Everything you need to know about Net Promoter Score (NPS)

Star ratings are great, but they don’t tell you the full story. Someone may be happy enough to leave your business a four-star review, but would they go that one step further and recommend your service or your products to others?

Recommendations are powerful – 80% of consumers find advice from friends and family helpful, the exact same percentage who say online reviews from other customers are helpful. Recommendations can influence purchase decisions and help you attract new customers for free, but how do you know how likely your customers are to recommend your business? That’s where Net Promoter Score, or NPS, comes in.

NPS is an important metric for businesses across all industries. In this article, we’ll explore what NPS is, how to calculate your score, what a good score looks like and why you should be measuring it.

What is Net Promoter Score?

NPS is a customer satisfaction benchmark used to measure how loyal your customers are and how likely they are to recommend you to others. It’s designed to give you an idea of how people feel about your business overall, rather than a specific interaction.

How to calculate your Net Promoter Score

Calculating your NPS is easy, and it all starts with one simple question:

On a scale of 1-10, how likely are you to recommend [business name] to a friend, relative or colleague?

Step 1 – Collect responses through customer feedback

First, start asking this question to all of your customers. You can do this by running a survey or even including the NPS question when collecting reviews (Feefo allows you to do both!).

Step 2 – Collate your responses

Net Promoter Score scale

Depending on the score each of your customers give, they will fall into one of three groups:

Promoters (score of 9 or 10)

These are your most loyal customers. Not only are they likely to keep buying from you, they’re also the ones you’d probably expect to shout about how great your business is and refer you to others!

Passives (score of 7 or 8)

These customers are satisfied but they may not be happy enough to recommend you just yet. They’re also likely to be swayed by the competition, rather than remain loyal to you.

Detractors (score between 0 and 6)

These are unhappy customers who could damage your brand through negative feedback and word of mouth.

Step 3 – Calculating your NPS

NPS works on a scale of -100 to 100, with -100 being the worst and 100 being the best possible score. To work out your score, you need to deduct the percentage of detractors from the percentage of promoters. Passives count towards the total number of respondents, which means they detract from both the promoters and detractors equally. If all of your respondents were passives, your NPS score would be 0.

If all of this sounds like a bit too much effort, don’t worry. There are NPS tools out there that will calculate and track your score automatically, such as ours. You can find out more about Feefo’s Net Promoter Score tool here.

Top tip: Run dedicated NPS surveys and ask follow-up questions to dig deeper into the reasons behind their ratings, such as ‘It’s great to hear you’d recommend us! Can you give a few reasons why you love [business name]?’ or ‘Sorry you’re unhappy with our service. Is there anything we can do to improve?’.

What is a good Net Promoter Score?

Once you know what your Net Promoter Score is, how do you know if that score is ‘good’ or not? Technically, anything over 0 can be counted as good, because it means you have more promoters than detractors, but one of the best ways to analyse your score is to measure yourself against your competitors.

Average NPS scores differ wildly from industry to industry – a ‘good’ NPS in automotive may look very different to a ‘good’ retail score. There are lots of tools out there that will tell you what the average is for your industry and how your score measures up, allowing you to benchmark your business against your competition.

Benchmarking against your own process is important too. If you used to be a -10, then an NPS of 30 is great! Track your progress over time and see how the changes you make to your business affects your score. Remember, the higher your NPS is the more referrals you’re likely to get, which means faster growth for your business!

Why is Net Promoter Score important?

There are so many reasons why Net Promoter Score is a popular metric for some of the biggest and most influential businesses across the globe. Here are three reasons why you should start measuring your NPS.

1. Predict and prevent customer churn

NPS tracks your customer loyalty over time, so it’s a great way to predict, and prevent, any possible increase in customer churn. With Feefo, you can set up alerts which let you know when you’ve received low Net Promoter Scores, so you can read the feedback and identify any serious issues.

Unhappy customers aren’t the only customers you should be keeping an eye on. Passives, customers who are satisfied but indifferent to your brand, should not be ignored, but it can be harder to know what would win their loyalty. Not only does NPS allow you to identify these at-risk customers, you can also use NPS surveys to find out what would boost customer loyalty. Perhaps your delivery costs are slightly too high, or your customer service team doesn’t respond to queries quickly enough. You won’t know unless you ask!

2. Collaborate with your most loyal customers

Including your happiest customers in your marketing campaigns is a great way to build trust in your brand and attract new customers. NPS makes it easy to identify these promoters. When someone leaves you a high NPS, why not create a follow-up question which asks them to leave their email address if they’d be happy to take part in a case study or collaboration with your brand? This will allow you to create a list of loyal customers that your marketing team can use to their advantage!

3. An easy, recognisable benchmark

There’s a reason why NPS is such a widely used metric: it’s simple. It’s just one question, so it’s easy to drop into a survey or customer review form, you can track your score over time, and benchmark yourself against the competition. It’s a simple way to communicate your customer loyalty to key stakeholders across your business, keeping them informed and aligned.

Start measuring your Net Promoter Score

At Feefo it’s easy to make NPS an important part of your customer feedback journey. With Feefo you can:

  • - Collect NPS through surveys and reviews
  • - Track your score over time
  • - Track scores by salesperson, product, service and more
  • - Set up alerts based on scores

To find out more about what our NPS tool can do for you, get in touch with our friendly team today.

Net Promoter® and NPS® are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.

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