It’s a simple question that can tell you a lot about your customers and your business: How likely are you to recommend us to a friend or colleague?
Pioneered by Fred Reichheld, author of The Ultimate Question, the NPS question is a powerful customer service metric that diverts from the typical customer satisfaction survey. Instead of measuring satisfaction with specific customer experiences, NPS focuses on overall health and loyalty.
And though it shouldn’t replace standard customer satisfaction measurement, NPS is a powerful growth indicator that every organization can learn from.
A Key Customer Service Metric (Plus a Whole Lot More)
Calling Net Promoter Score a “customer service metric” really underplays its company-wide value. The insights NPS surveys deliver can guide customer success initiatives, steer sales and marketing campaigns, and provide a concise snapshot of customer health for upper management, among others.
For example, Campaign Monitor uses NPS results to inspire a monthly dialogue between its Customer Success and Product teams. They review the responses together and plan their product roadmap with customer feedback in mind.
But for the sake of simplicity, today we’ll call it just that: a valuable customer service metric that can guide organizations toward a better customer experience.
Breaking down your customer base
NPS results place your customers into three groups: Promoters, Passives, and Detractors. Promoters responded with a 9 or 10, meaning they’re extremely likely to recommend the brand to others. Passives aren’t thrilled with their experience, as their scores of 7 or 8 reflect. Detractors fall anywhere from 0 to 6. They’re the at-risk accounts most liable to churn (and take their negative brand perception with them).
The challenge, then, is increasing the number of promoters and decreasing the number of detractors. Not a simple task, and one we won’t get into today. (Read our posts on creating satisfied customers and reducing churn for some strategic inspiration.)
Instead, let’s look at NPS itself, and how customer service teams can measure it effectively.
An overview of Net Promoter Score (NPS)
First, give it a try. This live example shows you the basic flow of a simple Net Promoter Score survey.
Notice how it’s not limited to the “NPS question” only. The second, open-ended question allows for free-form responses, where customers can deliver the real juice. Though people refer to “NPS” as a survey type, a survey question, a metric, and sometimes even a tool or index, it will always consistent of the first rating scale question.
Calculating Net Promoter Score
After sending an NPS survey and collecting responses, the actual Net Promoter Score is calculated by subtracting the percentage of Detractors from the percentage of Promoters:
% Promoters – % Detractors = Net Promoter Score
So, the final value can range anywhere from -100 to 100. If you’re using a survey solution like GetFeedback, your survey summary report will automatically calculate your Net Promoter Score and produce a visual histogram like the one below. No need to whip out the calculator.
Let’s look at a real example. Say you received 100 responses to your Net Promoter Score survey and:
- 5 responses were in the 0 – 6 range (Detractors)
- 40 responses were in the 7 – 8 range (Passives)
- 55 responses were in the 9 – 10 range (Promoters)
You’d subtract 5% (Detractors) from 55% (Promoters), which gives you 50%. Since a Net Promoter Score is always shown as just a number, not a percentage, your total Net Promoter Score would be 50.
Simplicity and ease of use are two of NPS’s greatest advantages. With one simple customer service metric, the entire company can get a sense of customer loyalty and health.
How does loyalty compare between subgroups of customers? How did it change from this time last month or last year? How does it compare to others in the industry? NPS is a great place to start.
The NPS methodology is not without its disadvantages:
- It doesn’t provide a complete view of customer satisfaction, nor does it identify specific areas where your business needs to improve. These are questions that a more advanced customer experience program can begin to answer, particularly when customer feedback lives in Salesforce.
- The context of the question will also potentially bias the results. For example, imagine surveying only those who had problems with your products. Your NPS score would be lower than if you’d surveyed your entire customer base.
Again, this is why we advocate for broader customer experience programs that can capture customer feedback at the right time, in the right context.