Did you know when retailers ask you to rate whether you’d recommend them they are fine-tuning their Net Promoter Score? Read on for our “Net Promoter Primer.”
A Net Promoter Score® (sometimes called “Net Promoter” or abbreviated as NPS®) is a quick and easy way to gauge customer loyalty. Most business owners and marketers know that success is all about customer relationships. According to NPS founders, Net Promoter Scores indicate how strong those relationships really are.
How Do You Get Your NPS?
Short surveys bring better results than long ones. And since it seems like we’re surveyed after every human-facing and digital transaction we make, short surveys are a welcome change. Net Promoter Score surveys are simpler than customer satisfaction surveys because they can work with only two questions.
1) How likely are you to recommend us to your friends, family or colleagues?
This is a scale from 0 to 10 and requires just a single click.
Promoters feel your offerings enrich their lives, and they’re willing to tell others. These are your repeat buyers who will evangelize on your behalf.
Passives probably got what they paid for, but not much more. They aren’t terribly enthusiastic about your offering, but they aren’t likely to bad-mouth your company, either.
Detractors got less than what they paid for and may feel their lives diminished as a result. They aren’t likely to repurchase, and they may damage your reputation by giving bad reviews.
2) Would you say why?
This is an open text field that’s optional. If you’re lucky, your respondents will enter a few words that explain why they would or would not recommend your company’s products and services to others.
Both questions are valuable when you’re trying to suss out your Net Promoter Score.
3) Deep Dive
If you want to delve a little deeper based on how respondents answer, add a third question specific to these two groups:
- Ask Detractors and Passives what areas you should improve, with a few specific options based on your offerings, the time of year the purchase was made, and so on. Let respondents choose more than one option.
- Ask Promoters what in particular they would recommend, with a few specific options based on your offerings, the time of year the purchase was made, and so on. Again, let respondents choose more than one option.
Survey Providers
You can start simply with a tool like SurveyMonkey, and build actionable insights from there. Companies like Retently, Survey Sparrow, Delighted, Wootric, Promoter.io, Ask Nicely and SatisMeter are happy to help you set up a survey—and many will help you manage your audiences, analyze responses for useful insights, and integrate the survey with your website or other tools.
Talk to colleagues, ask Google or query sites like Quora for recommendations that are right for you.
How To Calculate Your Net Promoter Score
You don’t need complex algorithms to determine your NPS. After administering a 2- to 3-question survey to recent purchasers, take the percentage of Promoters, subtract the number of Detractors, and express it as a number, not a percentage. NPS ignores Passives for the calculation, but not for the deep dive (in #3 above) and follow-up (in a later section).
Example: 50% of respondents were Promoters minus 10% of respondents were Detractors: 40 is your Net Promoter Score.
What’s a Good Net Promoter Score?
Unlike golf, it’s better to have a high Net Promoter Score than a low one. Here are some recently reported Net Promoter Scores, according to surveyors at Retently:
- Tesla’s NPS is 96.
- Starbucks’ NPS is 77.
- Airbnb’s NPS is 74.
- Netflix’s NPS is 68.
- Apple’s NPS is 63.
These companies have high retention rates and offer reliable and consistently high-quality products and service. But here’s a curveball: It’s really not about the number.
It’s true that NPS is a popular benchmark that helps companies quickly assess consumer satisfaction in a way that’s easy to repeat. But according to its founder, Fred Reichheld, the Net Promoter concept is not about boosting your score or tying bonuses or raises to increased scores. It’s simply about increasing the number of customers’ lives you enrich over time––the goal of any great organization.
Even though we know it’s not all about the number, tracking your NPS is a worthwhile thing to do because it’s an indicator of customer loyalty, or the lack thereof.
- 0 or below means you have more things to worry about and fix than your NPS.
- 1–30 is good, but it means there’s room for improvement in your offerings.
- 30–70 indicates you’re on the right track as far as your customers are concerned.
- 70+ says you’re well-loved by your customers, and you have an army of brand ambassadors.
A Word About Naysayers
Just like anything in life, the NPS system isn’t perfect. According to Forbes, NPS doesn’t always uncover root causes for respondent scores. It doesn’t involve customer demographics. And it has a bad rap thanks to customer service reps coaching customers into giving high marks after a purchase.
You know, you get your oil changed, and on your way out the tech asks you, “If there’s anything that would prevent you from giving us less than a 10 on our next survey, can you tell me now so we can fix it?” Asking for this kind of pre-rating input is bad form, no matter how it’s couched or who’s doing the asking.
Naysayers also tell us NPS predicts an intention, not a behavior. Respondents can say they would refer, but will they actually refer the business? That’s unknowable. So, NPS is one tool in your toolbox, not the uber-functional Swiss Army knife.
Follow-Up: You Have Your Score. Now What?
Metrics are nice to have, but only if you can derive a deeper meaning from them. The whole point of Net Promoter Scores is to do something with the information.
- Are customers happy? Thank and reward your Promoters.
- Are customers unhappy? Focus on continuous improvement for your Detractors.
- Are customers lukewarm? Woo Passives with better service or a product enhancement.
Use the NPS exercise to develop an actionable plan with tactics to help you and your team make positive changes that buyers, prospects and former customers notice.
Let us know if you found this information helpful, have additional insights or know a better way to get this kind of customer input. Happy net-promoting!