Net Promoter Score (NPS) is one of the most powerful tools to measure customer satisfaction and loyalty in any industry. It can be a crucial metric for any hospitality business striving to offer the best guest experience in the market. So how does Net Promoter Score for vacation rentals actually work? We’ve summed it all up for you below.
Net Promoter Score (NPS) is an indicator used to measure customer loyalty to a brand, product or service. It gauges whether customers are likely to evangelise a product or service by asking them a single question: “On a scale from 0 to 10, how likely are you to recommend this company/product/service to a friend, colleague or relative?”
Ranging from -100 to 100, the NPS is calculated based on the feedback received from customers. Respondents are sorted into three categories based on the scores they gave:
0-6: Detractors. These customers are not satisfied with their experience and are very unlikely to recommend it to others. They probably won’t purchase from the same company again, what’s more, they might spread negative opinions about it.
7-8: Passives. Customers who give a score of 7 or 8 are neutral: they’re not particularly passionate about the company, there’s a slim chance that they’ll recommend it to others, but they most probably won’t spread negative opinions either.
9-10: Promoters. These customers are highly satisfied, enthusiastic and loyal. They are the ones who are most likely to recommend the company, product or service to others.
To get the Net Promoter Score, the percentage of Detractors is subtracted from the percentage of Promoters. Companies that have more Detractors than Promoters have a negative NPS, while, on the other hand, companies with more Promoters than Detractors have a positive NPS.
Technically, any positive score can be seen as good because it means that the company has more “fans” than “critics”. However, what’s considered a good net promoter score varies between industries. Companies usually look at industry averages to make sense of their NPS and track it over time to see any trends or changes.
Vacation rental property managers can use NPS to measure guest satisfaction and loyalty.
You NPS not only describes how likely your guests are to recommend your company to others, but it also says a lot about the health of your business.
A high NPS (by industry standards) is a good indicator of future growth and success. A low score, on the other hand, may be a cause for concern. It may indicate that you need to change something about your business to provide a better guest experience.
Whether you’re getting high or low scores, you should always send your guests follow-up questions via email to dig a bit deeper and find out what they liked and what could have been better. For example, you can ask: “What could we do to make your next stay better?” or “Do you have any tips for us?” or “Why did you give us X score?”
It’s also a good idea to track your score over time and continuously strive for improvement, getting your entire team on board.
Some of the world’s most successful property management companies have started collecting NPS feedback, assessing it and drawing conclusions from it to better their business.
For example, Sykes Holiday Cottages, a major property management company with more than 17,500 properties in the UK and New Zealand, has been using Net Promoter Score for vacation rentals and cottages as an indispensable tool for measuring guest satisfaction and loyalty.
“We obsess over Net Promoter Score (NPS) here, matching owners and guests together to make them both very happy through the lense of NPS,” Graham Donoghue, CEO at Sykes Holiday Cottages tells us in an interview.
Every single guest that goes on holiday with us, we ask them to complete a feedback form, typically the day they come home, and we get about 100,000 responses a year. Just to give you an idea of the scale! Every single piece of feedback is followed up whether you’re a promoter or whether you are a detractor. We follow up to understand how we can learn from it and how to make it better. And we focus very much on the detractors because that’s about working with the property owners themselves.Graham Donoghue, CEO at Sykes Holiday Cottages
Focusing on providing a better guest experience and turning Passives and especially Detractors into Promoters should be a company-wide effort.
NPS feedback is usually collected via a form on the company’s website, or by email.
If you’re getting mostly direct bookings, you can set up a form on your website (in the form of a pop-up, for instance). However, this could be tricky because you need to wait for your guests to complete their stay before you can survey them, and who knows when/if they’ll log back into your website? A website survey is likely to get you fairly low response rates.
Alternatively – and this is the method that will work best for most vacation rental property managers – you can send your guests a survey in an email after they’ve checked out. This gives your guests the time to “digest” their experience and give you genuine feedback.
Once you’ve collected a fair amount of responses over time, you can look at the data to define benchmarks and start trying to find out what may have influenced your ratings.
If you want to take it a step further, you can even segment your guests by demographics, geography, psychographics etc., analyse the scores they’ve given you and figure out how you could cater to each segment’s needs.
Ready to apply Net Promoter Score for your short-term rental business?