What is the Net Promoter Score formula and how does it work?
Think of one of your favorite personal brands. With the brand in mind, answer this question:
‘On a scale of 0-to-10, how likely is it that you would recommend this brand to a friend or colleague?’
As a customer, this question forces you to place a value on your experience with the service and asks you to stand by it. Your colleagues and friends are people who trust you for your good sense of quality, and if they have a terrible experience after following your recommendation, their opinion of you will also be marred by the negative association.
The NPS Process
The scale is rated from 0 (not at all likely) to 10 (extremely likely). Depending on the responses, customers fall into one of 3 categories:
Promoters are customers who respond with a score of 9 or 10,, and are your most loyal and enthusiastic customers.
Passives are customers who respond with a score of 7 or 8. They are satisfied with your service but not happy enough to be considered promoters.
Detractors respond with a score of 0 to 6, and are unlikely to use your service again, and may even discourage others.
Net Promoter Score calculation
Subtracting the percentage of detractors from percentage of promoters. (The percentage of passives is not used in the formula.)
The NPS Calculation
Total % of promoters – total % of detractors = net promoter score
What is a good NPS survey?
> 0 is "good". It means that your audience is more loyal than not.
> 20 is considered "favorable"
> 50 is excellent, and
> 80 is world class.
For example, if 10% of respondents are detractors, 20% are passives and 70% are promoters, your NPS score would be 70-10 = 60. Your NPS could range from -1 to 100. The ideal score would be 100, based on 100% of customers being promoters.
NPS Survey Best Practices
Send the survey within 7 days of the service. The service provided will be fresh in the customer’s memory to form a substantive opinion.
Measure NPS regularly, every 3, 6, or 12 months, to track changes in customer sentiment.
An average response rate for NPS surveys is between 30-40%. Measure your response rate and calibrate.
What are the benefits of NPS?
Track progress of your customers’ experience
It will help you understand your customers better and see how they respond to your service.
Identify customers at risk using another service so you can take steps to win them back
A low NPS from a customer gives you the signal that they’re not happy. Knowing when your customers are on the brink of leaving can help you intercede quickly and help close the loop on issues.
Engage with dis-satisfied customers
Having these insights helps you to take the right actions, and improve customer experiences. They also help you to create and improve your services with this information in mind, so you never stop learning about what your customers want.