Net Promoter Scores and why they matter

Over the past two decades, net promoter scores have emerged as one of the most successful ways of gauging customer loyalty a business.

Used by most of the biggest companies in the world, they not only identify whether clients are happy with a business and its services, but are also often an indicator for growth.

So, what is a net promoter score (NPS), and how can it assist your business?

Net promoter scores

Net Promoter Scores and why they matter

Over the past two decades, net promoter scores have emerged as one of the most successful ways of gauging customer loyalty a business.

Used by most of the biggest companies in the world, they not only identify whether clients are happy with a business and its services, but are also often an indicator of growth.

Net promoter scores

So, what is a net promoter score (NPS), and how can it assist your business?

Net promoter scores

What is a Net Promoter Score?

 

First developed in about 2003, Net Promoter Scores are a simple way of gauging customer loyalty to a brand.

To begin to understand your net promoter score, the first question is:

‘On a scale of 0-10, how likely is it you would recommend our company/product/service to a friend?’

  • Those who respond 9 and 10 are considered Promoters, in that they are likely to be true advocates for your brand and exhibit value-adding behaviours like purchasing further products, or making positive referrals to other potential customers.
  • Those returning a score of 7 or 8 are considered Passives.
  • Those returning 0 to 6 are Detractors, meaning they are less likely to exhibit value-adding behaviour, and may actually work against your business.

What is a Net Promoter Score?

First developed in about 2003, Net Promoter Scores are a simple way of gauging customer loyalty to a brand.

To begin to understand your net promoter score, the first question is:

‘On a scale of 0-10, how likely is it you would recommend our company/product/service to a friend?’

Net promoter scores
  • Those who respond 9 and 10 are considered Promoters, in that they are likely to be true advocates for your brand and exhibit value-adding behaviours like purchasing further products, or making positive referrals to other potential customers.
  • Those returning a score of 7 or 8 are considered Passives.
  • Those returning 0 to 6 are Detractors, meaning they are less likely to exhibit value-adding behaviour, and may actually work against your business.

In other words:

  • Promoters (score 9-10) are loyal advocates who will keep buying and refer others, facilitating business growth

  • Passives (score 7-8) are satisfied but not passionate customers who may vulnerable to competitive offerings.
  • Detractors (score 0-6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth

Calculating the NPS

The net promoter score is an integer derived by subtracting the percentage of respondents who are Detractors from the percentage of respondents who are Promoters. Passives are simply included in the number of overall respondents.

 

Or:
(Number of Promoters — Number of Detractors) /
(Number of Respondents) x 100

An example:

Say for example you survey 1000 respondents, with 650 falling into the promoter category, 200 considered passives, and 250 detractors.

The equation would then equal: (650-250)/1000 x 100, which equals a net promoter score of 40.

Ultimately, the NPS can range from a low of -100 (if every customer is a Detractor) to a high of +100 (if every customer is a Promoter).

However, statistics indicate the average response is +32 while the lower quartile of performers are below zero and the upper quartile are above 70.

Net promoter Scores

Not an isolated question

Although the beauty of the NPS is in the simplicity of the initial question, it doesn’t work in isolation.

As part of customer feedback, businesses will first ask ‘how likely is it you would recommend our company/product/service to a friend?’ and then go on to identify areas for improvement along with why clients have given a business that score.

So, for example a simple customer survey will include the following questions:

  • On a 0-to-10 scale, how likely is it that you would recommend us (or this product or service) to a friend or colleague?
  • What is the primary reason for your score?
  • Why?
  • What could we do better?

Together, this information enables a business to identify how happy clients currently are with their services and the areas where they could improve.

Not an isolated question

Although the beauty of the NPS is in the simplicity of the initial question, it doesn’t work in isolation.

As part of customer feedback, businesses will first ask ‘how likely is it you would recommend our company/product/service to a friend?’ and then go on to identify areas for improvement along with why clients have given a business that score.

Net promoter Scores

So, for example, a simple customer survey will include the following questions:

  • On a 0-to-10 scale, how likely is it that you would recommend us (or this product or service) to a friend or colleague?
  • What is the primary reason for your score?
  • Why?
  • What could we do better?

Together, this information enables a business to identify how happy clients currently are with their services and the areas where they could improve.

Net Promoter Scores

Why Net Promoter Scores matter?

 

As a simple figure, Net Promoter Scores allow a business to quickly and effectively gauge exactly how a client feels about their products and services, and many Fortune 1000 enterprise managers note it’s the first figure they check each and every day.

Understanding your Net Promoter Score gives you an insight into whether your business is providing the customer experience you hope it does. Meanwhile, drilling into the why behind the score enables business to take action when products or services fail to hit the mark.

Importantly Net Promoter Scores capture consumer sentiment before it becomes negative word of mouth or a complete image crisis.

Why Net Promoter Scores matter?

As a simple figure, Net Promoter Scores allow a business to quickly and effectively gauge exactly how a client feels about their products and services, and many Fortune 1000 enterprise managers note it’s the first figure they check each and every day.

Net Promoter Scores

Understanding your Net Promoter Score gives you an insight into whether your business is providing the customer experience you hope it does. Meanwhile, drilling into the why behind the score enables a business to take action when products or services fail to hit the mark.

Importantly Net Promoter Scores capture consumer sentiment before it becomes negative word of mouth or a complete image crisis.

What can NPS be used for?

In addition to identifying the overall performance of an organisation, Net Promoter Scores can be used to measure a host of thing – from products to customer service, web pages, stores and even staff members.

They can also be employed to help you understand how you perform compared to your competitors and assist in helping you understand your customer better.

What can NPS be used for?

In addition to identifying the overall performance of an organisation, Net Promoter Scores can be used to measure a host of thing – from products to customer service, web pages, stores and even staff members.

They can also be employed to help you understand how you perform compared to your competitors and assist in helping you understand your customer better.

Net Promoter Scores

Improving your NPS

The best way to improve your Net Promoter Score is to consistently monitor it while looking at the following areas:

Net Promoter Scores

Improving your NPS

The best way to improve your Net Promoter Score is to consistently monitor it while looking at the following areas:

  • Your customer touchpoints
    What are the customer touchpoints you have with your consumer, and how effective are they?

 

  • Understanding what drives loyalty
    You can’t look to assess loyalty without understanding what dives it in your target market. You may need to undertake post-survey follow-u to really gauge the areas where you can improve the customer relationship.
  • Linking it with company KPIs
    The areas you assess and look to improve should be linked to your overall business keep performance indicators.

 

  • Creating a closed-loop system
    Every level of an organisation has a role to play in improving a net promoter score and the customer experience. Customer service attendants are the front line, middle management is responsible for training and coaching, while leadership fosters a culture of recognition and reward for a job well done.
  • Your customer touchpoints
    What are the customer touchpoints you have with your consumer, and how effective are they?

 

  • Understanding what drives loyalty
    You can’t look to assess loyalty without understanding what dives it in your target market. You may need to undertake post-survey follow-u to really gauge the areas where you can improve the customer relationship.

 

  • Linking it with company KPIs
    The areas you assess and look to improve should be linked to your overall business keep performance indicators.

 

  • Creating a closed-loop system
    Every level of an organisation has a role to play in improving a net promoter score and the customer experience. Customer service attendants are the front line, middle management is responsible for training and coaching, while leadership fosters a culture of recognition and reward for a job well done.

Feedback made simple

 

Our feedback kiosks and software automatically calculate and update Net Promoter Scores to help you better understand your business performance.

Offering NPS scores that are clearly defined, they allow you to be updated immediately when a Net Promoter Score is falling or alternatively gauge your score across specific time frames.

The intuitive software also offers helpful hints designed to assist with improvement, allowing business to drill down into the issues that matter most to their customers.

Meanwhile, feedback terminals can be easily positioned in sites where they are most likely to capture valuable data.

Net Promoter Scores

Feedback made simple

Our feedback kiosks and software automatically calculate and update Net Promoter Scores to help you better understand your business performance.

Net Promoter Scores

Offering NPS scores that are clearly defined, they allow you to be updated immediately when a Net Promoter Score is falling or alternatively gauge your score across specific time frames.

The intuitive software also offers helpful hints designed to assist with improvement, allowing business to drill down into the issues that matter most to their customers.

Meanwhile, feedback terminals can be easily positioned in sites where they are most likely to capture valuable data.