Net promoter score is attempting to measure the loyalty a customer has to a brand/company. It’s about the overall experience, over time, rather than trying to look at a snapshot in time.
It complements other customer channels that should be monitored and not meant to be used as the one source of truth.
It is also considered a future indicator of customer behaviour. The logic is, improve the NPS score and then improve customer retention, revenue and profits. The most customer-centric businesses score in the range of +60.
Typically performed no more than on a quarterly basis, however there are variants to this based on not wanting to cause survey fatigue with customers.
How is it used
The standard question asks a customer: On a scale of 0-10, how likely would you recommend X (the company) to someone else.
After the company is satisfied they have asked enough customers, the results are divided into three groups based on the score received:
- 0-6 are detractors
- 7-8 are passives
- 9-10 are promoters
Detractors are considered to actively tell others about a bad experience with the company. Passives or neutral in theory say nothing. Promoters actively tell others about the good/great experience with the company.
To calculate the NPS score, using the total scores received, calculate the percentage who are promoters. Next, calculate the percentage of detractors. Lastly, subtract the percentage of detractors from the percentage of promoters. Passives are not included in the calculation.
Consider the following example:
Scores received 200.
- 20% were 9 or 10 - Promoters
- 50% were 7 or 8 - Passives/Neutral
- 30% were between 0-6 - Detractors
Promoters = 20 and Detractors = 30
20 - 30 = -10
NPS score is -10.
In this example, the likelihood of customer growth in the future is going to be negative.
Who uses it
Many well known companies - Apple is a good example to use. I’ll use an example for the following link where the NPS score for Apple was 89% in 2016. The following article is written by Cvetilena Gocheva
https://npsbenchmarks.com/blog/4-key-ingredients-fuelling-apples-high-net-promoter-score
Where is it used
In addition to looking at the feeling towards the company as a whole, it can be used to measure a specific key experience moment with the company.
The link posted above refers to an Apple watch survey. “How likely are you recommend the Apple Watch try on experience at the Apple store to a friend or family member”. This a great way to determine how the try on experience is working an how it will potentially affect sales.
This article really scratches the surface. I hope it provides some basic insight into the Net Promoter Score for you