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The Ultimate Guide to Understanding Your Net Promoter Score (NPS)

Before making significant decisions, such as selecting a new home, job, or travel destination, we typically conduct research online and seek recommendations from friends and family. Online reviews and personal recommendations are vital to customers, with 91% regularly or occasionally reading online reviews, and 84% trusting them as much as personal referrals. One customer’s negative experience could result in a loss of potential customers. Customers are also more likely to share negative experiences than positive ones, telling almost three times as many people.

With the rise of social media, customers can easily share their feedback and reviews with their entire network at the touch of a button. This underscores the importance of collecting customer feedback and resolving issues quickly to prevent negative reviews and, more importantly, delighting customers to the point where they recommend the brand to others.

The Net Promoter Score (NPS®) is a valuable tool in achieving this goal.

What is Net Promoter Score

Net Promoter Score (NPS) is a customer loyalty metric that was developed by Fred Reichheld in 2003. The metric is based on a single question: “On a scale of 0 to 10, how likely are you to recommend our product/service to a friend or colleague?” Based on the response, customers are divided into three categories: detractors, passives, and promoters.

Detractors score between 0 and 6 and are unlikely to recommend the product or service. Passives score between 7 and 8 and are considered neutral customers. Promoters score between 9 and 10 and are highly likely to recommend the product or service to others.

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How to Calculate Net Promoter Score (NPS)

To calculate NPS, companies must first send out an NPS survey to their customers. The survey should ask the customer to rate their likelihood of recommending the company’s product or service on a scale of 0 to 10. Once the survey has been completed, companies must calculate the percentage of detractors, passives, and promoters based on the responses. To calculate the NPS score, subtract the percentage of detractors from the percentage of promoters.

For example, if a company receives 100 responses to their NPS survey, and 10 customers rate the product or service between 0-6 (detractors), 20 customers rate the product or service between 7-8 (passives), and 70 customers rate the product or service between 9-10 (promoters), the NPS score would be calculated as follows:

NPS = % Promoters – % Detractors NPS = (70/100) x 100 – (10/100) x 100 NPS = 60 Therefore, the company’s NPS score is 60.

Compare your NPS® against industry competitors with our benchmarking calculator

NPS Survey

The key to obtaining a high Net Promoter Score (NPS) is to have significantly more promoters than detractors.

To understand your NPS, imagine that you surveyed 100 customers, and 50% were promoters and 40% were detractors. In this case, your NPS would be 10 (50% – 40% = 10). However, if only 20% were detractors, your NPS would increase to 30.

It is crucial to survey customers regularly to identify areas of opportunity and risks, as well as to determine ways to enhance their experience. We recommend leaving space for customers to provide qualitative feedback on how to improve, as well as asking follow-up questions to understand the reasoning behind their initial NPS rating.

Let’s take a look at some examples of these NPS survey questions you can ask:

  1. On a scale of 0-10, how likely are you to recommend our product/service to a friend or colleague?
  2. What was the primary reason for the score you gave?
  3. How can we improve your experience with our brand?
  4. What features or aspects of our product/service do you find the most valuable?
  5. Were there any issues that you encountered while using our product/service?
  6. What specific improvements would you suggest for our product/service?
  7. Is there anything that would have made your experience with our brand more satisfying?
  8. Have you recommended our brand to anyone in the past 30 days?

Now, let’s take a look at why NPS is crucial for business success.


Why Is NPS Important?

  1. Go deep: The net promoter system gives companies a chance to “go deep” – that is, to gather more information from respondents. It also gives them chance to change a negative impression. Since an NPS survey only takes a few minutes of a customer’s time to complete, it’s relatively easy to get them to engage with it.

  2. Easy to use: You don’t need to be a trained mathematician. The survey is intuitive and simple for customers to complete. You can send it to them via message, email or include it on your website as a pop-up

  3. Segment Customers: By segmenting customers into promoters, passives and detractors, the NPS system makes it easy to differentiate between them. Segmentation by score can also help reduce churn. By following up with detractors, you can make them feel heard and valued, and might make them less likely to churn — or worse, tell others that they shouldn’t purchase from you.

  4. Consistent benchmarking: NPS is a standard metric used by companies globally. As such, it lets you compare your score with other scores in your industry and see how you measure up. NPS is also ideal for presenting to the decision makers in the company as a high level snapshot of customer loyalty at a given moment. Get started with comparing your NPS score with industry benchmarks with this free calculator. 

Use NPS Data to Grow Further

Once you complete your NPS surveys, analyze scores, and segment your customers, don’t stop there. Engage with happy customers (promoters) and see if you can get them to join a referral program to acquire more customers for your business. The most successful companies don’t just understand what their customers want – they also know how they stack up against the competition. Benchmark your NPS against competitor benchmarks with our FREE NPS benchmarking tool.

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