results.

9. Make Structural and Policy Adjustments and Observe What Works.

While it's beneficial to do things consistently and accurately, you may sometimes need to improvise by making structural and policy adjustments. Changing how you do things can reduce the number of unsatisfied clients. 

Some of the structural and policy adjustments you should make can include changing your recruitment strategy, pricing, or even how you present your brand on social media. When you make these changes consistently over time, you can observe what works and what doesn't. 

 

Final Thoughts

Getting a Net Promoter Score remains vital for gauging your customer satisfaction rate and how well you can retain them. And without it, you're operating in the dark regarding some of the most important feedback.

Once you have your NPS, you can use it to guide customer analysis and influence company policy, products, or services. While you should have an NPS higher than your competitors, you should be more concerned about the percentage of promoters, passives, and detractors clients. That said, you should aim for an NPS that's more than 40.

Knowing your NPS is good for business! So, if you don't have an NPS survey, you should get one today!