What is Net Promoter Score (NPS) and How do I Measure It?

We’re living in an increasingly connected world, where one bad interaction with a customer doesn’t just cost you that customer but also prospective customers due to word-of-mouth.

In fact, 95% of customers will tell others about a bad experience and most people trust online reviews as much as personal recommendations.

Ensuring that all your customers have great experiences and rooting out the causes of dissatisfaction with your business is becoming more important than ever before.

This need for better customer experience is why the Net Promoter Score (NPS) is one of the most important metrics every company should monitor.

Overview of the Net Promoter Score (NPS)

NPS is a simple way to measure how satisfied customers are with your product or service. It’s based on asking your customers one simple question:

“How likely are you to recommend our company to a friend or colleague?”

Your customers can answer on a scale of 0 to 10. Respondents are then divided into Detractors (0-6), Passives (7-8), and Promoters (9-10).

Measuring your Net Promoter Score consistently provides your company with an accurate benchmark for improving customer experience. Which in turn leads to more revenue, less churn, and stronger brand loyalty.

How to measure NPS

Most traditional surveys are long, complex, and often yield inaccurate results. NPS surveys, on the other hand, are not only easy for your customers to answer but are also easier to set up and interpret.

There are just three steps to measuring your NPS.

Step 1: Survey your customers

Gauging your NPS starts by asking your current customers this question:

“How likely are you to recommend our company to a friend or colleague?”

Your customers then rank their likelihood on a scale of 0 to 10, with 0 being highly unlikely and 10 being extremely likely.

Here’s an example of what the NPS survey looks like:

Step 2: Segment your respondents

Depending on what rating a customer gives, they’ll be segmented into one of three groups:

• Promoters (9-10): These are your most loyal customers. They are repeat buyers and love your product or service. Promoters tend to drive more customers to your company because they recommend you to others.

• Passives (7-8): These customers are just OK with their experience and aren’t loyal to your brand. Given time, some Passives may become Promoters or Detractors.

• Detractors (0-6): These customers are unhappy with your product or service. They’re the most at risk of churning and can also stop other people from becoming customers when they share their bad experience with others.

Step 3: Subtract Detractors from Promoters

The last step to calculating your NPS is to subtract the percentage of Detractors from the percentage of Promoters.

Your NPS can range from -100 to 100.

So if all your respondents were Detractors, you’d have an NPS score of -100 and a score of 100 if everyone was a Promoter.

For example, say 100 people took your NPS survey and you got the following results:

• 55 responded with a 9 or 10 (Promoters)
• 40 responded with a 7 or 8 (Passives)
• 5 responded with 0 to 6 (Detractors)

To get your NPS you’d have to subtract 5 (Detractors) from 55 (Promoters): 55% – 5% = 50.

Getting an NPS of 50 or above is considered great and puts you right alongside companies like Amazon (57) and American Express (52). An NPS of 70 or above is considered world-class.

This might seem all too simple on the surface because it asks just one question, but your NPS can provide valuable insights for your company.For example, if you find that most of your Detractors are in a particular location or channel, you can look into how customers are treated at those places.

Once you start measuring your NPS it can even serve as a benchmark against which all other initiatives are measured. For instance, if you see an increase in Detractors after a change in your company’s policy, it can inform you that people hate the change.

You can even add an open-ended question to your NPS survey so that you can get feedback directly from the people who answered. Here’s an example of how this would look on your NPS survey:

Measuring your NPS consistently is important especially after important milestones like a sale or customer onboarding.

Getting the most out of your NPS

Though NPS is powerful alone, when integrated with data from a CRM, like Salesforce, it becomes a source of actionable insight. You can find patterns within segments of Promoters and Detractors that can help inform future decisions.

You can do things like:

• Cohort-based NPS analysis: This gives information about your NPS for different cohorts. For example, you can learn how long it takes a customer to see value with your product during a free trial, how onboarding improvements change your NPS survey results and how certain feature changes affect your NPS.
• Add more context to your Segments: You can learn more about who your Promoters and Detractors are, like their demographic, behavior, and even spending. You can know how much time Promoters spend on your website compared to Detractors? Or how many more customer service interactions Promoters have compared to Detractors? Which can tell you why a customer might be a Promoter or Detractor in the first place and provide possible solutions.
• Support frontline employees: Combining NPS data with Salesforce doesn’t just provide insight into a large group of customers, it can also provide insights on dealing with customers individually.

For example, sales and customer success teams can sort through their accounts to find happy customers (Promoters) who might be ready for an upsell. They can also use NPS data to find unhappy VIP customers at risk of churning.

Given how much more important customer experience is becoming, your NPS is one of the most important metrics you should be monitoring and improving constantly in your company.

The only way to regularly and accurately measure your NPS at important customer touchpoints is to automate the process with an NPS survey tool.

If you’re looking for a great NPS survey tool that also integrates seamlessly with your Salesforce data then get started today with a free trial of GetFeedback.