The term Net Promoter Score (NPS) may sound daunting, but like most aspects of customer service/sales, it’s not that scary.
If you’ve ever had a really terrible experience at a restaurant—the waiter forgets your order, there’s hair in your food, etc.—chances are pretty good that you’re not going to recommend that restaurant to a friend (unless you’re secretly mad at said friend and feeling especially petty). On the other hand, if you happen upon some amazing new café that changes your life forever, you’ll probably tell all of your friends and rave about it on social media.
That’s basically a Net Promoter Score in a nutshell—a customer satisfaction rating/benchmark that measures how likely your customers are to recommend you to a friend.
How To Calculate Net Promoter Score
Calculating your Net Promoter Score begins with a key question: On a scale from 0–10, how likely are you to recommend X (business) to a friend?
After surveying a group of customers, you’ll place them into the following categories based on their responses:
- Promoters (score 9–10) are your dedicated consumers who will continue to buy from your company and refer others
- Passives (score 7–8) are satisfied consumers, but less enthusiastic and easily swayed by competing businesses
- Detractors (score 0–6) are the unhappy consumers who can (and probably will) damage your brand through word-of-mouth
To find your Net Promoter Score, subtract the percentage of Detractors from the percentage of Promoters. It’s that easy. Passives are left out of this equation because they can’t be counted on to leave a positive or negative review.
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Sample NPS Survey Questions
When putting together your NPS Survey, it’s important to ask questions that will provide both quantitative and qualitative responses. Quantitative questions will focus on the rating system we previously explained, while qualitative questions will hone in on why the customer chose the ratings they did and what feelings were behind those responses. These are just a few examples of NPS Survey questions that will provide you with an in-depth look at consumer attitude.
- On a scale of 0–10, how likely are you to recommend our business to a friend or colleague?
- On a scale of 0–10, how likely are you to recommend (product/service name) to a friend or colleague?
- On a scale of 0–10, how likely are you to recommend (company name) as a potential workplace to your friends?
- What is the primary reason for your score?
- How can we improve your experience?
- Which product/service features do you value and use the most?
- What was missing or disappointing in your experience with us?
- What can we do to make you a happier customer?
Why Is a Net Promoter Score Important?
As you’ve probably gathered by now, a company’s Net Promoter Score is an invaluable piece of consumer data. It also plays an important role in the success of one’s business.
An NPS helps brands better understand their customer loyalty base—why people continue coming back to them and recommending them to their friends. It also allows them to evaluate the causes of customer turnover when people aren’t returning to the company’s services and seeking out competing businesses. NPS can even identify customers who might have been loyal at one time and are suddenly starting to leave. All of this information gives businesses insight as to who their audience is and how they can keep them satisfied.
Room For Improvement
Once a brand has evaluated their customer loyalty, they can begin to focus on the consumers who have, let’s say, not been so loyal. While negative feedback is never easy to receive, it helps us better understand where there may be room for improvement. HubSpot recommends leaving additional space in your NPS survey for customers to write specific thoughts about why they scored your brand the way they did. This allows you to dive deeper and pinpoint specific ways to improve their experience.
Recommendations from satisfied customers (AKA referral marketing) is another factor that businesses can use to evaluate their NPS.
According to Nielsen, more than 80% of happy customers are willing to provide recommendations to others and almost 70% of customers are more likely to purchase a product if it was mentioned by a friend on social media or email. Not to mention, customers who were referred have a 16% higher lifetime value than other customers.
What are the cons?
According to SurveyMonkey, there are a couple of drawbacks to the Net Promoter Score. First, the NPS system isn’t always specific enough. This is why we previously mentioned the importance of both quantitative and qualitative survey questions. Sure, it’s still helpful to understand customer loyalty, but you also need to know the reason why some customers may be Detractors to make improvements.
Secondly, like any customer metric, the NPS alone will not magically improve your business. There has to be an actionable follow-up plan in place after you’ve received the results of the NPS survey. What changes will your business make to serve its customers better, and how will those changes be implemented?
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Net Promoter Score, or NPS, is essentially the likelihood of someone recommending your company to a friend. It’s arguably the most important consumer metric for a successful business. Surveying a group of customers will help you calculate your NPS and determine how to improve your brand and increase consumer loyalty. Remember: Negative feedback is better than no feedback and only helps your business grow.
Speaking of NPS, how likely are you to recommend DigitalMarketer to a friend? *nudge nudge*