Net Promoter Score (NPS Guide)
NPS, or Net Promoter Score, is one of the most common and effective customer experience metrics worldwide. The implementation of this survey covers customer loyalty.
What is Net Promoter Score?
NPS, or Net Promoter Score, is one of the most common and effective customer experience metrics worldwide. The implementation of this survey covers customer loyalty, enthusiasm, advocacy, and willingness to recommend your company’s products or services to others. NPS scale ranges from -100 to 100, and the higher NPS score you get, the better.
What is the NPS standard question?
The NPS survey requires customers to rate the quality of the service your company offers, giving you insight into their sentiment of the overall experience they have with your business.
NPS measures customer perception and customer loyalty towards your brand based on one question: How likely are you to recommend the company to a friend or colleague?
The NPS survey usually includes a follow-up open-ended question to address the reasoning behind the customer’s answer, no matter the score. A follow-up question can be: What is the primary reason for giving this score?
What are the benefits of using NPS?
- Showing you the likelihood of retaining each customer.
- Providing direction for how to improve the customer experience.
- Tracking change in customer loyalty over time.
- Measuring how you keep up against competitors.
How Does NPS Work?
Answered by customers on a scale of 0 to 10, the score indicates the likelihood that your customer will recommend your product or service to others. The feedback ranges from 0 (not likely at all) to 10 (extremely likely):
“On a scale of 0 to 10, How likely are you to recommend this company to a friend or colleague?”
Based on their responses on this question, you can classify your customers into the following categories before the NPS score is calculated:
- Promoters: customers who answer with a score of 9 or 10. Promoters are the excited customers who are both loyal to your brand and actively sharing the positive experience they had with your business with their family and friends.
- Passives: customers who answer with a score of 7 or 8. Passives are the neutral customers that are not entirely loyal to your brand, and probably open to switching to your competitors if the opportunity presents itself.
- Detractors: customers whose answer ranges from 0 to 6. Detractors are not satisfied and very likely to opt out. More importantly, they might damage your brand reputation by spreading their negative experiences with others.
But don’t forget to follow up on the customers who respond with low scores with an open-ended question to identify the reasons behind not recommending your company to others, such as:
“What’s the main reason for your feedback?”
How to calculate NPS?
After conducting your survey, follow these steps to calculate the NPS:
- Categorize your responses into (Detractors: 0-6, Passives: 7-8, Promoters: 9-10).
- Subtract the percentage of detractors from the percentage of promoters to get a score between -100 and 100.
The equation is: (NPS=%Promoters-%Detractors)
Assume that you have received 100 responses for your customer NPS survey, as follows:
Total responses = 100 (Promoters = 50, Passives = 30, Detractors = 20)
Calculate the percentage of each category,
% of promoters = (50/100) *100 = 50
% of detractors= (20/100) *100 = 20
NPS (Net Promoter Score) = 50-20 = 30
When to use NPS and what are the types of NPS?
1. Transaction or Trigger-Based Survey
a. To measure customer feedback after various customer interactions with your company (ex. after a purchase)
b. To catch a prompt insight following a key action
c. To understand customer satisfaction on very specific topics
2. Relationship or Time-Based Survey
a. Sent monthly or quarterly automatically
b. Get a periodic pulse of your customer satisfaction
c. Understand your customers’ overall perception and experience with your product or service.
d. Implement this feedback to reduce chances of churn.
How to read NPS results after survey and data collection?
1. Track your organization’s overall NPS over time to see trends and fluctuations, monitor the overall perception of your brand and anticipate your business growth.
2. Performing segmental analysis, with the ability to categorize the data by company, product, service, staff, nationality, age group, gender, transaction, among others.
3. Measuring employee NPS to see how loyal and engaged employees are in your organization.
4. Benchmarking your NPS results with competitors.
5. Focusing on the reasons behind the low NPS score and following up with dissatisfied customers.
6. Helping employees and stakeholders to take instant actions.