Businesses need to retain loyal customers to streamline their growth.
Customer loyalty should be guided by your company’s values and commitment to meeting customers’ expectations. You need to earn your customers’ trust so that they stay to support you even if the market declines over time. Not to mention that having 5% of your customer base as repeat customers enables your business to grow by up to 95%! So when promoters spread the word, your growth possibilities become endless. Calculating the Net Promoter Score (NPS) helps you understand the sentiment around your brand.
In this article, you will learn:
How to calculate an NPS score.
What are the NPS survey best practices –– including survey questions you should ask to get reliable insights.
So let’s begin!
What’s the Net Promoter Score?
Let’s remember how Wikipedia describes NPS.
Net Promoter or Net Promoter Score (NPS) is a widely used market research metric that typically takes the form of a single NPS survey question asking respondents to rate the likelihood that they would recommend a company, product, or service to a friend or colleague. The NPS is a proprietary instrument developed by Fred Reichheld, who owns the registered NPS trademark in conjunction with Bain & Company and Satmetrix. Its popularity and broad use have been attributed to its simplicity and transparent methodology (source: Wikipedia).
Calculating the NPS is simple. It starts with one scale-based question you usually ask your focus group in an email survey.
How likely are you to recommend our company to a friend or colleague?
Collect the NPS survey results.
Subtract the number of detractors (scores of 0–6) from the number of promoters (scores of 9 and 10).
Divide that amount by the total responses.
Multiply the final number by 100.
Number of promoters – number of detractors *100 = NPS Total responses
% of promoters – % of detractors = NPS
Now, let’s explain the promoters, passives, and detractors and their differences.
Promoters in NPS Calculation
A promoter is a respondent who gives your brand a score of 9 or 10 in an NPS survey, meaning they enjoy your product or service and would recommend it to friends.
Promoters – a score of 9-10 in Your NPS
Brand promoters are your superpower since they generate positive word of mouth. Once you get the NPS calculation, encourage promoters to write case studies and testimonials. Positive customer reviews increase sales by 18%, drive purchases, and make your brand immediately trustworthy. Use their power to aid decision-making and boost ROI.
Detractors in NPS Calculation
NPS surveys will help you determine the number of detractors. An NPS detractor is a survey respondent who gives your product a score of 6 or below on the NPS survey. Detractors are likely to discourage customers from using your products and won’t contribute to the good word about your brand; you can expect them to complain.
Passives are survey responders who give your business a 7 or 8 in your NPS. They aren’t happy or unhappy with your brand. Yet, it’s important to improve customer relations with them to prevent them from becoming detractors.
Passives = a score of 7-8 in Your NPS
Consider passives important to your NPS because they could sway either way.
3 Actionable NPS Calculation Methods
Now that you know how to calculate NPS let’s look at the different methods for measuring NPS.
Yet, if 100 answers don’t seem enough, larger plans offer complete customer experience help for any business.
NPS Survey: How Many Questions to Ask
To get a reliable NPS result, only one question is necessary:
How likely are you to recommend our company to a friend or colleague?
Knowing your business’s NPS score is the beginning of any NPS campaign. Once you calculate the NPS score, you need to understand the context around it, so support your NPS survey with follow-up questions.
The relationship survey – evaluates the overall customer experience with your brand.
The transactional survey – discovers the quality of a single interaction, such as the purchasing process.
Pro tip: Be careful about launching relationship NPS surveys after a specific event. Your customers confuse it with evaluating their recent experience (such as a transaction) instead of your entire brand. Surveying your customers at the wrong time could skew the results of your NPS scale.
How Many Respondents Should I Survey?
There are no minimum or a maximum number of respondents optimal for the NPS survey, unlike other surveys requiring a specific number of people to obtain an average. However, if you calculate NPS frequently, you will understand your customer loyalty/happiness. Think of it this way. Suppose you only have 10 respondents, and except for one detractor, they report as promoters.
In that case, you can still use NPS to
Continue doing something right to increase customer happiness.
Reveal where you may have gone wrong with your one unhappy customer.
You can choose from various channels to distribute your NPS survey to your customers. Much of the decision depends on your specific audience and the method they would most likely rate you.
Email is usually a good choice because it’s easy to embed the first question and direct your customers to your website to respond further. You can also distribute your NPS survey via in-app pop-ups or links sent via other communication channels (such as social media), your website, or Intercom.
You can even test it on other channels, such as your website, to create a mock NPS calculation. When you’re happy with the process, you can distribute the NPS survey to your customers. You’ve finished your NPS calculation.
Now that you’ve discovered how to calculate your NPS score and have reached a final score, you’re not quite finished yet.
Review the qualitative customer feedback you’ve collected as part of the follow-up process. Use open-ended questions and adjust them to where your customer falls on the NPS scale (detractors, neutrals, and promoters). Analyze your responses to gather important feedback you can now use to improve your NPS score.
Create and share an NPS report to inspire action. Don’t keep your NPS results to yourself. By sharing your NPS results with the team, you can work harder to increase the number of promoters. In addition, when your team becomes aware of feedback, they can work to improve these areas and any shortcomings as a personal goal.
Survicate lets you share access to the NPS analysis dashboard with all collaborators. Or you can download the NPS results into an Excel/XLS format. Be sure to present your results in a way that will make sense to all collaborators.
It’s far easier to add more customers to your pool of loyalty if there aren’t holes where unsatisfied users are escaping. Customer acquisition costs can hugely impact your bottom line. If it costs $75 to attract each new customer, you will need to have that customer spend $75 to break even.
Now, if you’re focusing on improving customer happiness and loyalty, your profits continue to grow past that initial break-even purchase. Calculating NPS and applying its insights will impact the growth of your business in amazingly positive ways. Asking one question starts the conversation, and this is where the magic can happen.
NET PROMOTER, NPS, AND THE NPS-RELATED EMOTICONS ARE REGISTERED U.S. TRADEMARKS, AND NET PROMOTER SCORE AND NET PROMOTER SYSTEM ARE SERVICE MARKS, OF BAIN & COMPANY, INC., SATMETRIX SYSTEMS, INC. AND FRED REICHHELD.