NPS stands for Net Promoter Score and is a method for understanding customer loyalty. By asking just one question the NPS will generate a result between -100 and +100. The higher the score, the better.
The chances are, if you send email communications for your company, you will at some point share communications about your company’s NPS survey. You may also get involved in the employee equivalent – the eNPS – which represents employee loyalty.
This blog explains everything you need to know about NPS (Net Promoter Score).
What is the NPS question?
Customers are typically asked, “How likely are you to recommend (company name) to a friend or colleague?” They are then provided with a scale of 0-10 to choose from, where 0 indicates not at all likely and 10 signifies.
The ratings your customers respond with are split into three categories; Detractor, Passive and Promoter.
Those who respond with 0-6 are classified as Detractors. They are unhappy customers who are likely to speak negatively about your company.
Those who respond with a 7 or 8 are Passives. They are satisfied but are unlikely to go the whole hog and recommend you.
Those who respond with a 9 or 10 are Promoters. They are very enthusiastic about your company and very loyal customers.
How is the Net Promoter Score calculated?
After your customers respond, it’s time to calculate your Net Promoter Score. Firstly, disregard all passive scores. Then, calculate the percentage of Detractors and Promoters. Finally, subtract the percentage of Detractors from the percentage of Promoters to determine your Net Promoter Score.
For example; a company receives the following results:
20% Detractors
45% Passives
35% Promoters
35% – 20% = NPS of 15
What is a good NPS score?
Your Net Promotor Score can range between -100 and 100. A score below zero is concerning, above 20 is considered promising, above 50 is excellent and anything above 80 is considered outstanding.
BUT (and this is a big BUT!) – there are a lot of variables that could influence your NPS score – your stage of growth, number of survey respondents, industry and external economic factors to name but a few.
Rather than comparing your score against industry averages, it is far more valuable to benchmark against your own score. If you are seeing an improvement, you’re doing well.
How often should an NPS survey be carried out?
The frequency of your NPS survey will depend on your own organisation. Some complete them annually while others will ask for the information quarterly. It all depends on the product/service you provide and how quickly opinions are likely to change.
What is important is consistency. Once you decide on the frequency, stick to it.
Life after an NPS
NPS is a brilliant representation of customer loyalty. But it goes no further than that. It doesn’t tell you what you can do to change Passives into Promoters, it doesn’t tell you whether there is a chance to regain the loyalty of your Detractors and it doesn’t tell you how you can retain your Promoters.
All NPS surveys should also be accompanied by wider customer research. Think of the NPS as a benchmark to expand and build upon.
