What is Net Promoter Score (NPS)?
Net Promoter Score or NPS is a terrific, straightforward approach to assess your customers’ degree of satisfaction.
Your happy loyal customers will often act as your brand advocates and convince potential shoppers to buy from you. This leverage will easily make you win over your competitors.
Feedback from a happy customer is great, but it is critical to learn and improve based on your customers not giving you the top rating. Give it attention and do necessary changes, and it will drive your NPS score up going forward.
The perfect NPS score is 100, and while it seems almost impossible to achieve, businesses must aim for it. Netflix has an NPS of 68, Starbucks has an NPS of 77, while Tesla’s is an outstanding 96. The latest survey we have found for different industry NPS average is done by Statista.
Now, let's dive in to understand the Net Promoter Score in detail.
Table of Contents
What is Net Promoter Score (NPS)?
Net Promoter Score is used to predict business growth by measuring customer experience. It is a proven metric used worldwide that quantifies your customers’ satisfaction.
NPS was coined in 2001 by Fred Reichheld and Satmetrix. It got its popularity in 2003 after Fred Reichheld included it in Harvard Business Review article publication as a means to figure out the only number you need to grow.
NPS contains two main elements
- First is the 0-10 scale-based rating depicting how likely it is for your customer to recommend your brand to others.
- And secondly, an open question to collect their submitted rating feedback.
Net Promoter Score Calculation
The Net Promoter Score calculation is easy. Customers are polled on just one question. Customers assess the likelihood of endorsing a product or brand to a friend or colleague on a 10-point scale. One common question is, "How likely would you recommend the company's product or service to your friend or colleague, on a scale of 0 to 10?".
Based on the customers' rating responses we divide them into three groups; detractors, passives, and promoters. And then we use two of these customer groups to calculate the NPS score.
Now, before we dive into the NPS score calculation formula it is important to understand these three customer groups first.
Net Promoter Score Breakdown - Customer Groups
Basis on the submitted score, the respondents of the survey are categorized as one among the following groups.
The respondents who rated your brand 9 or 10 are called the Promoters. Promoters are a company’s most engaged and loyal consumers. They are more likely to act as brand ambassadors, improve a brand’s reputation, and generate referral flows, all of which assist in driving the company’s growth.
The respondents who rated your brand between and including 0 and 6 are the Detractors. Detractors are reluctant to promote a firm or product to others, are unlikely to remain around or make repeat purchases, and, worst of all, may actively prevent potential consumers from doing so.
Those respondents who leave a rating of either 7 or 8 are called the Passives. Now, Passives, as the name suggests, do not actively promote a brand, but they are also unlikely to harm it through unfavorable word-of-mouth. Passives, although not being included in the NPS calculation, are incredibly close to becoming promoters (especially when they provide a score of 8), so it's always a good idea to spend time figuring out how to win them over.
Formula for Net Promoter Score
The Net Promoter Score formula is quite essential. Subtract the proportion of critics or detractors from the percentage of promoters to get your final NPS score.
NPS = % of Promoters – % Detractors
Here these % values are calculated as:
% of Promoters = (Number of Promoters / Total Number of Respondents) x 100
% of Detractors = (Number of Detracters / Total Number of Respondents) x 100
If 5% of respondents are detractors, 18% are passives, and 77% are promoters, your NPS score will be 77-5 = 72.
In many cases it's often easier to win over the passives and turn them into promoters, it will boost your NPS score and increase your brand loyalty.
When the customers rate an organization on the NPS question that is sent to them, they are basically rating the organization on a score between 1-10.
NPS survey question & rating is usually distributed among customers using emails and landing page campaigns. By using an online digital marketing code-free platform you can easily embed the net promoter scoring component within your landing pages and emails.
And then for diversified audience-reach share your landing pages having NPS element (the scoring and the feedback field) via SMSs, digital ads, QR codes, and SoMe posts to collect your customers’ ratings and feedback.
As a business measure, NPS aids organizations of all sizes in focusing on a mission-critical goal - improving their score by gaining more enthusiastic customers - that can be readily tracked and quantified over time.
What is Your Net Promoter Score Indicating?
What does it mean to have a "good" net promoter score? It's vital to recognize that there isn't a single "holy grail" figure to aim for while answering this question. The outcomes differ dramatically from one industry to the next.
Aggregated NPS scores expressed between -100 and +100. It is preferable to get a better score, as higher NPS is a clear indicator that your customers are likely to recommend your product or service.
Any number above 0 is technically a "positive" score since it indicates that you have more promoters than detractors. A score of more than 50 is acceptable, while more than 70 deems to be outstanding by worldwide NPS standards. Both of these scores, however, are pretty uncommon.
An excellent method to use NPS is to check the score of a close rival and see how yours lines up.
When you are using an online solution to create & embed your NPS question within your emails and landing pages, you will get the final computed NPS directly in your campaign analysis insight.
How to Create a Net Promoter Score Survey?
NPS surveys are simple to develop, but when determining how to administer them, keep in mind how the data is used in the long run. You could utilize survey software, but because it only measures one statistic, it will limit your capacity to act on the data.
If you are planning to send out the NPS survey to an entire list of email IDs of mobile numbers that you may have, one of the best ways to do it would be to create an NPS questionnaire using our Email Editor and Landing page builder.
And after distributing you'll get an in-depth NPS report along with all relevant details that you need to know about your customers' interactivity, scoring, trend, feedback, and more.
While the NPS score will give a glimpse of your customers' loyalty towards your brand, the additional feedback field question will help you to know your audience better.
Use Net Promoter Score
With a system this straightforward and structured, there are multiple advantages to using the net promoter score.
It is not necessary to use a statistician to run the NPS online poll. The sample survey question is on a single concept: whether or not your consumers enjoy your business enough to suggest it to others.
Not only can Net Promoter Scores assist a firm in comparing itself to the competition, but marketers may also use them to compare the performance of one department's services to those of other departments.
One of the most critical aspects of the NPS program is that it's a globally recognized metric, so you can readily compare your Net Promoter Score to your primary rivals. When compared to other scores in your industry, your score becomes more meaningful.
Benefits of NPS
The key benefits of Net Promoter Score are
- Measures customer satisfaction
- Highlight the key issues & concerns
- Give you a clearer picture of customer retention & loyalty
- Earn your customers trust & reduce the churn-rate
- Provide you an opportunity to convert more customers into your brand advocates
- Word-of-mouth and positive testimonials improve brand imagery & boost sales
- Helps you to set industry-specific benchmarks to compare against your competitors
- It is easier to implement, run and monitor the results
- It's not one time score, you can continuously work on improving your NPS score
- NPS is short, clear and more effective means to collect immediate feedback
To drive more sales and acquire new customers, you need to deliver a better customer experience. And for that, you need to know your customers' feedback. It is powerful information that every business owner, marketer, and brand need to know to meet their customers’ expectations & requirements.
NPS is interactive, and by using an effective digital marketing solution, you can easily add it to your emails and landing pages. Run in no time and measure your customers' response. Marketers experienced a 200% increase in click-through rate when interactive elements are added to emails. Similarly, interactive landing pages tend to engage and convert 2x more than static ones.
NPS serves both adds interactivity, makes your customers feel valued, and you get to know the problem areas and the USPs that are performing best for conversions.
Points to Consider while Using NPS
Net promoter score question
This is the central question, and it will be the primary criterion for determining your grade. The other questions make it easier to analyze the score data and follow up with the respondent to address their concerns.
The respondent will reply to this question on a 10-point scale and that is the main response that determines your final NPS score.
NPS Follow-up Question
In this open text inquiry, you ask the client why they gave the numerical score in the principal NPS question. This data can aid you in identifying the motivators for promoters and critics in your answers.
This is a great way to qualitatively understand that what is the reason why your respondents responded to the survey in the way that they did.
Make Your Customer Experience Better
You ask the respondent to recommend something you could do to improve their experience in this question. If you plan to undertake closed-loop follow-up and customer ticketing with your responses, this might be useful.
If you know the answer, you'll be well on your way to immediately addressing the problem with the consumer. Remember that not all situations will require both the "reason for your score" and "how might we better" questions, as the answers will frequently be the same.
Permission for further contact
It's a good idea to ask the survey responder whether you may contact them again if necessary. Not everyone will want to talk to someone about a problem that hides in a survey answer.
Depending on how your survey disseminates, you may or may not have the customer’s email or phone number, so don’t forget to ask if you need it. And more like ask them what channel of communication they are comfortable contacting from regarding their concern resolution.
Net Promoter Score for Employees
Happier employees create happier customer journeys. It's contagious, your loyal employees are most likely to earn loyal customers for you. Happy employees are more engaged, productive, and inspired to deal with your brand customers and followers enthusiastically.
Thought leaders think the traditional yearly survey isn't enough, it is restrictive doesn't equip you to assist and help all employee concerns at the right time. It usually results in dissatisfaction among employees leading to a loss in their loyalty. Using the Net Promoter Score system you can run more frequent employees surveys, requiring minimal time investment and efforts indulgence. These are shorter than annual employee surveys and efficient enough to highlight the key issues to take care of.
You’ll be able to listen to them on time and address their concerns more strategically. This feedback and response-based work culture will boost your employees' loyalty towards your organization.
Big organizations like Apple have successfully embedded NPS in their work culture. The - ‘most likely to recommend’ rating question will help you understand your employees' experience & satisfaction levels, and the open-end question will be a great indicator to judge their energy, satisfaction and creativity levels.
Most frequently organizations are using eNPS surveys monthly. It provides quite stable growth as required for smoother & enthusiastic operations. It’s superb means for quick experimenting and equipping team leaders and managers to take effective timely actions with a huge impact on overall productivity and deliverables.
Net Promoter Score (NPS) aids in predicting business growth through measuring customer experience; this single question established an effective metric for businesses to monitor their customers' satisfaction.
Earned growth will provide businesses with a clear, data-driven connection between customer success, repeat and expanded purchases, word-of-mouth recommendations, a positive company culture, and business results.
Further, once you find out your NPS score through the detailed insights you can easily take the next steps and try to optimize your NPS score. We have also tried to make it easy for you to monitor your Net Promoter Score for different regions or countries of your business with the possibility to segment your NPS result data.