Benefits of Net Promoter Score®
From gauging customer sentiment and tracking how it changes over time, to helping you to better benchmark your performance against competitors or measure your likelihood of gaining repeat business, the benefits of running NPS® Surveys can be wide ranging.
But for NPS to be truly useful you need to be clear from the outset about what you should be asking, how to calculate your NPS and what constitutes a good NPS score. Do this and you’ll gain the greatest value from running one.
What is Net Promoter Score?
Essentially NPS is a standardised metric, which you can use to measure how happy customers are with your business.
It’s based on the idea that the most important indicator of a customer’s satisfaction with your company, service or product is whether they will recommend it to a friend, a family member, or a colleague. The advantages that spin out of measuring such a metric are multiple.
The Net Promoter Score question
The NPS question involves asking your customers the following – “How likely is it that you would recommend our [company] [product] [service] to a friend or colleague?” – and getting them to score their response using a scale from 1 to 10.
Based on their answers, respondents are then placed into three groups. Those offering a rating of between 1 and 6 are labelled as “detractors”, those answering 7 or 8 “neutral” and those scoring 9 or 10 “promoters”.
Having identified your total number of promoters and detractors, the responses are then collated and calculated to provide the overall score.
How to calculate your NPS
After collating your responses, you will need to calculate your NPS. This is achieved by working out the difference between the proportion of promoters and detractors, to generate a score of between -100 and 100.
Depending your sample size there are two main ways of doing this:
- A simple manual calculation: useful for when you only have a small number of responses
- The NPS Excel formula: useful for larger data sets, which would be more time consuming to calculate manually
However, some NPS survey software, including our very own tools, include a built-in Net Promoter Score question, collecting data that’s automatically processed to show you the correct score via the reporting tools for that survey. If you’re ready to get started, you can quickly set up a survey online today.
What is a great NPS score?
Technically any value above zero will represent a good Net Promoter Score, since this implies that you have more promoters than detractors. For a great score, you’re looking at anything above 50, while scores above 70, are viewed as outstanding and rare. However, given that there isn’t a universal standard for NPS, most companies prefer to compare their scores to other businesses in their industry.
The many benefits of NPS
Ultimately the more insight you have about what customers think of your business, products and services, the more – and more useful – information you’ll have available to take positive actions. It’s why the benefits of NPS are so wide ranging.
Think of NPS as a growth indicator, essentially a customer satisfaction metric that you can use to your advantage to find out:
- How satisfied consumers are with your products/services.
- How loyal they are to your brand.
- How likely they will be to recommend your company to others.
If your organisation runs regular customer surveys, whether that’s customer satisfaction surveys, customer service surveys, or any other type, collecting NPS data, whether that turns out to be a good or bad NPS can be extremely useful in informing the future actions you need to take.
For example, if you ran an NPS survey as part of a wider customer satisfaction project and it revealed a healthy number of promoters, you could use this to help inform future sales, with increased confidence that your customers would buy from you again.
A great NPS example can be provided by one of our case studies, which highlights the work that our client IKEA did to better engage and improve their customers’ satisfaction levels. Following the deployment of their strategy IKEA’s Net Promoter Score jumped from 25 to 70.
Similarly, even if you got a bad score, you’d have the advantage of turning this into a positive by using this valuable insight to inform you about what areas of your business you need to change and improve.
Get started with NPS
NPS®, Net Promoter® & Net Promoter Score® are registered trademarks of Satmetrix Systems, Inc., Bain & Company and Fred Reichheld.