What is Net Promoter Score (NPS)
NPS is the tried-and-true method for measuring the total customer experience and forecasting business growth. It also presents the survey owner with actionable data for a prompt response if the feedback is strongly negative.
NPS scores are derived from a single survey question:
"How likely is it that you would recommend [variable] to a friend or colleague?"
The question is followed by asking the respondent to score their answer on a scale from 0-10. Respondents are then grouped as follows:
- Promoters (score 9-10) are extremely loyal and can be expected to continue using your services or products and, just as importantly, refer others to you, generating additional revenue.
- Passives (score 7-8) are satisfied but unimpressed customers who may or may not return and are prime targets for your competitors
- Detractors (score 0-6) are dissatisfied customers who can damage your brand and inhibit growth via negative reviews and/or comments on social media
You calculate the Net Promoter Score by subtracting the percentage of "Detractors" from the percentage of "Promoters". The final result can range from a dismal -100 (this would require every survey respondent to be a "Detractor") to an exhilarating +100 (every survey respondent is a "Promoter"). For example, if 20% of the respondents were "Detractors", 10% were "Passives" and 70% were "Promoters", your NPS would be 70-20 = 50.
Due to its simplicity in capturing customer sentiment, the NPS can be used as a prime customer experience benchmark to involve everyone in your organization. Better yet, the survey owner can now repeat the same survey question on a quarterly, semi-annual or annual basis to learn if there has been any marked improvement, stagnation or continued dissatisfaction.
Net Promoter Score (NPS) is a registered trademark of Fred Reichheld, Bain & Company and Satmetrix.
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