One of the most popular ways of measuring customer loyalty is the NPS (Net Promoter Score). There are many different ways and methods which you and your company or organization can use to understand what your customers think about you as a company and about the products and/or services that you are offering. The Net Promoter Score is a score that tells you how much your customers like you and gives you insights into whether or not they are going to stay as customers.
What is NPS survey – the meaning of Net Promoter Score
So, what is Net Promoter Score, what does NPS stand for and what is a good NPS score?
NPS is short for Net Promoter Score. It is a concept and a way to measure customer loyalty that has grown and becomes very popular since it was invented. It was the American author Fred Reichheld that created the concept, which he presented in his book The Ultimate Question. Fred had been researching how one can measure customer satisfaction and customer retention and see how this relates to how successful and profitable a company is and can be. It is thus a metric and an indicator of the growth of a company.
The concept, or management tool as some people describe it, was introduced in 2003. Today Net Promoter Score is a common alternative that is used all over the world by companies who want to measure and understand how good or bad their customer relationships are and how their customers’ loyalty correlates with the growth of the company.
The core of NPS can be described as the question:
“How likely is it that you would recommend this company (and/or product, and/or service) to a friend and/or a colleague?”
The person who answers the questions then gets to score on a scale that most often goes from 0-10.
People who score really high (around 9-10) are called Promoters, those who score 7-8 are called Passives and the rest (0-6) are called Detractors.
The Promoters are your fans! They are loyal customers who probably love you and will remain customers for a long time and will probably continue buying and buying more. The Passives are happy, but are nothing more than just customers; they are not very committed. The Detractors, as the name suggests, are not very happy but are still there and can be a good source of information on how to improve.
NPS Definition of Detractors, Passives and Promoters
Why, how and when to use Net Promoter Score
So, how does the Net Promoter Score work? When should you use it and what for? Let’s dig a little deeper into the benefits of NPS and how you can use it to increase your customer loyalty and the growth of your company.
Understanding the customer
Firstly, NPS is a great concept and management tool to use when you want to figure out how your customers’ opinions about you affect the growth of the company. There will always be things that your customers have opinions about but not all of them are as important as others when it comes to affecting your company’s growth and revenue. A customer can be unhappy with a number of things but consider them to be so small or unimportant that they would still rank you as a company that they would recommend to their friends and colleagues.
Find potential for improvement with the NPS
On the other hand, other customers might be happy with everything except one detail, but that detail might be so important for them that they would decide not to recommend you to anyone at all. To understand whether or not people will recommend you is, therefore, a great way to understand what improvements your company needs to focus on and also a great tool to use for predicting the growth of your company.
Honest & easy to understand the feedback
It is rather easy to understand how to use NPS and to get going. Other customer surveys can be both complex and take a long time to prepare. They tend to be complicated, long and time-consuming, and this often also leads to low response rates. NPS, on the other hand, is very easy for both you and your customer. It is simply one question – the question of how likely they are to recommend you. Customers will give you a score on their likelihood, most often on a scale of 0 – 10. This score is a simple and honest answer! An answer that will tell you a lot about your company and will hopefully get you to act on the things you need to do to improve the score even more!
The Net Promoter Score is great to use when you want to know what your customers think about you and to predict the future of your company and its growth. It is also a great tool to use when you want to get insights into how you are doing in comparison to your competitors.
The NPS survey is easy to distribute through the Netigate Platform via email, SMS or as an embedded link on your homepage or in social media posts.
The NPS question
Yes, “the” question – because there is only one!
The whole concept of the net promoter score is based on the NPS question. It is a two-part question that is always going to end the same way, with the words “…how likely would you be to recommend us to a friend or colleague?” The question can start with some different versions of the same thing:
“Considering your experience with the company/service/product…”, “From what you have experienced…” or “Based on the products/services that you have bought and tried…” but it will always end the same way. One can also completely skip the first introduction part of the question and get right to the point – “How likely is it that you would recommend us?”
Tip: It is recommended to include a follow-up question after the NPS question to get deeper insights into why the customer answered as they did. Using the Netigate Word cloud will also help you to sort all open-text answers and locate commonly used phrases.
What is a good NPS Score?
So, as we have already described, the NPS is a scoring system and as with all score systems, you’ll get results that you can analyze and use to make better decisions.
Our Net Promoter Score tool gives you information about what percentage of your test group belongs to each of the 3 groups that we described earlier in the article:
- The Promoters (score 9-10)
- The Passives (score 7-8)
- The Detractors (score 0-6)
By subtracting the % of Detractors from the % of Promoters you will get a number from -100 to 100 and this is your Net Promoter Score. If you would have an extreme situation where all of your customers are Detractors then the score would be -100. If all of your customers instead would be Promoters the score would be 100. These extreme numbers are rarely (as in almost never) found but can be seen as examples of how to understand how the NPS Calculator works.
With this calculation and the score you get you can get a good measurement on how your customers, in general, perceive your brand. All numbers that are positive are considered to be good. So everything from 1 and up to 100 is by most people seen as a sign that you have happy customers. A score from 50-100 is often considered extremely good.
P.S. Note that different markets have different benchmarks, so do some research on what other companies in your field are ranking before drawing too many conclusions about your score.
5 tips on how to optimize your NPS survey
Set goals and aim higher!
Let your first score become your starting point, the number that you’ll get will just be a number of how you are performing now but you have everything it takes to change that number. Compete with yourself and aim higher every time!
Let the score impact your business!
A score is just a number. But it can be a powerful number if you let it change what you are doing. If you do the survey, get your number and then continue business as usual, then it won’t have any effect at all! It is not until you let the score be a starting point of change that you can see results. Use the score to set new goals and celebrate company growth as you see the score improving!
Use S.M.A.R.T goals to score higher
By using a method like S.M.A.R.T., you will strive towards a higher goal at a realistic and good pace. The method is simple and straightforward; be S.M.A.R.T by letting your goals be:
S : specific
M : measurable
A : assignable
R : realistic
T : time-related
Repeat your survey and re-evaluate your results
The whole point of surveys is to understand what your customers are thinking and wishing for so that you can improve and do better. So after you’ve done your survey, gotten the results and started doing things to improve the score, it is important to re-do your survey. Analyse and compare your results from time to time within the Netigate Platform.
Compare your score with your competitors
Not only is the NPS score a good way of measuring yourself; it is also a good way of understanding how you score in comparison to your competitors. In the Netigate platform you can benchmark your score against yourself and your competitors to get more insight into your market.
How can we help you measure NPS?
With our Net Promoter Score tool you can create your own survey from a comprehensive library of templates and choose the one that suits your needs. Netigate’s platform collects feedback and provides real-time results along with automated and insightful reports. We make it easy for you to interpret the results and take the appropriate action.
You’ll have the luxury of your personal customer success manager, which will help you along the way to maximize the value of our platform, and we offer you an unlimited number of questionnaires and answers. Through our API, it’s simple to integrate the answers from the survey into your own CRM system. Reporting and analysis made easy.
Netigate is a global solution and our surveys are available in more than 65 different languages, making us a perfect solution for global companies working at an international level. Gather data and feedback from your customers in a new, better way. Our NPS tool provides you with the insight you need to make the best decisions for your organization.
Useful tips to increase the response rate of the NPS survey
In order to make any sensible conclusions from your survey, you’ll need to make sure that the survey response rate is acceptable or higher. It can prove tricky to get a decent response rate on a survey, but there are some useful tips that can help you get the data you’ll need.
How long will the survey take to complete?
From the start, be absolutely clear about the amount of time the survey will take. If you are proactive and transparent from the beginning, the respondents are less likely to complain about the survey. For example, you can use a progress bar which indicates how far they’ve come and how much they have left.
Multiple language options
Always offer multiple language options. It increases the response rate and shows your customers that you’re flexible.
Create responsive surveys
Adapt your survey to different devices. Not everyone is responding from their computer and in this day and age, it’s important that your survey can be taken on smartphones and tablets as well.
Send reminders to your respondents
Don’t be afraid to send reminders about the survey. Maybe not too frequently, but there will be some respondents that actually may have missed it.
Read more smart tips about how to do efficient NPS surveys in our survey tips.