What is net promoter score (NPS)?
Definition: Net promoter score is a market research metric companies use to measure the percentage of customers who would recommend their product or brand to others. Companies send out a single survey question to existing customers, asking them to rate the likelihood of their recommendation from 1-10.
The results are used to measure customer satisfaction over time, compare the company's ratings to industry competitors, and build successful referral programs.
How is the net promoter score calculated?
The net promoter score is calculated using the detractors vs. promoters formula.
Detractors are customers who are unlikely to recommend a brand or a service because they answered from zero to six on the single-question survey.
Promoters are customers who are highly likely to recommend a brand or service because they answered nine or ten on the single-question survey.
Passives are customers who answered from 7 to 8, but they are irrelevant for the calculator of the NPS score.
After getting the answers to the question: “How likely are you to recommend our product/service to a friend or colleague?” companies calculate the number of detractors and promoters.
The detractors vs. promoters formula
(Number of promoters – Number of detractors) / (Number of respondents) x 100
Example
Total number of surveyed customers: 100
Total number of promoters: 70
Total number of detractors: 10
Total number of passives: 20
(70-10)/100 x 100 = 60
The overall NPS score is used to measure overall customer satisfaction, and compare to previous data. Individual scores are important for differentiating customers and reacting to feedback accordingly.
What is a good NPS score?
A good NPS score is anything above 0 because it shows a percentage of delighted customers. Brands and companies calculate the NPS score they should strive for by comparing the scores of their competitors and using the average as a guide.
NPS score by industry in 2022
- B2B Software: 45
- IT Service: 44
- Management Consulting: 37
- Marketing Agency: 42
- Insurance: 42
- Manufacturing: 47
- Engineering: 46
How to improve the NPS score
- Keep the survey simple, short, and straightforward to have a high response rate
- Personalize surveys to make customers feel valued and respected
- Track data regularly and act on feedback from promoters and detractors
- Share the results with teams and stakeholders to drive action and suggestions for improvement
- Update customers on changes and improvements regularly
- Include the data and insights in product knowledge training
What can you measure with net promoter score?
The main goal of NPS is to measure customer loyalty and engagement with the brand or company as a whole. NPS is a survey-based metric that provides a holistic view of customer loyalty. Companies use the NPS score as a whole to compare and analyze how many loyal customers other competitors have in the industry.
Companies analyze their customers by dividing them into three groups:
Promoters are considered the most loyal advocates of the brand, and brands make them feel valued with good referral programs, special offers, and follow-ups.
Detractors are considered unsatisfied clients, and companies act on their feedback to avoid bad reviews and losing them to competitors.
Passives can easily switch to detractors or promoters if companies don’t review their feedback and implement suggestions.
While CSAT is a better metric for measuring satisfaction with a specific interaction, companies use NPS as well. To measure customer satisfaction with NPS, companies send the survey to the customer right after he had an interaction, for example, with a customer service agent.
It’s not entirely relevant to divide the customers into three groups because loyalty isn’t based on one interaction. The NPS score here partially gives insight into the areas of improvement and causes of dissatisfaction.
- Employee Satisfaction
A NPS survey can be adapted to measure employee satisfaction and engagement. Employees are asked if they would recommend the company or brand to their friends or family to see the percentage of loyal employees.
Companies use this information to increase employee retention and improve through collecting and implementing feedback.
Example of NPS survey
- How likely are you to recommend Mindmesh to your friend or colleague?
1 2 3 4 5 6 7 8 9 10
- What is the reason for your score?
*Open-ended text box for customers to provide feedback
Additional questions:
- How satisfied were you with the service you received on a scale from one to five?
- How easy was it to access the service?
- Do you have any suggestions for how we can improve Mindmesh?
*Open-ended text box for customers to provide feedback
What to avoid in an NPS survey
- Leading questions – Avoid questions that suggest answers because an unbiased survey is more effective.
- Ambiguous or complex questions – Make sure the customers get clear and precise questions, so they don’t waste time on analysis and quit before submitting.
- Personal information – Asking for personal or very specific information makes customers question the anonymity of the survey and reduce response rates.
