The Net Promoter Score – What It Is, How to Calculate It, and Everything in Between
The Net Promoter Score is a wide topic – one that is quite heavily debated and discussed in the cyber business area (preponderantly in eCommerce, but not only, of course).
What is NPS and what’s up with the buzz it’s been generating?
Let’s tackle this once and for all.
What Is Net Promoter Score?
The Net Promoter Score is a customer satisfaction measurement that shows the percentage of customers who would recommend a product, service, or company. It’s divided into three parts (promoters, passives, detractors) on a 10-point scale.
That is the short, street-style version.
The long version?
Think of your favorite band. Not just any kind of band. The band or musician you always want to bang your head to and the band that always pulls you out of the blue days. It could be Metallica, Dr. Dre, or Mozart.
Think about it and how it makes you feel.
Yes, that one. That amazing feeling your favorite musician gives you.
How would you react if someone said it was “meh”?
You can probably accept that it might not be everyone’s cup of tea, and that’s fine. But if someone tells you your favorite band is just “meh”, it will most likely not generate any kind of feeling for you.
A “meh” is just a “meh”. Maybe the person in front of you doesn’t like the genre altogether, or maybe they have a specific grudge against the band/ musician. Whatever it is, if they don’t say they absolutely loathe it and they want to crawl under a rock forever, you will most likely have no reaction.
The same goes for the NPS score too. You get a scale, from 1 to 10. From 1 to 6, you have the people who hate the “band” (read: the product/ service/ company). These are your detractors.
The 7 and 8 are the “meh” people – those who don’t love it, don’t hate it either. These are your passives.
And 9 and 10, well, these are the people who are really excited about the product. These are your promoters.
As a side note, get yourself this kind of customer – the kind who as excited about your product as Winnie the Pooh is to get his dinner.
How to do that? By getting your current customers’ feedback and constantly improving your product, of course.
How to do that?
Well, that circles us back to NPS.
Is the Net Promoter Score Useful?
It is. But don’t take it as the Holy Grail that will give you all the potential insight into what your customers are really thinking.
Rather than that, take a heuristic approach to feedback – get it as many ways as you can, internalize it, and actually use it (this last part is actually important, as you may have guessed already).
Like everything under the Sun, the Net Promoter Score has its ups… and downs. You could say it has its “meh” parts as well, of course.
The Advantages of Using the NPS
- It’s easy to digest at all company levels, including busy executives
- It can give a pretty good direction for improvements
- It can help you measure the likelihood of retention/ repeat business
- It tracks change over longer periods of time
- It’s really easy to implement (as you will see later on)
The Disadvantages of Using the NPS
- Like most survey-type feedbacks, it doesn’t actually tell you what went wrong/ right
- It isn’t the ultimate metric – you do need other metrics too (and this is valid not just in the case of NPS, but every other type of feedback)
- You don’t want to offer bonuses based on the NPS score, as this will alter the results
- You cannot and should not assign NPS analysis and the implementation of results to one department only
If you have to put it all in a nutshell, the Net Promoter Score can be a good indicator of how satisfied your customers are with your product. However, since it basically splits all the responses into three categories (detractors, passives, and promoters), you will be missing all the nuances that linger in between.
For instance, someone loves your product/ service enough to give you a 9 – but why not a 10? Where are you missing the mark?
Likewise, someone else dislikes your product/ service hard enough to give you a 3 – but why not a 2 or a 1? Is there something they did like? Or was their experience just not bad “enough” for a 1?
You can tackle these nuances by running other types of more in-depth surveys. However, qualitative research remains one of the very best ways to find out exactly what is going on (be it good or not so good).
How is the NPS Calculated?
If you want to know how to calculate your Net Promoter Score, you can either use an NPS calculator or use the NPS formula.
The net promoter score calculation is quite simple:
(Number of promoters) – (Number of detractors)/(Number of total respondents) X 100
- Calculate what percentage of people fall into each of the three categories (promoters, detractors, or passives).
- Subtract the percentage of promoters from that of the detractors.
- Enjoy your newly-found NPS. Keep in mind that this is just a number – what truly matters is what you do with it and the kind of changes you want to implement in your business.
For example, you could have the following data:
- Detractors: 200
- Passives: 300
- Promoters: 350
(350 – 200)/850 X 100
That’s 17 (almost 18). That’s your Net Promoter Score.
And this is the net promoter score formula – there’s nothing fancier than this to the NPS calculation formula. This relatively simple math calculation will give you the NPS score – but do keep in mind that your Net Promoter Score analysis matters just as much as the collection of the data and the math behind it.
Net Promoter Score – Best Practices
If you have just created your first NPS survey and left it our wild into the world but didn’t get much out of it, don’t despair. Unfortunately, how to calculate net promoter score is not enough.
Chances are that you have to make some adjustments to your NPS. Some of the best practices you might want to keep in mind before (re-)releasing your survey include the following:
1. Pick a channel for your NPS
There are multiple channels you can use to send out your NPS survey. The most common ones are email and SMS, but at the end of the day, you should choose that which is most likely to be easier for your customers to use. For instance, if you sell certain types of B2B products, you will most probably find that your customers are more likely to reply via email (they have it in front of their eyes all day long).
2. Pick the right timing to deliver your NPS campaign
We really hope we’re not disappointing here, but there is no actual right timing. You can check when people are more likely to open your email by checking the pattern they have created with your newsletters, for example. You can also check your industry average and see what times work best for it (for instance, people in agriculture are more likely to open their emails on Sunday, but this might not be true for an IT company).
Last, but definitely not least, you want to test things out. In the end, this is the kind of input you can only get when you actually test out, send a few survey invites, and see when people respond best.
3. Craft your invite with care
This probably goes without saying, but you should make sure to craft your invite with a bit of attention to detail. It can make the difference between people who respond to your survey and people who don’t.
- Keep it short and sweet (no more than a few lines, no more than 4-5 questions)
- Be straightforward (e.g. tell people from the very beginning what this is all about)
- Give a time estimation (e.g. “This will only take 4 minutes of your time”).
- Add personality to it (e.g. you can make a little joke right at the beginning of your email)
- Make it pleasing for the eye (good design goes a long way, really)
- Focus on the subject line (essential because it will make people click your email, rather than ignore it)
- Avoid being spammy (avoid spammy words, exclamation marks, capslock, and so on)
4. Send a reminder
You don’t want to be too pushy with this, as it can trigger bad reactions in your customers. Rather than that, send a quick, friendly reminder every couple of weeks for the entire duration of the survey.
5. Make the NPS mobile-friendly
Whatever tool you choose to use for your NPS form, be sure it’s a mobile-friendly one. This is where we suggest the Net Promoter Score form template (which you can grab and edit/ customize as you wish). It’s user-friendly and mobile-friendly and it takes just a few minutes to implement. Not bragging here, just sayin’, as always :).
6. Test your NPS survey
Test your form and make sure there aren’t any kind of technical issues with it. Test it on multiple platforms, multiple devices, and with multiple people, to be certain everyone who receives it will be able to use it too
7. Consider statistical significance
This is quite the iffy topic with NPS surveys because, at some level, even the smallest number of respondents can give you a good idea of where you are doing right and what you are not doing as right as you should be. This depends, of course, on the specific question(s) you ask, but overall, all feedback can give you insight.
The general advice is to not focus on statistical significance as you run your first NPS surveys. However, do start to consider it as you get more advanced and find out what makes your customers “tick” in terms of invites and questions.
Overall, the Net Promoter Score can be an amazing tool for your business. Like every other type of survey, though, it isn’t the ultimate tool. And it should be treated as such.
Use it because it can really provide you with great insight into how your business can become better for your business. But don’t rely solely on it. Your approach to acquiring feedback should be as inclusive and as generous as possible. Otherwise, your vision may be blurred by the downsides and inaccuracies specific to the feedback method you have chosen to be your guiding light.Load more...