What's Your Investor Net Promoter Score?

Is NPS important

At its core, NPS is essentially a way of measuring how your customers feel about a company, and it has become one of the most important metrics for success.

So just why is NPS so vitally important, especially for start-ups? Because, according to the Economics of a Net Promoter Score by the Temkin Group, a high NPS rating is directly associated with a boost in brand loyalty, a willingness to forgive mistakes, and a strong consumer interest in new products and services.

However, customers aren’t the only group your start-up needs to have on board in order to succeed, particularly if you’re a business that is currently relying heavily upon the financial support of investors. Profit motive remains a major deciding factor in business development, which means it is statistically more likely that investors will favour organisations which they believe are operating effectively.

Improving Your Investor NPS

Obtaining a high NPS, or a high investor NPS, isn’t as easy as it may seem. In fact, many of the UK’s biggest and most prominent companies struggle to wholly resonate with their customers, it seems. While organisations such as Nationwide, John Lewis, and Aldi fare OK, the Bank of Scotland, Audi, and Alamo Car Hire currently have some of the worst NPS ratings in the country. NPS is definitely a challenge.

Therefore, an important question that start-up enterprises should be asking themselves is ‘what is my investor NPS?’. Requesting investor feedback is an essential aspect for determining this, and for gaining a better understanding of how investors feel about continuing to financially support the business.

Ideally, start-ups want a score of 100, and while this may be possible to obtain from one or two investors, for those utilising multi-channel financial support, this elusive figure may be largely unattainable. It is, however, possible for start-ups to obtain a strong promoter figure, rather than passive or negative scores. Here are four simple yet highly effective ways for young businesses to increase their investor NPS:

1. Communicate

Communication is often said to be a ‘greatly neglected’ factor of investor relations, highlighting the need for better business-investor communications. If investors are financially assisting a growing company, they want to be sure that their efforts are succeeding, and there is no better way to keep them happy than through clear and regular communications with investors, keeping them in-the-know and up-to-date.

2. Derive Value… Efficiently

Young businesses can successfully involve investors, and, most importantly, derive value from investors, through ongoing communications. However, it is essential for start-ups to use their time wisely, ensuring that any meetings/communications are dealt with efficiently and effectively, making the best use of investor time. This can be done through producing a clear plan, outlining short and long term goals.

3. Be Transparent

Fund investors especially place value primarily in profits and financial success, so it is important for start-ups to consider adopting a transparent policy, particularly in terms of finances. Making use of software such as Xero can significantly help to demonstrate financial status, and provides a clear and simple way for start-ups to share financial information with investors and other financial supporters.

4. Be Open

Sharing bad news with your investors may seem like a surefire way to decrease investor NPS, but on the other hand, this sort of disclosure can also demonstrate that the business is aware of its challenges and is taking the appropriate measures to seek solutions. These responsive behaviours can go a long way towards showing an investor that a business is committed to ongoing growth; a highly attractive quality.

Boost Investor Relations

With experience of the importance of investor relations, and how a strong business-investor relationship can significantly and positively impact investor net promoter score, The Accountancy Cloud are here to help you derive the most value from your investors during these early stages of development. To find out more about how we can help to improve your NPS rating, get in touch with our skilled team today.