What is a Net Promoter Score?

June 6, 2017

Your Net Promoter Score (NPS) is a powerful tool to measure client satisfaction and loyalty with one question. This piece of the customer experience predicts business growth and helps jumpstart enhanced business performance. It looks like this:

 

On a scale of zero to 10, with 10 being highest, what’s the likelihood that you would recommend us (our company) to a friend or colleague?

 

Net Promoter Score is a key performance indicator. It came into the business world back in 2003 when Fred Reichheld wrote about it in his Harvard Business Review article "One Number You Need to Grow". The goal of the question is did your company do a good enough job to rate at a nine or 10?

I like implementing this at the beginning of partnering with clients because this simple survey can give some wonderful insight into opens for action in your small business. Most of your clients will take a short survey, and you can opt to have NPS as its own survey or blend it all together with additional questions to gather more specific feedback. All you have to do is ask!

 

If an NPS only survey, then I recommend having it be required and then including 1 or 2 optional other questions to keep it short. The first being, why did you give the score you did. And second (if not a 10) what could we do to increase our score by a point? Or what can we do to get a 9 or a 10 in the future if you want some potentially lofty goals from low scoring clients.

 

The score, on a scale of zero to 10, falls into three groups. Here’s how the scoring works:

 

9-10=Promoters

7-8=Passives

6 or below=Detractors

 

A promoter is pretty straight forward, so I’ll go into further detail on NPS passives and detractors. Passive means you don’t know if they like you, are indifferent to you or are getting ready to leave you at any moment. They may not say anything bad, but they probably won’t say anything good either. Detractors, NPS of 6 or lower, these buyers don’t buy often, tend to be more price-sensitive, and may also share their distaste with your brand with the people they meet every day.

 

To calculate your Net Promoter Score, take the percentage of promoters (9/10s) and subtract the percentage of detractors (6s and under). Like so:

 

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

 

And that’s your Net Promoter Score; this number is shown a number, not a percentage. Instead of 50%, the NPS is 50. And yes, you can have a negative NPS. These scores can range from -100 to +100. I’ve seen companies calculate the score with a simple average of all respondents or use a smaller scale (1-5, 1-7, even 1-10 ratings can skew data), potentially leading to business decisions that overlook potential issues.

 

The average company scores less than +10 on NPS, while high performing brands fall between +50 and +80. These numbers can vary greatly based on industry. 

The ultimate goal of measuring net promoter score is to increase promoters and decrease detractors and create a feedback loop where you can implement the changes your customers want or build on what people love about your brand.

 

Things to remember about Net Promoter Score:

 

First, this is an indicator that works to measure your relationship with your customer as opposed to an individual transaction. When I working in inside sales for a nation e-commerce company, we would have to ask customers to take a survey at the end of our call. This however skewed data a bit because it was inherently focusing on the most recent interaction with the company, not the overall experience.

 

Second, NPS is for your team and brand experience not for rating individuals. The question asks about the likelihood to recommend a company, not an individual. Although, a bad experience with an individual could impact the client’s NPS rating.

 

Third, Net Promoter Score is about the entire experience. I recommend asking a consultant about when and where you ask this question. Using the NPS question in the right place and at the right time will give you more valuable feedback.

 

Lastly, NPS means absolutely nothing unless you do something with it. I can’t tell you the number of small businesses that have a NPS measurement in place but don’t look at it regularly. If you ask for feedback there is the expectation of action. Think about it this way: you ask a friend for advice and then you not only ignore what they tell you, you put your fingers in your ears and sing a song while they tell you. Does that friend want to help you the next time you ask? Probably not.

 

NPS can be one of the biggest drivers for reducing buyer churn and increasing business growth objectives, but only if you implement it correctly.

Save 25% off on your experience survey!

 

For just $200, you can get the feedback you need to drive promoters of your brand and get referral business. Contact Charisma Communications full-service marketing firm in Tampa today to get started!

 

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