What is Net Promoter Score (NPS)?
Net Promoter Score or NPS is a single question that will help measure the complete customer experience and the loyalty of the customer towards the brand as well. The goal of every company in the world is to grow. The best advocates of the company are the customers who have used our services. In order to figure out how the company will grow in the future, NPS will reveal how many customers will refer the company to their friends and colleagues.
There is usually only one correct question in NPS:
On a scale of 0-10, based on your whole experience with our company/product/service, how strongly would you recommend us to your friends and colleagues?
According to the kind of product/service/industry a company offers, the context of the question will vary. The company can also change the scale titles like ‘Not likely to very unlikely’, ‘extremely likely to the most likely’, yes to all, etc.)
Responses from customers are distributed as follows:
Based on the customer responses we distribute them as Promoters, Passives, and Detractors.
Promoters:
Promoters are customers who respond 9 or 10 and they have experienced great results with your product/service. So, they will continue to do business with the company and most likely to buy the product/service again and share their positive experience with others as well. This will ultimately result in an increased probability of the customers referencing the product/service to their friends or colleagues.
Passives:
The customers who had a satisfactory experience with your products/services and responded 7-8 are the passive customers. If there is an opportunity, they are likely to switch to competitors. Passive may or may not be willing to purchase the product/service again, and will not be very definitive in suggesting the product/service. Therefore, we cannot predict or estimate how likely they will refer a product to their friends or colleagues.
Detractors:
Customers responding 0-6 can be termed as Detractors and had a bad experience with your products/services. So, they are most likely to switch to the competitors’ products/services. They are highly likely to be reluctant to purchase the product/service again, might be hesitant to refer a friend and colleague. Detractors will spread negative word of mouth and damage the brand of the company.
Calculation Methodology
To calculate NPS, simply subtract % Detractors from % Promoters. A simple formula to calculate the NPS score is explained below:
NPS is calculated without taking into consideration passives. The scores vary from -100 to +100 (-100 if all the respondents are Detractors and +100 if all the respondents are Promoters).
%Promoters = (Total Promoters in numbers / Total Responses) X 100
%Passives = (Total Passives in numbers / Total Responses) X 100
%Detractor = (Total Detractor in numbers / Total Responses) X 100
%Promoters = (Total Promoters in numbers / Total Responses) X 100
%Passives = (Total Passives in numbers / Total Responses) X 100
%Detractor = (Total Detractor in numbers / Total Responses) X 100
Note: Add the simple calculator and ask the user to put the numbers to get the NPS scores and give some recommendations.
The NPS benchmark
NPS Benchmark varies across industries and countries. Therefore, you need to compare the NPS with industry or country-specific benchmarks. NICE Satmetrix Systems surveyed companies across different industries and here are the results.
Advance Net Promoter Score (NPS)
Customers are then asked additional questions (sometimes optional) based on their responses. This can be very helpful for the company to understand what is making customers happy or unhappy. One open-ended question:
- Promoters: What did you like the most about our product?
- Passives: What do you think we should improve upon?
- Detractor: What do you think we should improve upon?
Call our NPS expert if you have some specific query and we will be more than happy to discuss it with you!
Net Promoter Score®, Net Promoter, and NPS® are registered trademarks of Bain & Company, Satmetrix Systems, and Fred Reichheld.
