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Introduction to the Net Promoter Score 

What is Net Promoter Score (NPS)? 

The Net Promoter Score (NPS) is the proven metric that helps you to determine the loyalty of the customers. It ranges from -100 to 100 and measures the willingness of customers to recommend a company, it's products or services to others. The Net Promoter Score enables you to benchmark the satisfaction level of your customers and predict their purchase and referral behavior.

NPS measures customer perception and customer loyalty towards a business based on one simple question:

How likely is it that you would recommend [Organization/Product/Service] to a friend or colleague?

Net-Promoter-Score

Brief History of Net Promoter Score

The Net Promoter Score metric was introduced in the year 2003 by Fred Reichheld of Bain & Company through his best-selling book named "The Ultimate Question: Driving Good Profits and True Growth".

The Ultimate Question-Driving Good Profits and True Growth Book

Over the years, we have seen an unprecedented level of the growth in the Net Promoter Score metric users. More than two-thirds of the Fortune 1000 list currently use Net Promoter Score to determine the customer loyalty. Thousands of leading brands such as Apple, Intuit, G.E., and American Express began using NPS to measure customer loyalty and engagement. With such growing popularity, Net Promoter Score has become the gold standard customer experience metric.

Importance of Measuring the Net Promoter Score

Net Promoter Score not only tells you about your loyal and disloyal customers, but also provides you with the actionable data, especially if used the right way with follow up questions. Acting on this NPS feedback data can provide you with opportunity to improve the level of your products and services. This in turn improves the user experience of your customers. Thus, with NPS you can now effectively monitor the impact of their customer experience strategies.

There are thousands of companies who have experienced the positive impact of making Net Promoter Score a part of their customer experience and marketing strategy. 

1. Ensures Sustainable Business Growth - Various companies and business units have indicated NPS as a leading indicator of business growth. This helps companies to streamline their marketing & customer management efforts and improve overall business growth. 

2. Improves Interaction with both Existing & Prospective Customers - Net Promoter Score is committed to delivering better customer experience by constantly augmenting the interaction between the brand and the existing & new customers.

3. Reduces Customer Churn Rate - Calculating the Net Promoter Score helps you to keep check on your detractors, passives, and promoters. Based on the score you can easily identify your detractors and quickly address them before they churned out. This helps you to reduce the customer churn rate and boost your business growth.

3. Helps in Upgrading or Developing New Products & Services - NPS provides actionable data that give you a detailed insight into your customer preference and purchase behavior. Based on it you can easily upgrade and do value addition in your product/service to enhance the customer experience.

4. Ensures Quick & Result-Driven Decision Making Ability - NPS Data helps you to track the bespoke requirements of your customers and enable you to take quick and precise business decisions without investing more resources and time. 

Net Promoter Score System

The Net Promoter System, according to Bain & Company, is a business philosophy that commits to customers and employees alike.

With regards to explaining the Net Promoter Score System, we have covered different topics including the Net Promoter Score Scale, Classification of Respondents, and 3 essential components of the Net Promoter Score System.

What is Net Promoter Score Scale?

The Net Promoter Score comes from the simple NPS question -"How likely would you be to recommend our products/services to a friend?" Customers range their willingness of recommendation on the scale of 0-10. Based on their responses, customers will be segregated into three categories.

NPS Respondents Classification

  • Promoters: 9-10 Score - They are those customers who range their willingness of recommendation to 9 or 10 and very satisfied.
  • Detractors: 0-6 Score - They are those customers who range their willingness of recommendation from 0 to 6 and considered to be very unsatisfied. 
  • Passives: 7-8 Score - They are those customers whose behavior falls between promoters and detractors. They range their willingness of recommendation to 7 or 8 and moderately satisfied. 

Components of the Net Promoter Score System

In the book, “The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer-Driven World”, Fred Reichheld and Rob Markey have explained 3 elemental components of the Net Promoter Score System to thrive in a customer-driven world:

  • Strong Leadership Commitment
  • Use NPS as your Reliable Metric
  • Deliver Platform for Improvement
Advantages of Using the Net Promoter System 

But why should your business rely on such a simple method? Here are a few of the reason we trust an NPS.

  • It is an industry-recognized metric that was incorporated by the leading management-consulting firm Bain & Company, so any business manager using it can be confident of its credibility.
  • It results in an easy-to-read number that can tell at a glance what percentage of the customer base is extremely satisfied with the service and performance. In essence, it gives the customer relationship manager an insight into their overall performance of customer retention and acquisition with just a single question.
  • Using an industry-recognized numeric can help companies identify their position in the competitive landscape and established players can use their high NPS to set a benchmark in the industry.
  • It is easy to implement and interpret, with results from day one. It is a simple out-of-the-box package that requires no experts to set up or analyze.
  • Research has shown that NPS correlates strongly with a company’s revenue, so implementing this system in a business can motivate employees to strive for better customer service, and hence a higher NPS.
  • By tracking the trend of NPS over time, a company can use this as a proxy for measuring its growth and maturity. A start-up is not well known and will probably have a low NPS while an established player will have a high NPS.

How to Calculate the Net Promoter Score?

There's only one standard (and right) formula to calculate the Net Promoter Score, as laid out by Bain & Co. Based on how you conduct the NPS Survey, you can use various methods to derive to the Net Promoter Score. Let's explore them below. 

3 Methods to Calculate the Net Promoter Score  

  1. Calculate Net Promoter Score using Excel
  2. Calculate NPS using Online Calculator
  3. Calculate Net Promoter Score using NPS Survey Tool 

 

  1. Calculate Net Promoter Score Using Excel: Say, you've sent NPS Survey with the NPS questions and you've received 200 responses from your customers. To calculate Net Promoter Score in Excel follow the below steps:

    Step 1
    - Enter all of the survey responses into an Excel spreadsheet.

    Step 2 - Based on their scale of willingness, segregate the responses into three categories. Promoters (9-10), Detractors (0-6), and Passives (7-8).

    Step 3 - Now add up the total responses from each group and get the percentage by dividing total number of group from total number of survey responses.

    Step 4 - Now, get your NPS score by subtracting the percentage total of Detractors from the percentage total of Promoters. 

    For Instance: say if you received 200 responses to your NPS survey:

    • 20 responses were in the 0–6 range (Detractors)
    • 140 responses were in the 9–10 range (Promoters)
    • 40 responses were in the 7–8 range (Passives)
    • When you calculate the percentages for each group, you get 10%, 70%, and 20% respectively.

      Net Promoter Score = % of Promoters - % of Detractors

      NPS = 70% - 10% = 60

      So, your Net Promoter Score is 60
  2. Calculate NPS using Online Calculator: You can use Net Promoter Score calculator to measure the Net Promoter Score.
  3. Calculate Net Promoter Score using NPS Survey Tool: An ideal way to measure Net Promoter Score is to use a NPS Survey App. With the help of a Net Promoter Score Survey Tool, you can take NPS surveys across various platforms like on premises using tablets, iPads and kiosks, or send email and SMS surveys with NPS question or embed NPS Surveys on your website. These NPS Survey Tools also enable you to view scores and feedback responses in real-time to identify your detractors and take action.

How to Interpret the Net Promoter Score?

As you know that Net Promoter Score ranges from -100 to 100. The score is positive when the company has more promoters than the detractors. The score will be negative when the numbers of the detractors exceeds the number of the promoters. 

According to the Net Promoter System, the average Net Promoter Scores vary greatly between industries. For example, a 2018, US-based study by the Temkin group saw average NPS values ranging between 0 (internet and TV service providers) and 39 (auto dealers). 

What is a 'Good' & 'Bad' Net Promoter Score?

Net Promoter Scores range from -100 to +100 that can be categorized into ‘good,’ ‘bad,’ or ‘neutral'. Usually, people consider any score above 0 as a positive score and score below the 0 as a negative score. In the NPS industry, scientific sampling methods are considered to be the standard method to conduct the NPS survey. A score of 60 or 60+ score is generally considered as a very good NPS in any industry. When your detractors are more than your promoters the score will be negative.

The Net Promoter Score Benchmark

Many industry leaders conduct surveys regularly to evaluate the NPS for their business. This enables them to establish a Benchmark to figure out their performance in the market and improve the loyalty of their customers towards brand.

On another hand, benchmarks also provide you with a clear insight into how the other organizations or leaders delivering the best customer experiences in each industry. These NPS standards help you to prioritize your customer experience strategies and tailor your business to your customer needs.

Net Promoter Score Benchmark by Industry

There are a lot of industries currently using the Net Promoter Score. What can be considered as an “ideal” NPS score depends on the industry type, and the products or services provided by your company.

The average Net Promoter Score for different industries can be diverse. Thus, qualifying NPS scores for individual organizations as good or bad would depend on the different industries themselves based on the ongoing industry trend.


Types of Net Promoter Score Survey

Net Promoter Score (NPS) Survey comprises a Net Promoter Score question (How likely are you to recommend us?) is sent to customers to get a concise understanding of their loyalty with the brand or organization. Response to this question help you to identifying the potential promoters and detractors of your brand.

You can apply Net Promoter Score in a number of ways, including a relationship metric or Transactional feedback.

Types of Net Promoter Score Survey - Zonka

Transactional NPS Survey

Transactional NPS Survey is conducted to determine the customers' perception immediately after specific interaction or transaction or event like placing a new order, booking tickets, doing online payment and so on. With Transactional NPS Surveys, it is easy to determine which interaction caused an unpleasant experience for the customer. 

Relationship NPS Survey

A Relationship Survey is conducted to gauge the general experience of customers of being associated with your organization. Relationship survey can be conducted by posing the simple question that How likely are you to recommend us to a friend or family on a scale of 0 to 10? These surveys can be done regularly like bi-annually, or quarterly. 

Employee Net Promoter Score (eNPS)

Employee Net Promoter Score (eNPS) is derived from the concept that is built around the Net Promoter Score (NPS), which was originally developed by Fred Reichheld, Bain and Co. and Satmetrix in the 1990s.

eNPS is an employee feedback metric that enables you to measure employees' loyalty based on the simple eNPS question: “On a scale from 0-10 how likely are you to recommend our organization to your family or friends?” Based on this question employees rate their willingness to recommend their workplace to their family or friends.

How eNPS Survey Respondents Classified?

In eNPS, you are able to segment the respondents into promoters, passives, and detractors. Promoters (those that answered 9-10 score) are the most loyal employees who will enthusiastically recommend employment at a company. Detractors (those that answered 0-5) are disloyal employees and are not likely to recommend employment at the company. Passives (those that answered 7-8) are not necessarily negative but are also not entirely loyal.

How to Calculate Employee Net Promoter Score (eNPS)?

The classification of the respondents (promoters, detractors, and passives) is taken into consideration to calculate the eNPS score. The employee Net Promoter Score is calculated by subtracting the number of detractors from the number of promoters and divide it by the total number of respondents multiplied by 100. Employee Net Promoter Scores range from -100 to 100.

The standard formula to calculate the eNPS 

eNPS= No. of Promoters – No. of Detractors ÷ Total No. of Respondents x 100

 

When and How Frequently to send NPS surveys?

No matter how quick and easy to deploy NPS surveys look like, this does not mean that you can bombard your customers with them whenever you feel like. With surveys in general and especially NPS surveys, timing is everything!

So the question here rises - “When to send an NPS survey and how often?” Keeping in touch with your customers through regular surveys creates a positive impact on your customers as well as creates a feedback loop for growth. 

You get to keep a tab on the experiences your customers have with your company. But then it is also advisable that you also do not blast your customer's inbox with frequent bulk NPS surveys.

However, the timing and frequency of your NPS surveys depend primarily upon your industry and customer base as discussed previously.

NOTE: NPS surveys are used to gauge customer loyalty and satisfaction and you cannot expect a new customer to be as loyal to you as an old one. Make sure you conduct NPS surveys at a point of time in your customer’s life when he has spent a subsequent amount of time with your company & brand. NPS surveys should not be conducted on a transactional basis. For that CES surveys would be more apt.

How to collect the Net Promoter Score Survey?

To track the Net Promoter Score of your business, you need to conduct the Net Promoter Score survey to collect customer feedback. The channel you choose to collect NPS feedback determines the quality of the responses. There are different channels available in the market to distribute your net promoter score survey.

6 Best Channels to Distribute the Net Promoter Score Survey

1. Capture NPS on iPads, Android Tablets & Kiosks 

If you're looking at capturing Net Promoter Score from customers and employees on the premises itself then using a Net Promoter Score Survey App for iPads and Android tablets is ideal. You can hand this over (like in a restaurant post a meal) or set it up as a feedback kiosk (like at a bank or airport) to gauge the NPS. A good Net Promoter Score Survey App will also run in the offline mode, i.e. without WiFi so you're able to get NPS from your customers without relying on good internet connectivity.  

2. Embed NPS Surveys on Website or share through Survey Links

Using NPS Surveys on your website lets you capture NPS from your customers while they're still on your website. You can embed the NPS Survey on your website to get customer feedback online. Use this on any generic page or inside blog and help pages. These are also great to use on post interaction and transaction pages like after making a purchase, after completion of an activity and similar.

This way customers can share their feedback with you before they leave the website. You can also share the online survey links to your customers and employees to capture their Net Promoter Score.

3. Email NPS Survey

Another great way to share Net Promoter Score Survey is to email the NPS Surveys to customers. These NPS emails can be triggered on regular time intervals, for example, you could send out feedback surveys to your customers on a quarterly basis (relationship NPS) or these are be sent after a purchase or an interaction with your business (transactional NPS). Sending Email Surveys With Zonka Feedback, you can create and send NPS Email Surveys within minutes.

4. NPS Survey via SMS

NPS Surveys sent on SMSes are the easiest and fastest way to reach out to your customers. NPS survey links sent on text messages will surely grab your customer’s attention in a jiffy and its opening rates will always be high as compared to Email NPS surveys. Moreover, NPS surveys on SMS is an excellent way of gauging customer satisfaction post service. This medium of survey distribution is being actively used by Travel industry (Airlines, Railways), E-Commerce and Healthcare industry.

Pro Tip - SMSes are already too intrusive in nature so their frequency must be regulated so that they do not irritate your customers.

5. Social Media Survey

Social Media is another influential channel where you can communicate with your customers. In fact, 90% of social media users have already used social media as a way to communicate with a brand or business. So, sharing the NPS survey link on social media channels can provide you with actionable data and will help you to improve your products & services. Thus, placing the survey link on any social media channels can increase its visibility to an audience and entices them to give the response.

6. QR Code

QR codes can be used very effectively for getting feedback and NPS from customers. These can be printed on bill receipts, delivery boxes, flashed on the website or put up on the counter for customers to scan and open the survey link and share their feedback. These are great to use as a low-investment method of taking feedback. Of course, the response rate isn't comparable to other forms of capturing feedback but this is a very non-intrusive way to set up an NPS Feedback System.

How to use the Net Promoter Score Questions?

Asking the right questions always gives you the right data. Same is true is for Net Promoter Score Surveys as well. The timing and the phrasing of the Net Promoter Score Survey is very important in giving you the right results that help you identify the pulse of the customers and give you the accurate understanding of what your customers think about your company, brand, service team and more. 

The Net Promoter Score Survey is ideally a two-part questionnaire. The first part is the Net Promoter Score Question - How likely are you to recommend us to your friends and family? The second part is reasoning behind the score. This reasoning question is popularly an open-ended question, but can be a close-ended one as well based on your business needs. 

Different ways to use the Net Promoter Score Question

Ways to use NPS Question - Infographic

Closed-Ended Questions - A closed-ended question refers to a question which provides the customers some predefined choices of answers to choose from which may be in the form of options like Yes or No, ratings from 0 to 10, opinions from Strongly Agree to Strongly Disagree or a range of options depending upon the context of the question.

Types of Closed-Ended Questions:

  1. Ask customers to rate your brand or company
  2. Ask customers to rate your product
  3. Ask customers to rate your company on a recent experience
  4. Ask employees to rate your company and work culture

Follow Up Questions - While the NPS question does give you a lot of information like identification of promoters, passives, and detractors, using a follow-up question in addition to the NPS is a great way to know the reasoning behind the score. This reasoning gives you more actionable data to determine what is working and what is not working in your company.

Types of Follow Up Questions:

  1. Open-Ended NPS Follow Up Question
  2. Closed-Ended NPS Follow Up Question
  3. Logic-based NPS Follow Up Question

How to Improve the Net Promoter Score?

The best way to improve your Net Promoter Score is to transform your detractors to promoters before they churned. We’ve put together strategies that can help you to improve your Net Promoter Score and elevate the customer loyalty rate.

Strategies to Improve the Net Promoter Score 

  1. Find why your Detractors are unhappy
  2. Strategize smartly to Close the Feedback Loop
  3. Address concerns without being defensive
  4. Choose a knowledgeable Representative
  5. Don’t make any false promises to your customers

 

Zonka Feedback - Net Promoter Score Survey Software

One of the best ways to measure Net Promoter Score for your company, from customers as well as employees, is to use a Net Promoter Score Survey Tool. A good NPS Survey Software comes with features to customize your NPS Surveys, measure NPS across various channels like tablets and kiosks, via SMS Surveys, email Surveys, online Surveys and more, and get real-time Net Promoter Score Survey reports. 

Zonka Feedback is one of the top Net Promoter Score Survey Software that you could use to conduct NPS Surveys and measure loyalty. 

Net Promoter Score Survey Template with Comments

Some key features that make Zonka Feedback one of the best apps to capture Net Promoter Score:

  • Customized NPS Survey Templates - Zonka Feedback Tool enables you to fully customize your NPS Surveys by choosing from any 30+ survey questions. These questions help you to capture customer data for calculating the Net Promoter Score, Customer Satisfaction Score, and Customer Effort Score. 
  • Logic-based NPS Survey - To get better and more actionable NPS feedback and data, you can use the Logic-based NPS Survey at Zonka Feedback. Using this feature you can hide screen & branching and show only those questions to respondents that they need to answer based on their previous response.
  • Conduct NPS Surveys for all Channels using One Platform - Zonka Feedback has simplified the process of measuring and analyzing the Net Promoter Score. With the Net Promoter Score Survey Software, you can easily conduct Android Tablets & Smartphones NPS Survey, iPads & iPhones NPS Survey, Offline Surveys, Online NPS Surveys, SMS NPS Surveys, and Email NPS Surveys. Zonka Feedback enables you to conduct NPS Surveys through QR Code as well.
  • Net Promoter Score Survey Reports & Analysis - Zonka Feedback Net Promoter Score Survey Software offers you with the advanced and real-time feedback report and analysis feature. With this feature, you can monitor every feedback and get an in-depth analysis of all NPS responses. This helps you to take action on NPS feedback to swiftly resolve issues and convert your detractors into the promoters.