What’s a Net Promoter Score anyway? Lifting the lid on NPS
3 min read
You may have heard us talking about our excellent Net Promoter Score (NPS) and how very proud we are of it, but what on earth is an NPS anyway?
The idea first came about back in 2003 when Fred Reichheld was looking for a new way of testing brand loyalty and predicting customer purchase and referral behaviour. NPS quickly became a gold standard method for measuring satisfaction and is still going strong nearly 20 years on.
At Cantarus, we started using NPS back in 2017 as we needed a consistent metric to track customer satisfaction. What started as +46 (just below excellent) soon grew to +82 (far above world-class), but what do these scores mean, and how are they calculated?
What is an NPS?
In a nutshell, NPS is a simple scoring system for companies to ask their customers one very simple, but effective question:
On a scale of 0-10, how likely are you to recommend this product/service to a friend?
Customers then respond from 0 (very unlikely) to 10 (very likely) and are then segmented into 3 groups based on their responses:
- Promoters (score 9-10): Loyal customers who will continue buying and referring others, encouraging business growth.
- Passives (score 7-8): Satisfied but indifferent customers, who aren’t talking about you at all.
- Detractors (score 0-6): Unhappy customers with a negative perception of your company, likely to warn others against engaging with your company.
Once you have a solid number of responses you can get started on calculating an NPS.
Calculating the score
The NPS calculation subtracts the percentage of Detractors from the percentage of Promoters. Passives aren’t directly used in the calculation, but the percentage of passives will still affect your score.
So for example, if 10% of respondents are Detractors, 20% are Passives, and 70% are Promoters, your NPS score would be 70-10 = 60.
What does 'good' look like?
The most you can score is 100 and the lowest is -100 (yikes), but you don’t have to reach 100 to be successful (in fact, an NPS score of 100 would be highly suspicious) – anywhere from 50 upwards is considered good to excellent, and 70+ is world-class.
Note that every industry varies, so it is important to see how you compare to others and benchmark where your business sits against its competition.
Be careful to compare yourself to similar organisations, as what might be a good score in your industry, might be very low in another. What is perhaps most important though is to make sure that you are frequently reassessing your score and tracking it over time.
How do I get started?
There are lots of ways to calculate your own NPS, whether that’s through your website, email surveys, or via mobile pop-ups.
Strategies to help with ongoing monitoring might include:
- A pre-survey email communication from a senior person in your company asking clients to respond, and explaining the importance of it to both them and your business,
- A multi-email communication plan over a 1-week timeframe encouraging users to respond,
- Respondents being entered into a prize draw or given the option for a charitable donation,
- Posting your NPS to your website to demonstrate your commitment to providing a good service, evidencing those responses won’t be ignored,
- Emailing clients after the survey with follow-up questions, informing them of any actions taken or improvements to be made, and stressing the value of their feedback,
- NPS-specific tools like CustomerGauge and Smart Survey,
- An instant in-app survey or poll functionality to make it a quick process with minimal friction.
Put simply, if your strategy for collecting NPS data is good enough to ensure users are actually completing your survey, then you should soon have your hands on a figure. Then, you’ll have taken the first step in having a consistent and reliable method for tracking your customer satisfaction.
Once you’ve calculated your score, why not take a look at our tips on understanding and improving your NPS score?