Net Promoter Score, or NPS for short, is a number that tells you how likely your customers are to recommend your product, service or company to a friend or colleague. All it takes is a simple survey question like the one below.
It’s calculated by taking the percentage of customers likely to promote your product (score of 9 or 10 = “promoters”) and subtracting those customers unlikely to promote it (score of 6 or lower = “detractors”). The people who answer with 7 or 8 are called “passives” and their numbers are only used in the overall percentage calculation. Net Promoter Score is widely popular largely due to it’s simplicity and ease of use.
What Is NPS?
NPS is a famous management tool used to measure customer satisfaction. It is so popular that it’s now used by two-thirds of the Fortune 1000. It was created by (and is a registered trademark of) Frederick Reichheld, Bain & Company and Satmetrix. Net Promoter Score was first introduced in a Harvard Business Review article from December 2003 titled “The One Number You Need to Grow“.
By using our survey template you can create your own NPS survey in a matter of minutes. While the question shown above is all that is needed to calculate the score, best practice is to include follow-up questions to discover more about your customers or clients.
We especially recommend adding a question like “What can we do to improve this [company/product/service]?” (included in our template). This survey question could then be followed with an offline phone call or email to gather more details. The goal is to improve your service or product in order to turn detractors into promoters!
When you use an NPS survey in your customer interactions and follow-up, you send a powerful message that you are interested in improving your service and that you care how they feel. You show them your dedication to customer success.
Calculating the NPS is easy. First subtract the number of detractors from the number of promoters and divide that by the number of people who answered the question. Mathematically it would look like this:
The score is a number between -100 (everyone is a detractor) and +100 (everyone is a promoter) and the higher the number the better!
Any NPS score above 0 is good. It means that your audience is more loyal than not. Anything above 20 is considered favorable. Bain & Co, the source of the NPS system, suggests that above 50 is excellent, and above 80 is world class.
Unfortunately it’s not really possible to say exactly what is a good score and what is a bad score in absolute numbers because each industry is a little bit different as you can see in the chart above.
In addition, there are regional differences as well. For example, South American consumers often give higher satisfaction scores than other cultural groups, while Japanese consumers are the toughest to please.
When To Use An NPS Survey
There are numerous instances when it would be a great idea to check in with your clients to see how well they enjoy working with you. Here are just a few:
- After they have completed an interaction with your service department. This is best done as soon as possible so they don’t forget any details.
- When they have finished using your product or service
- Shortly after they have started using your service to discover if there are any gaps relative to the sales/marketing experience. This also helps you to catch any problems early on. Another advantage with this approach is that is allows you to see progress over time.
Generally, an NPS survey is best distributed after the customer has achieved a meaningful milestone with your service or, if the customer has been with your company for a long time, after a certain time period.
Net Promoter Score is a high-level signal and should be tracked and measured over-time. For long-term clients we recommend checking in regularly, perhaps quarterly. You don’t want to do it so often that they become sick of the question but it’s needs to be often enough to give you time to adjust course if necessary.
Getting Started With NPS
Getting started with NPS is very easy with SurveyRock. Just login or create a free account to get started! From your survey dashboard click on “+Create” and then “Survey from Template” to see all of our various surveys templates.
Scroll down to “Net Promoter Score” and click on the title to see a sample questionnaire or the “Select” button to copy the NPS template to your dashboard.
You now have a 4 page NPS survey that you can customize as you wish. The first page is the NPS question itself. The second is a follow-up question to help you gain insight as to why the customer selected the number that they did. The third page helps you with demographic information and the last page is to assist with any subsequent contact. That’s all it takes!
Applying The NPS Data
So you have created an NPS survey and are now diligently gathering customer feedback. What’s the next step? How can you convert this information to actionable intelligence? Bain, one of the creators of the Net Promoter Score, offers some suggestions.
“Remember that each transaction your company has with customers is an opportunity to create a promoter. But the customer experiences that matter most are ‘moments of truth,’ those few contacts that hold the greatest potential to delight—or alienate—customers”. Bain offers a 5 point customer feedback checklist to assist you in setting your customer service strategy, company-wide.
- Have you reached a consensus on your business’s five most critical “moments of truth” with customers?
- Are employees and managers getting customer feedback routinely, on a daily or weekly basis?
- Do you let customers know the impact their feedback had on improving your processes?
- Do you know what percentage of detractors your operations now convert into promoters through service recovery processes?
- Can you put a dollar value on turning a detractor into a promoter?
Net Promoter, Net Promoter Score and NPS are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.
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