As you create strategies to reach new customers or recruit new talent, you need to understand how satisfied your current customers and employees are with your company, and how likely they are to recommend your brand to peers. This piece of data is called the Net Promoter Score (NPS).
The score might seem like difficult feedback to measure due to its subjectivity, but it’s easy when you include the right kinds of question type answers in your NPS survey.
In this article, we provide a complete guide to leveraging your NPS score to optimize your business, organization, or employee recruiting and retention strategies. This guide clearly defines what an NPS is, explains why it’s important for any organization, offers examples of NPS in multiple contexts, and shows you how to create the kind of survey that will help guide your next action plan.
What is an NPS score?
An NPS is a data that reports the satisfaction level of respondents and tells you how likely they are to promote your brand, product, or company (or any other variable) to their peers. In addition to measuring satisfaction, your NPS survey can include questions about brand loyalty, employee engagement, and even very specific product- and service-related feedback.
Your NPS score is a numerical value – usually on a scale from 0 to 10 – with 0 representing the most negative promotion and 10 representing positive promotion. You’ll notice that in this case, 0 does not mean that participants are not likely to take any action at all. On most NPS surveys, lower scores represent responses that indicate participants may actively detract from your brand’s promotion.
To find your NPS score, you need to understand the concepts of promoters and responders. Think about public forum business reviews. People who post very negative reviews like, “This business has the worst service ever!” are unhappy customers or detractors. A passive respondent is someone who might not even post a review because they don’t feel passionate about their experience one way or another. A promoter, meanwhile, is a reviewer who says something along the lines of, “I love this business. John was so helpful on the call, and when I went in for a face-to-face meeting, I could tell that he really cares about the team and keeps up with industry trends.”
A promoter doesn’t even have to state that they recommend the company or product of interest when they speak positively about it. Their enthusiasm about the brand and willingness to share indicates a good NPS score in this scenario.
To get your score, start with the percentage of promoters and subtract the percentage of detractors. Next, multiply that number by 100, and there you have it: your NPS.
NPS score formula
Calculating your NPS score is quite easy. There is no complex formulae or analytics involved. You can calculate your NPS score by subtracting the percentage of detractors from the percentage of promoters. The Net Promoter Score is a whole number ranging from -100 to 100, and is indicative of customer happiness with your brand or organization.
Explore: What is a good Net Promoter Score?
Types of NPS scores with examples
NPS can be of different types, let us look at them in detail to understand what is more relevant and important to your brand or organization.
1. Relational NPS
Relational NPS is calculated based on your customers’ answers to how they feel about your brand or organization overall. It is a high-level measure of your customer loyalty and customer satisfaction. It can be used to check the health of your brand study improvements or changes over time. Relational NPS comes extremely handy in gauging overall customer loyalty.
Example: Annual customer experience or satisfaction surveys are a great example. Relational NPS is independent of customer transactions and gauges customers’ overall sentiment towards the brand.
2. Transactional NPS
Transactional NPS is more focussed and targeted in its approach. It is aimed at gathering feedback after specific interactions with your product, service, or departments. Since it’s precise, it helps in optimizing various touchpoints in the customer journey.
Example: A customer survey conducted immediately after a conversation with a support representative. It will look at how well the call was handled, was the issue effectively resolved, and was the customer satisfied.
Why should you measure an NPS score?
When you know what survey participants like about your company or products and what they think needs improvement, you have insights into how you can meet your goals for business growth and development. Even a lower NPS can light the way to optimizing your company.
Consider these reasons why you need to know your NPS:
- NPS score identifies how likely respondents are to promote your brand organically and provides actionable insights for immediate improvements.
- NPS surveys give you the type of insights that help you improve customer experience and give your brand the edge over its competitors
- NPS score provides useful data for financial forecasting and budgeting for marketing, development, and staffing for your entire organization.
- NPS surveys offer specific feedback for long-term changes that will naturally make your company and its services or products more desirable and shareable.
- NPS surveys for employees help you check the pulse of your organization and discover how likely people are to stay or recommend the company as a good workplace to peers.
- NPS surveys to current customers give you the insights necessary to develop brand loyalty and customer retention strategies.
Good NPS score
A good NPS indicates you have a higher number of promoters or loyal customers than detractors. Your customers are happy with the brand as a whole, and customer experience, and customer satisfaction levels are high. We talk about this in great detail in this blog, ‘What is considered a good net promoter score?‘
What are the key benefits of NPS?
The NPS system is popular and highly preferred by researchers since it translates several customer metrics into one standard of CX success. Here are some of the key benefits an NPS score offers:
Provides a wholesome view
Surveys such as CSAT and CES pertain to specific or latest customer interactions with your brand. This could be when they buy your product, use your service, or interact with your support team. These surveys do not take into account the overall customer relationship with a brand or an organization. Your customers may be happy with your product or brand despite having a not-so-great interaction with one of your support reps. NPS indicates that a wholesome sentiment towards your brand, a mix of website, social presence, service, support, etc.
Measures chances of repeat business
NPS helps you measure the likelihood of new as well as repeat business for your brand. This is extremely crucial for business for managing cash-flow, forecasting growth, managing resources, etc. It helps you measure overall customer satisfaction and assess your organization’s health.
Easy to understand
NPS uses a scoring system from -100 to +100, which is very easy for everyone to follow. This makes your colleagues and related departments to be on the same page. It also makes for a good (Key Performance Indicator) KPI since it’s a measure of your entire brand. A good NPS score indicates everything being right with product, packaging, marketing, delivery, service, and customer support. A low NPS score indicates some gap areas that you may need to look into and fix at the earliest.
Satisfied and engaged employees make constant efforts to deliver excellent customer experience and service, indicating good employee experience (EX) and employee satisfaction.in
Data for future plans
NPS+, a key feature of the QuestionPro CX platform, lets you ask your customers their NPS score reasons. Without this information, your score is just one piece of the puzzle. Once you have an additional customer feedback on the score, you can start devising action plans to improve customer experience and thereby your NPS score. It becomes easier to drive change when you have additional feedback. Learn more about the uses and benefits of this on our NPS+ feature page.
Easy to conduct
NPS surveys are quick to conduct and are not cumbersome for the point of view of customers. You may run NPS surveys via email, phone, mobile apps, or online. Also, NPS is measured with the formula – % of promoters – % of detractors, removing the need for any complex analytics or formulae. Based on the score, your customers are bucketed into detractors, passives, and promoters.
Track changes effectively
It is ideal for conducting NPS surveys at least two times in a year. This is helpful in not only getting timely customer feedback but also identifying and studying trends. Using your survey data, you can track your business performance effectively. This arms your with data to plan and improve on your current processes and operations.
Benchmark your competitors
As NPS is globally recognized and accepted, you can easily benchmark your competition and track that progress over time. You can also find benchmarks that suit your specific region.
Tool to measure your NPS score
Using QuestionPro CX, our powerful Customer Experience Management Software, you can measure your NPS score. It provides real-time insights that let you deliver exceptional experiences to your customer. Our NPS survey dashboard is a highly advanced analytics platform for measuring your NPS. It shows detailed, real-time NPS value graphs and charts varying over time. Our CX tool is developed and equipped to collate and analyze unlimited responses. Use QuestionPro CX to design, compose, conduct, and analyze NPS surveys quickly and efficiently. You can do this with anyone of the 40 pre-existing NPS survey questions. You can customize these surveys as per your need and requirement. You can conduct surveys by adding respondent email addresses manually or importing them via our templates. The dashboard starts showing data as and when your customers take the survey.