What Is Net Promoter Score℠?

No custom experience (CX) measurement program is complete without the Net Promoter ScoreSM (NPS®). Through this one score, you discover a wealth of information that can help you improve your customer journey, reduce buyer friction, and, ultimately, boost sales.

The NPS® shows you:

• How your customers perceive your brand
• If your business is likely to grow
• How effective recent CX changes have been

Finding your NPS® is also the first step toward making meaningful improvements to your customer experience.

If your company isn’t using your NPS® to drive growth, read on. This article covers what the Net Promoter Score℠ is, how to calculate it, and what you can do to start improving your score.

What Does Net Promoter Score℠ Mean?

The Net Promoter Score℠ is a metric that measures customer loyalty. It asks one question: On a scale of 0 to 10, how likely are you to recommend our company?

Since it was first introduced in 2003 by global consultancy Bain & Company, it’s become one of the most popular market research methods.

There are a couple of good reasons for its dominance.

First, it’s short. It takes customers less than one minute to respond to an NPS® survey. As a result, more people are likely to answer it.

Second, it’s telling. It shows how effective an organization is at “generating relationships worthy of loyalty.”

Bain Fellow, Fred Reichheld, developed the Net Promoter Score℠. He and his team had a quest: to develop a customer satisfaction survey that reveals what customers are feeling while also helping companies take ownership of their CX.

Knowing that longer surveys have lower response rates, they took a radically simple approach. One question. One score.

The team at Bain tested several questions, but the NPS® question turned out to be the most useful for predicting customer behavior.

Over a decade later, it continues to be the best methodology for gauging sentiment.

RELATED ARTICLE: Change How Your Customers Experience Customer Service

How To Calculate Net Promoter Score℠

To calculate your Net Promoter Score℠, first divide your survey respondents into three categories.

1. Promoters

These are your loyal customers. They might even be brand advocates. They’re the people who will continue buying your products or services.

Having a high percentage indicates your business is on track for growth.

Your promoters are the people who answered the NPS® question with a 9 or 10. They’re extremely likely to recommend your company to others.

2. Passives

These customers are more or less neutral. They are satisfied with your products. But they’re not exactly impressed.

If they find a competitor they like better, you’re going to lose them.

Having a lot of Passives doesn’t bode well for growth. It’s a red flag that it’s time to look more deeply into your customer experience and make improvements.

These are the NPS® survey respondents who answered 7 or 8.

3. Detractors

These customers aren’t happy. They’re probably not going to buy your products again.

But there’s an even bigger problem. Detractors are also a risk to your brand. These people might leave a negative review online or tell their networks about a negative experience with your brand.

A high percentage of Detractors indicates that growth might be out of reach—at least until you turn around customer sentiment.

Detractors responded to the NPS® question with a number between 0 and 6.

FROM ONE OF OUR PARTNERS: How to Get Customers to Leave Reviews for Your Local Home Services Business

Once you group your respondents into these categories, you can calculate the Net Promoter Score℠ for your business.

The NPS® formula is: % of Promoters – % of Detractors = NPS®

You can determine the percentage of Promoters and Detractors by dividing the number of each by the total number of respondents.

For instance, say you have 200 NPS® survey respondents. There are:

• 130 Passives
• 50 Promoters
• 20 Detractors

You only need the percentage of Promoters and Detractors, so don’t include the Passives in your NPS® calculation.

To find the % of Promoters, divide 50/200. The result is .25 or 25%.

To find the % of Detractors, divide 20/200. The result is .10 or 10%.

Now, subtract 10 (% of Detractors) from 25 (% of Promoters).

25 – 10 = 15

Your Net Promoter Score℠ would be 15.

The NPS® will always be a number between -100 and 100. If you have a high percentage of promoters compared to detractors, your NPS® will be above 0. If your detractor percentage outweighs your promoter percentage, your NPS® will be negative.

What’s a Good NPS®?

The higher your score, the better. Anything above 0 is considered good. Here’s a breakdown of a good score, in general:

• 0-20: Okay, but there’s a lot of room for improvement.
• 20-50: Good. Don’t make drastic changes to your CX, but continue gathering customer feedback and looking for ways to improve.
• 50-80: Excellent. Your company has a lot of loyal customers. Continue monitoring customer sentiment so you are ready to pivot if your NPS® drops.
• 80+: Customers love your brand, and your business is on track for growth.

What’s considered good does vary by industry.

In retail, the average NPS® is 41. So, anything above that indicates you’re on track. In healthcare, a score between 30 and 40 is considered strong. In consulting, the average NPS® is 76.

Anything below 0 is a bad Net Promotor Score.

If you have a negative number, you’re at risk of losing customers. You should assess your reputation. Read online reviews. Explore customer emails, voice recordings, and social media to learn more about how customers feel about your brand.

You can also reach out to Detractors to find out what made them dissatisfied. If you dig deep enough into customer feedback, you should find trends.

Once you know what the main problems are with your customer experience, you can start brainstorming solutions.

RELATED ARTICLE: Simplify Your Customer Experience Improvement with These 6 Tips

Advantages and Disadvantages of Net Promoter Score℠

There are plenty of advantages to using the Net Promoter Score℠ to better understand your customers.

Companies use NPS® because it’s so good at reflecting consumer sentiment and helping your business predict future customer behavior.

What percentage of customers will keep buying our product? How many aren’t likely to be repeat customers? Can we sustain our business with those numbers?

The Net Promoter Score℠ helps you answer all those questions.

It’s also useful because it’s feedback-friendly.

Because it’s one question, you’ll get a higher response rate than you would with other surveys.

Even better, you can put out an NPS® survey regularly to gauge feedback without frustrating your customers.

If you’re worried about customer sentiment, you might set up an NPS® survey to go to your email list every quarter. If you already have a high score and simply want to monitor customer loyalty, you might send it out every six months or once a year.

A final advantage is that it makes a great benchmark. You can calculate your score with an initial survey. Then, take that information back to your marketing and customer care teams to brainstorm improvements.

Make some strategic changes, then issue another survey a few months later to see how the score changes based on those improvements.

NPS® does come with some disadvantages, however.

For one, it doesn’t work well for startups and relatively new companies. The NPS® is only effective for mature brands with an established customer base.

It can also cause you to overlook Passives because they aren’t factored into the score. But these customers matter to your business. Not only can they be turned into Promoters if you address their pain points and boost your CX, but they can also provide insights into your customers’ problems.

FROM ONE OF OUR PARTNERS: 4 Ways to Automate Customer Service

How You Can Start Improving Your Net Promoter Score℠ Right Now

Improving your NPS® can unlock business growth. But nudging that score up will take some work, as you’ll need to address the issues your customers are having and understand what people like about your brand and its products.

If you want to start improving your Net Promoter Score℠ now, here’s what you can do to get things moving in the right direction:

• Identify all your customer channels. Customer chat. In-store interactions. Social media. Your website. List all the ways your brand interacts with customers. You’ll use this list to brainstorm ideas for improving the customer experience.
• Browse your online reviews. Focus on negative reviews. Take note of issues your customers talk about so you can hone in on their pain points.
• Implement feedback loops. Determine what channels you can use to gather feedback regularly. Good options include email surveys, phone conversations, and SMS messages if you’re a service-based business. Decide how you’ll track your feedback and who’s in charge of managing the flow of insights.
• Create a feedback request email. Draft a simple email asking for feedback. You can send it to all the customers on your email list. If you have a high number of customers, make sure you have a system in place for gauging sentiment. You can use a customer engagement platform to gather and analyze your feedback.

Net Promoter®, NPS®, NPS Prism®, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., NICE Systems, Inc., and Fred Reichheld. Net Promoter Score℠ and Net Promoter System℠ are service marks of Bain & Company, Inc., NICE Systems, Inc., and Fred Reichheld.