Net Promoter Score, or NPS, is an important metric used by many firms to determine how many of their customers would recommend their product or services to others. In real estate, a business based around relationships and cemented by loyalty between partners, it is an incredibly important metric, yet one that perhaps too few firms actively track. In this article, we’ll share some tips and strategies for how to operationalize NPS at your property firm.
Overview OF NPS
Originally developed by Fred Reichheld, a Bain & Company consultant and expert in loyalty, NPS quantitatively measures the number of net promoters a firm has - in other words, promoters minus detractors. By providing this figure, NPS aims to give managers an empirical sense of how well their business is satisfying their customers, with the complete package of product, experience, and support taken into consideration.
NPS can be measured by asking just one simple question: any variation of “How likely is it that you would recommend our product?” It could be about an event, a physical product, an experience, or even the support process after a user submits a service ticket. The NPS figure itself is arrived at by sharing such a survey with a 10-point scale. According to NPS, promoters will rate a 9 or 10, passive respondents a 7 or 8, and detractors a 6 or lower. To arrive at NPS, the surveyor simply subtracts the percentage of detractors from the percentage of promoters.
While NPS is often most useful when used to compare different products or experiences for the same company side by side, anything above 50 is excellent. But NPS numbers get more valuable the more times you collect them. Knowing that event A was a 58 but event B was a 42 could result in useful insights, especially when additional survey questions drill down into the “why” of it all.
“As a large segment of buildings today are valued based on the occupiers lifetime value, rather than the brick and mortar, it’s crucial for building owners to have a full understanding of the intention of occupiers to stay and renew their leases. That loyalty to your brand will be a deciding factor of your business’ overall success in the short-and long term,” says Anna Gäfvert Veloso, Head of Community Management at Spaceflow.
For real estate companies, there are many ways to use NPS to add value across the entire tenant life cycle. For instance, asking tenants whether they would recommend your space longitudinally (immediately after leasing, during their tenancy, and during the renewal or even move out process) could reveal useful insights into what in your property business is working and what isn’t. Alternatively, the maintenance process provides a great opportunity to collect NPS data, after ticket resolution.