What is NPS?
Net Promoter Score is an index ranging from -100 to 100 measuring the willingness of customers to recommend a company’s products or services to others. Thus, it is expected to generate a clear gauge of a company's performance through its customers' eyes.
We can calculate NPS by asking customers one question: “On a scale from 0 to 10, how likely are you to recommend this product/company to a friend or colleague?”
Based on their rating, customers are then classified in three categories as promoters, passives and detractors.
Promoters gave a score of 9 or 10. They are loyal enthusiasts who will keep buying and recommending the company products and services to other potential buyers, fueling growth.
Passives gave a score of 7 or 8. They are satisfied but unenthusiastic customers who could easily switch to a competitor’s offering if given the opportunity. Perhaps they wouldn’t spread any negative word-of-mouth, but also they will not promote the given service either.
Detractors gave a score lower or equal to 6. They are not thrilled by the product or the service they've received and possibly can damage your brand while impeding growth through negative word-of-mouth.
The NPS Calculation
NPS is calculated by subtracting the percentage of customers who are detractors from the percentage who are promoters, which can range from a low of -100 to a high of 100.
At this point, it is clear to us how the balance of detractors or and promoters would indicate a company’s potential for success, and the Net Promoter Score can be used as motivation for our teams to improve and to provide the best customer experience possible.
The NPS Survey
NPS is a valued metric on a strategic level, but by itself, the score is not sufficient to be beneficial or offer you a complete picture.
Herein, an wholesome NPS survey enables us to ask follow-up questions as a part of the standard approach. And, by asking customers why they've given that particular score, your team can understand what you're doing well and in what way you could be improving.