Net Promoter Score (NPS) is the most important guest satisfaction metric used by Loopon.
It can be seen as a balance between loyal promoters of your hotel and dissatisfied detractors, where if NPS is positive you have more promoters and if NPS is negative you have more detractors.
While the other factors measured by Loopon are important to understand why you get a certain NPS and what you can do to improve it, the NPS itself and especially changes in the NPS is a very good tool for keeping track of guest loyalty.
Questions and categorisation
The first question on a Loopon questionnaire is always How likely is it that you would recommend <name of your hotel> to a friend or a colleague?. This question is referred to as The Ultimate Question by Fred Reichheld. The guest selects a score from 0 (Extremely unlikely) to 10 (Extremely likely). Depending on this answer the guest is categorised into one of the following three groups, based on their expected behaviour:
NPS Calculation
Calculation example:
Say that 100 guests leave the hotel, all responding to the "How likely to recommend..."-question on the Loopon questionnaire:
- 65 guests respond with a 10 or 9 (Promoters)
- 20 guests respond with a 7 or 8 (Passives)
- 15 guests respond with a 6 or lower (Detractors)
The resulting NPS will be: 65% (Promoters) - 15% (Detractors) = +50 (NPS)
The calculation can be interpreted as what reputation you have among this group of 100 guests. You have a positive reputation in this case. The reputation or NPS is presented on a scale from -100 to +100.
Purpose of the Net Promoter Score
In the era of internet and public review sites, word of mouth marketing and satisfied customers are more important than ever. The NPS gives you an insight into how efficient this channel of marketing is for your hotel.
One of the most important things Fred Reichheld revealed in his research is that there is a clear correlation between an increase in NPS and a future increase in revenue.
In other words, it is important to note that your current Net Promoter Score is not the most interesting factor. No matter if you work at a sub zero NPS hotel or a hotel with NPS 80.0, there will be things you can do to improve your NPS and as such improve your revenue.
A very practical example of this is if a group of 8 people are deciding on a hotel. Some of them do not really have an opinion about what hotel to choose. Some do not want to choose a certain hotel due to reputation, brand or experience. But one or a few guests want to choose a certain hotel they like, have heard of or read good things about. That last hotel will be the one getting 8 guests. All of the reasons for choosing that hotel has come down to if the members of the groups and the NPS of the hotel.
Guest loyalty, word of mouth, online reviews, personal experience and brand are all measured as part of NPS as opposed to a classical satisfaction score (CSAT) that will only measure previous satisfaction and as such will only include one of several parameters that predict future growth.
Scientific basis
Fred Reichheld proposed the Net Promoter Score in his book The Ultimate Question in which he presents his customer loyalty research. He measured among other things how customers actually behave in comparison to how the respond to customer satisfaction questionnaires.
Integration in Loopon
The Net Promoter System is tightly integrated in Loopon in multiple ways. One of the most helpful features is that when you are browsing your feedback inside the Feedback Tab you can immediately see the categorization of guests in the Loyalty column as follows: