Everything You Need to Know About Net Promoter Scores (NPS)
A Net Promoter score is one of the most important metrics for evaluating your business and customer engagement. It measures customer loyalty and satisfaction, informing you whether customers promote your brand or dissuade people.
Find out how Net Promoter Scores work and why they’re incredibly valuable for your business.
What Are Net Promoter Scores?
A Net Promoter Score survey is a single question with a rated answer. You’ve probably answered one of these surveys yourself. The question usually looks something like this:
- How likely are you to recommend XYZ to someone you know?
The respondent can give a rating between 0 and 10. Net Promoter Scores range from -100 to +100; the higher the score, the better. According to their rating, respondents fall into one of three categories, explained below.
Promoters: 9 or 10
Promoters are the customers who answer the NPS survey with a rating of 9 or 10, showing they are loyal and satisfied with the business.
These people are the most likely to recommend the brand to others and speak positively about the company. Promoters boost your NPS; the goal is for every respondent to be a promoter!
Passives: 7 or 8
We know 7 and 8 might sound like positive or high scores, but they’re actually considered passive or neutral. Passives are typically satisfied with the service or product but not necessarily loyal or enthusiastic.
These people are not likely to recommend the company to others or promote the brand. However, they’re also not very likely to dissuade people from the company or speak negatively about their experience.
Detractors: 0 to 6
Detractors are unhappy with the service or product. Again, we know 6 doesn’t sound like a horrendous score, but it’s low enough to suggest that the respondent was dissatisfied.
Detractors drag down your Net Promoter Score. Not only are detractors unlikely to use your product or service again, but they’re more likely to speak ill of the brand and convince others to find an alternative business.
How to Calculate Your NPS
Calculating your NPS is fairly easy. The formula is simply:
- % of Promoters – % of Detractors = Net Promoter Score
If 75% of respondents are promoters, 15% are passives, and 10% of detractors, you calculate (75 – 10 = 65), and 65 is your NPS.
What Is a Good Net Promoter Score?
What we consider a good NPS will depend on the industry benchmarks. Research your industry’s average Net Promoter Scores to better set your goals.
Most consider scores between 10 and 30 acceptable, 30 to 50 good, and 50+ excellent. However, anything above 0 is a positive score — literally. Remember, the scores range from -100 to +100, so an NPS below 0 is bad.
If your score is anything above 0, it means you have more promoters than detractors, even if it’s only by a slight margin.
Types of NPS Surveys
Below are three types of NPS surveys.
Transactional NPS: Transactional NPS surveys follow a customer interaction, like a purchase, support call, or other engagement. These help assess satisfaction with specific aspects of the customer experience.
Relational NPS: Relational NPS surveys are more regular and broad. Businesses routinely send these NPS surveys to customers (monthly, quarterly, annually, etc.). The surveys offer a general overview of customer satisfaction, loyalty, and opinion.
eNPS: This type of survey is a little different. eNPS stands for Employee Net Promoter Score. The survey is given to employees and measures how likely they are to recommend the company and speak positively about it. These are far less common but can be helpful at large companies.
What Net Promoter Scores Can Measure
Your NPS can help you measure:
- Product Success
- Store Success
- Web Page Impact
- Staff Performance
- Customer Loyalty and Retention
- Brand Reputation
The type of survey you send out will determine what value your NPS offers. A survey about a specific product can help with research and development, while a more general question gives you brand reputation insight.
Quick Guide to Creating NPS Surveys
While the actual NPS survey only requires one question to attain NPS metrics, people often include other questions and prompts. A survey can include:
- A question about the respondent’s demographic
- The NPS question
- An open-text question asking the reason for the rating
- An open-text question asking how to improve customer experience
- A question asking permission to follow up with the customer
These additional questions are helpful but optional. Only the NPS question is necessary. Here are examples of Net Promoter Score questions you can use:
- How likely are you to recommend XYZ to someone you know?
- On a scale from 0-10, how likely are you to recommend XYZ to a friend or colleague?
- How likely are you to recommend XYZ to someone sharing the same interests?
- How likely are you to recommend XYZ to a friend or colleague based on this experience?
XYZ can be a specific product, service, interaction, or the company as a whole.
Tips for Using NPS Surveys
Below are tips for best utilizing NPS surveys and survey responses.
- Identify Themes and Patterns: Possibly the best way to use NPS, finding common themes and patterns within the survey answers can help you identify what isn’t working within your company and tackle it head-on.
- Determine Root Cause: Conduct a root cause analysis of recurring issues or complaints. Take every complaint and boil it down to the cause so you can directly address and solve the issue.
- Cross-Reference NPS Analytics: Cross-reference NPS data with demographic, product usage, and service usage analytics. This helps you see what promoters and detractors do differently that changes their experience and satisfaction.
- Use NPS Surveys Frequently: Send out an NPS survey at multiple stages of the user journey to pinpoint areas for improvement. Customers may dislike the sign-up process but love the customer service.
- Measure NPS Over Time: To measure your success, you must assess NPS regularly. If you have an excellent NPS score, that doesn’t mean you should stop sending surveys and making improvements. Track NPS over time, whether months or decades, to see how and when ratings shift.
- Follow-Up With Customers: When you act on insight from NPS, it’s important you follow up with customers to measure the impact of your efforts.
- Gather Qualitative Data: NPS is very quantitative, but the qualitative data from these surveys can be just as useful. Comb through open-text questions and gather data manually or with a text analyzer.
- Use a Proper Sample Size: Sending too many or too few surveys can skew your data. Try to create a medium sample size for accurate results. Experts recommend sending surveys to 1/90th of your customers or users.
- Use a Mix of Survey Questions: As mentioned, only one question is necessary, but a mix of open-text, broad, specific, quantitative, and qualitative questions means more data and insight.
Turn Your NPS Into Success
The value of a Net Promoter Score can not be overstated. As you can see, there are endless ways to use your NPS data to improve your company and customer experience.
However, using your NPS to its full potential and squeezing every drop of insight out of it can be daunting and difficult. Our experts at Catalyst Group ECR can help you digest and utilize all this information effectively.
Contact Lori Moen at Catalyst Group ECR for help navigating your Net Promoter Score, from creating a useful survey to measuring follow-up success. With CGECR’s help, you can turn your NPS into success.
