Customer Service Solutions
Net Promoter Score (NPS) programs ask just one quantitative question: "How likely are you to recommend this business to a friend or colleague?" Tap into the collective knowledge of our CX Specialists and find out how to improve your business' NPS.
What Is The 'Net Promoter Score'?
As an index ranging from -100 to 100, the Net Promoter Score (NPS) measures your customer’s willingness to recommend your company’s products or services to their friends, family and colleagues.
NPS is often used as a proxy to gauge your customer’s loyalty to your brand or their overall satisfaction with your product or service.
How Is It Calculated?
Your customers are asked to rate on an 11-point scale their likelihood of recommending your company or brand to a friend or colleague. Based on this rating, your customers are then classified into three categories: detractors, passives and promoters.
Detractors give your brand a score of 6 or below. It is unlikely that they will purchase again from your business or company as they are not particularly thrilled by the product or service. They could potentially damage your company’s brand or reputation through negative word-of-mouth or rants on social media.
Passives gave your brand a 7 or an 8. They’re usually satisfied and will probably buy from you again, but they could just as easily switch to your competitors if they’re given the opportunity. They’re unlikely to spread any negative word-of-mouth, but they’re not excited enough about the service you provide or the product to promote or rave about them.
Promoters answer 9 or 10. They’re repeat buyers and they love your product or service. They’re the enthusiastic evangelist who recommends your company’s product or service online, or through word-of-mouth to other potential customers.
Considering the above answers, your NPS is calculated by subtracting the percentage of detractors from the percentage of promoters.
This will then generate a score between -100 and 100.
If all of your customers gave a score of 6 or below, then you’ll get an NPS of -100. If all of your customers answered 9 or 10, then your NPS would be 100.
I have my NPS. Now what?
Because it is so easy to understand, the Net Promoter Score is a popular indicator across many industries.
It is a simple and straightforward metric that can be shared throughout your business, from the top right down to your front-line employees. It has been proven as a motivator to encourage your employees to provide the best possible customer service.
The ultimate objective, of course, is to transform those customers who were detractors or passives into promoters who will spread the word about your business and therefore drive improved profit and revenue.
A lower NPS is an early warning that you need to dig deeper into potential customer loyalty and satisfaction issues, while a higher NPS suggests that you should take time to understand what you are doing well so that you can focus on doing more of it.
But if you have a low NPS, don’t panic. NPS scores are usually quite low. Fred Reichheld compared 400 companies across 28 industries in 2003 (HBR Article “The one number you need to grow”) and found that the median score was just 16.
How Do I Make It Work For My Business?
Just calculating your NPS every once in a while isn’t going to bring any longstanding value to your business. It needs to be part of a broader customer experience program that ensures your company lives and breathes by it.
Senior leadership needs to make a strong commitment to improving the customer experience. Without this commitment, it will be difficult for any department within your company, be it operations, sales, marketing or even the customer experience team to get the support it needs to implement improvements. Your NPS program needs to be a company-wide effort that is driven top-down.
The program needs to be closed-loop. Your customer-facing employees need the tools to be able to act real-time on feedback and insights gained from your customers and the rest of the business. Everyone across your business should be able to learn and improve from the data you obtain from the program.
And finally, your company needs to be able to gain real insights from the data obtained. The NPS may seem simple on the surface, but unless your business takes the time to really delve into the data and figures and understand the causes of your detractors and the reasons your customers turned into promoters you miss out on the opportunities it presents for future revenue growth, profitability and sustainability.
In simple terms, this means taking the time to read through the comments, tagging and classifying them, and then looking for the patterns. Your leadership team needs to understand the ‘why’ behind the data scored and adapt and evolve accordingly.