Net Promoter Score® Example
While running NPS® Surveys can provide a great overview of how happy your customers are with your business they can also highlight the numbers that are unhappy. This is equally important, because if you’re to improve your overall Net Promoter Score, you will need to reduce your number of unhappy customers, while further increasing the numbers that love your business, which any good Net Promoter Score example will demonstrate.
By focusing on exactly this and using NPS surveys to better understand why some of their customers were unhappy and identify ways to resolve this, our client IKEA’s NPS example perfectly highlights the value of what can be achieved through NPS.
But before we explore this in a bit more depth, it’s important to properly understand Net Promoter Score.
What is Net Promoter Score?
Essentially the definition of Net Promoter Score 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 key indicator of satisfaction with your company, product or service is whether a customer will recommend a friend, family member, or colleague to use or purchase it.
As far as NPS questions are concerned the key one you should be asking is “How likely is it that you would recommend our [company] [product] [service] to a friend or colleague? – and getting them to rate their response on a scale of 1 to 10.
Based on their answers, respondents are then placed into three groups, with those who’ve offered a rating of between 1 and 6 labelled as “detractors”, those between 7 or 8 “neutral” and those answering 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.
Calculation of Net Promoter Score
After you’ve collated your responses, you can calculate your NPS by working out the difference between the proportion of promoters and detractors, to generate a score of between -100 and 100.
Depending your data size there are two main ways of doing this:
- A simple manual calculation – ideal when you have a small number of responses
- NPS Excel Formula – better for larger data sets, which would be more time consuming to calculate manually
However, some NPS survey software, including our very own is now available with a built-in Net Promoter Score question, that will collect data that’s automatically processed to show you the correct score via our reporting tools.
How do I know what is a good NPS score?
While views on this can vary from one industry to the next, technically any value above zero will represent a good Net Promoter Score, since this implies that you have more promoters than detractors. Beyond that a score above 50 is viewed as excellent and above 70 outstanding and rare. However, given that there isn’t a universal standard for NPS, most companies will compare their scores to other businesses in their industry.
Benefits of Net Promoter Score
The benefits of using NPS can be wide ranging. While the advantages of a high NPS score could include anything from helping to grow your customer base, to increasing the number of products and services that existing customers buy from you, a low NPS could help inform you about areas of your business you need to change and improve.
If your organisation runs regular customer surveys, whether that’s satisfaction surveys, customer questionnaires, 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 included an NPS question as part of a wider customer satisfaction survey 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.
Similarly, even if you received a lower score than you’d hoped for, this could be turned into a positive by informing you about what areas of your business you need to change and improve.
The value of the Net Promoter Score example
Re-visiting our earlier Net Promoter Score example, our client IKEA employed NPS as part of a business strategy to improve understanding of their smaller group of unhappy customers, and in doing so resolve more of their issues and improve their overall NPS.
When employing this strategy in tandem with switching to mobile surveys utilising our survey software’s SMS feature, IKEA were able to increase their overall Net Promoter Score from 25 to 70.
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