What is a Net Promoter Score?
Net Promoter Score is customer loyalty and satisfaction measurement calculated by asking customers how likely they are to recommend your product or service to others on a scale of 0-10.
NPS is often held up as the gold standard customer experience metric. As a business metric, NPS helps companies of all sizes organize around a mission-critical goal - increase their score by earning more enthusiastic customers - that can be easily tracked and quantified over time.
How to calculate NPS?
The respondent is asked to select a rating on a 0-10 scale, with 0 being the least likely to recommend and 10 being the most. Once the responses come back, you’d segment each respondent into one of three groups, based on their rating:
Promoters: Loyal and enthusiastic customers who respond with a score of 9 or 10.
Passives: These customers are satisfied with your service but not happy enough to be considered promoters. They respond with a score of 7 or 8.
Detractors: These are unhappy customers who are unlikely to buy from you again, and may even discourage others from buying from you. They respond with a score of 0 - 6.
NPS = % of promoters - % of detractors
For example, if 10% of respondents are Detractors, 20% are Passives and 70% are Promoters, your NPS score would be 70-10 = 60.
How to improve your NPS?
Develop a systematic process for tracking your NPS and reacting to it:: The customer experience is constantly evolving. If you can keep your finger on the pulse of your customer sentiment and take steps toward addressing their feedback quickly, you’ll be more likely to have loyal, happy customers.
Invest in your customer-facing employees: Every customer interaction shapes the client’s perception of your organization. Prevent your organization from losing customers by building a first-class customer-facing team. Invest in training and product/service-related resources they can refer to in order to answer customer questions as quickly and effectively as possible.
Why is NPS important?
NPS can be used as a predictor of business growth. When your company’s NPS is high (or, at least, higher than the industry average), you know that you have a healthy relationship with customers who are likely to act as evangelists for the brand, fuel word of mouth, and generate a positive growth cycle. The overall NPS system is important because it allows businesses to:
- Ask follow-up questions as part of the standard NPS survey. By asking customers why they've given a specific score, organizations of any size can understand what they're doing well and where they could be improving
- Track and quantify a score over time, creating internal benchmarks
- Rally all employees around one mission-critical objective: earning more enthusiastic customers