The Net Promoter Score (NPS) is a popular metric that measures customer loyalty and satisfaction. It predicts customers’ impressions of a brand based on the likelihood of a positive recommendation.
Businesses have long been crunching the numbers to calculate their NPS, but have they really been doing it right?
To help you measure and improve NPS effectively, we put together a guide. If you’re interested, read on.
Net Promoter Score (NPS) is a number that reflects how likely customers are to recommend your company to others.
The highest NPS can go is 100% which would mean that all your customers are delighted with your brand. It’s almost impossible to reach that number but your goal should be to get as close to that as possible. NPS can also be a negative number.
The traditional NPS question is “On a scale of 1 to 10, how likely are you to recommend us to someone else?” Based on their answer, customers are classified as:
Promoters (9-10): repeat customers who are likely to recommend your business to family, a friend or colleague.
Passives (7-8): customers who are satisfied with your business but don’t actively recommend it.
Detractors (0-6): customers who are unlikely to recommend your business, and they’re possibly close to churning.
NPS can be calculated by taking the number of promoters and subtracting the number of detractors, then dividing that number by the total number of respondents. The last step is to then multiply the remainder by 100 to uncover your score.
(Number of Promoters - Number of Detractors) / (Number of Respondents) x 100
So, your final NPS score is the percentage of promoters minus the percentage of detractors. This means that the NPS score range is between -100 and +100.
Let’s say you sent the standard survey (often as a pop up in your site or via email). Suppose that you received 1,000 survey responses and you’ve classified each response based on the score:
Based on these numbers, you have:
And your final NPS score is 50% - 20% = 30%
If you don’t have a dedicated software to calculate NPS, you can easily do it in a spreadsheet. Check out the NPS calculator template we built in Google Sheets.
Whether an NPS score is good or bad varies by industry and over time. Generally, you don’t want a negative NPS score (which means that you have more detractors than promoters).
Compare the number of promoters and detractors over time. Because NPS is about subtracting the percentage of detractors from the percentage of promoters, you can focus on minimizing detractors and turning them at least to passives by offering better support to resolve their complaints.
To get a better idea about where you stand in terms of customer experience, it also helps to take a look at industry benchmarks.
Just knowing and tracking your NPS isn’t enough — you need to take steps to improve it over time. Not only to achieve increased customer satisfaction and loyalty, but to also demonstrate growth and improvement in customer experience to stakeholders.
Here are six tips to help you improve net promoter scores (NPS) and customer satisfaction:
The ‘when’ in sending NPS surveys matters because you need to be able to show the metric’s progress over time, without leaving too much time between intervals or annoying customers by surveying too frequently.
The standard business practice is sending quarterly surveys to all customers, especially in the SaaS space.
NPS has a few issues from a statistical standpoint. One thing to consider is that, since detractors are classified based on a grade of 0 to 6, any bump in the detractors’ scores will not be reflected in the NPS score.
For example, if 80 percent of your detractors gave a score between 0 and 4 in Q1, and in Q2 and Q3 they started giving you a 6, there’s significant progress in customer satisfaction even if it’s not reflected in NPS.
So, it pays to look at the average scores of promoters, detractors and passives and track them over time.
NPS is useful, but it shouldn’t be considered alone. A promoter or a passive can have an issue with your product, but they may still like your business as a whole. Using event-based CSAT survey questions (e.g. after a purchase or other action) alongside NPS gives you the opportunity to create strong customer relationships by addressing existing issues.
Director of Customer Success at Acquire
Customer Success Manager at Mixpanel
A survey is an important piece of feedback from your customer. They expect you to follow through – 77 percent of customers have a more favorable view of brands that ask for and accept customer feedback.
As well as proving to customers that you care about their opinion, following up helps reduce churn. Read comments carefully and reach out to customers, especially if they’re detractors and ready to jump ship at any given moment.
Many problems reported in NPS surveys are product-related, at least in the SaaS and consumer goods industries. This means you need to:
You want to address detractors of course, since they’re probably the ones who most affect your retention metrics. But, promoters give you a wealth of opportunity as well.
As entrepreneur and SEO expert Neil Patel mentions in one of his blogs, “Promoters love your product and don’t care who knows it.” You can ask them to spread the love or offer them the chance to take advantage of your best features, promotions, or products.
For example, you can ask promoters to:
What’s important here is to build good relationships with your promoters. Be sure to engage them and give them back the value they’re giving you.
NPS is a good metric to keep track of — it helps you gauge overall customer loyalty and identify issues over time. But, it’s just one of the customer experience metrics you can use, and you should always use it alongside other metrics.
How are you using net promoter scores? Let us know in a comment below.
Nikoletta is a Content Specialist at Acquire. She's a writer and editor with an avid interest in data, tech, communication, and the customer journey.