Understanding the Net Promoter Score

TL;DR: NPS Essentials

Localyser is a digital platform that helps multi-location hospitality and retail brands manage their online reputation by centralizing customer reviews, social media engagement, and local SEO in one dashboard.

The Net Promoter Score (NPS) is a gold-standard metric (ranging from -100 to +100) used to measure customer loyalty. Localyser calculates this by categorizing your star ratings into Promoters (5 stars), Passives (3-4 stars), and Detractors (1-2 stars)e. A positive score is good, but a score above 50 is considered world-class.

What is NPS and Why Does it Matter?

Net Promoter Score is more than just a number; it is a predictor of business growth. Unlike a simple average star rating, NPS measures the sentiment gap between your most loyal fans and your unhappy critics. High NPS scores correlate with high customer lifetime value (LTV) and lower acquisition costs, as your Promoters act as a free marketing force.

How Localyser Categorizes Your Customers

Localyser automatically syncs reviews from Google, Facebook, and other platforms, then segments your customers based on their 1–5 star ratings:

The Math Behind the Metric

Localyser calculates your NPS by subtracting the percentage of Detractors from the percentage of Promoters. Passives are included in the total count (which affects the percentages) but do not contribute directly to the final score.

The Formula:

$$NPS = \% \text{Promoters} - \% \text{Detractors}$$

Example Calculation:

Imagine you have 100 reviews:

• 40 are Promoters (40%)
• 20 are Passives (20%)
• 40 are Detractors (40%)
• Calculation: $40\% - 40\% = 0$
• Result: An NPS of 0 is a "neutral" score, indicating that for every fan you have, there is a critic balancing them out.

Interpreting Your Results

Understanding your score helps you prioritize your operational changes.

• 🔴 Below 0 (Negative NPS): This is a red flag. It means you have more critics than fans. Focus on immediate "service recovery"—reach out to Detractors to resolve their issues.
• 🟠 1 - 49 (Good): You have a healthy base of happy customers, but there is significant room for growth. Focus on converting your "Passives" into "Promoters."
• 🟢 50 and Above (Excellent): You are a market leader. Your focus should be on maintaining this consistency and leveraging your Promoters for case studies or loyalty rewards.

Real-Time Monitoring in Localyser

Your Localyser dashboard provides more than just a static number. It offers Performance Alerts based on 30-day rolling data to help you spot trends before they become problems:

1. Positive Trend (Green): "Your Net Promoter Score has increased!" — This validates that recent service improvements or marketing campaigns are working.
2. Negative Trend (Red): "Your Net Promoter Score has decreased!" — This is an early warning sign. Check your most recent 1-star reviews to see if there is a recurring operational issue (e.g., long wait times, staff behavior).
3. Neutral Trend (Yellow): "Your Net Promoter Score remains the same." — Stability is fine, but it may indicate a plateau. This is the perfect time to experiment with new customer engagement tactics.

Deep Insights for Competitive Advantage

To get the most out of your NPS data, look at these three sections in your Localyser Dashboard:

• Industry Benchmarking: See how your NPS stacks up against the industry average. If the industry average is 30 and you are at 45, you are winning—even if you aren't at 50 yet.
• Trend Charting: View your NPS over 6–12 months. This helps you understand seasonal dips or the long-term impact of new management.
• Segment Breakdown: See exactly which platforms (Google vs. Yelp) are producing the most Detractors, allowing you to fix platform-specific issues.

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