Net promoter score
Net promoter score, or NPS, measures customer satisfaction. It’s typically measured with a customer survey that asks the customer, “How likely are you to recommend this business to a friend or colleague?” on a scale of 0-10, with 10 being the highest and the best score and 0 being the lowest.
This metric helps businesses understand where they fell short in customer interactions and what steps they can take moving forward to improve customer loyalty and satisfaction.
How to calculate a net promoter score?
As mentioned earlier, all scores are ranked on a scale of 0-10. 0 means respondents are 'not at all likely' to recommend the company/product/service, and 10 meaning they’re 'extremely likely' to recommend the company/product/service.
After the responses are collected, the scores are grouped into three categories:
- NPS Detractor: Scores 0-6
- NPS Passive: Scores 7-8
- NPS Promoter: Scores 9-10
Then, the percentage of Detractors is subtracted from the percentage of Promoters to find the NPS. Scores can range between -100 and 100, with scores of zero and above considered good. (Passive scores are excluded from the calculation as they aren’t considered to either help or harm.)
What is the importance of a net promoter score?
NPS is a critical indicator of how customers feel about your business. If your net promoter score is low, it may suggest an issue where your customers aren't feeling satisfied or connected with your service. To earn more customer enthusiasm, you can use this score to determine whether improvements should be conducted.
Businesses can observe their score over time to notice any impactful changes. These benchmarks are great to observe how you compare to other companies in your industry.
What are the limitations of a net promoter score?
Although net promoter scores provide quantifiable metrics into how customers feel about your business, they lack context about why a customer is or isn't satisfied with your product or service.
It's amazing if your company received a high score, but you don't know why or what happened in that experience for that score. On the other hand, if you received a low score, you won't know what parts of your service need improvement.
While some NPS surveys provide follow-up questions that enable customers to explain why they chose a particular score, that feedback relies solely on the customer’s memory of their interaction with a brand. And that recollection may not be accurate or detailed enough to inform any actionable response.