What is the net promoter score?
Have you ever been asked to recommend a company, product or service on a scale of 0 to 10, with 10 being the highest? Most likely, you would have been asked, after you placed an online order, to review an app or software — or even when responding to a mobile survey. That’s evidence of someone trying to boost their Net Promoter Score (NPS).
The Net Promoter Score is used by a lot of businesses, mostly B2C (business-to-consumer), to measure their loyalty and reputation among customers. It can even be used in an employee survey to see how much employees like working for that company.
The question is usually something along the lines of, “How likely are you to recommend company/brand/product X to a friend/colleague/relative?” It’s a variation of the Likert scale, a type of survey often used by psychologists and psychometric researchers.
The net promoter score was originally created by Fred Riechheld, in collaboration with Bain & Company, and it was published in a 2003 Harvard Business Review article One Number You Need to Grow.
According to a CheckMarket.com article, it’s the 9s and 10s who are more likely to promote you, but anyone who ranked below a 7 probably doesn’t like you.
- Promoters — Respondents giving a 9 or 10
- Passives — Respondents giving a 7 or 8
- Detractors — Respondents giving a 0 to 6
There might be a follow-up question if you gave a 10. I’ve seen, “What would it take to raise our score by just one point?” if the answer is less than 10. And I’ve been challenged to actually recommend someone if I gave a 9 or 10. When it happened, I was taken to the company’s recommendation page, and asked to submit a friend’s email to tell them about the product.
I loved the boldness of it.
How do you calculate your Net Promoter Score?
This is where it gets tricky. While the score is measured on an 11-point scale, you don’t get a score between 0 and 10. You would think that the easy way to calculate it is the way we all learned averages: Add up the scores, divide by the number of scores, and then come up with a number like 5.3 or 8.7.
But the Net Promoter Score was created by a college professor, which means the answer is a lot more complicated than it has to be. (My dad was a college professor — I speak from experience. He also taught statistics, so he could come up with a reasonable explanation for why the NPS is so damn complicated.)
To calculate your actual Net Promoter Score, take the percentage of Promoters, subtract the percentage of Detractors, and then multiply that remaining number by 100. That’s your official net promoter score.
(% Promoters – % Detractors) x 100 = Your Net Promoter Score
So if 66 percent of your respondents are Promoters and 14 percent are Detractors, your score would be (66% – 14%) x 100 = 52. That’s a very good score, because more than half of your customers are Promoters.
But if 15 percent of your respondents are Promoters and 45 percent are Detractors, your score would be (15% – 45%) x 100 = –30. That’s a terrible score, and you should feel bad.
A high Net Promoter Score doesn’t mean you’ll get recommendations from everyone who ranked you highly, but it at least lets you know whether people are happy. Still, there’s a correlation between your score, your company’s reputation and ability to do your work well.
Generally, if you can get a score over 30, that’s good. Anything over 50 is great. And anything over 70 is a world-class organization.
If that happens, it’s not a problem with the survey or even bad marketing. You have deeper, more serious problems with your business, and it’s going to take a lot of work to fix it.
How can you use your Net Promoter Score?
More than just being a loyalty measurement tool, your Net Promoter Score can be used in a number of different ways. HubSpot says you can use it to:
Polish interactions with prospects and customers
Bill Macaitas, CMO of Slack, said the Net Promoter Score is “a leading indicator of future growth.” The more advocates they have, the lower their customer acquisition costs. So they use it to make changes in the way they deal with prospects, and then correlate it to the rise or drop in their Net Promoter Score.
Use it as a product development tool
Test prep company Magoosh uses their Net Promoter Score to determine whether their modules are delivering. When they noticed their Net Promoter Scores dropping for one test prep module, they realized they had a problem, were able to go fix it, and then monitor the changes in your updated scores.
Use it to reduce churn
Rather than surveying customers once or twice a year — missing ongoing problems — send out a Net Promoter Score question with every new customer, during major events or even as part of your email newsletter. Responding to issues quickly will increase retention.
Use it to communicate with customers
Don’t look at your Net Promoter Score and shrug or pass it off to marketing so they can “fix things.” This is something that should be shared with your entire team: Product development, sales, customer service and anyone else who even indirectly impacts on the customer experience.
Respond to negative comments and low scores immediately and solve those customers’ problems. They’ll appreciate the attention and will be more likely to remain your customers.
Should you ask for high Net Promoter Scores? (No.)
I love the Net Promoter Score as a marketer, and can learn a lot about a company just by looking at that one little indicator. A company’s NPS tells you a lot about the quality of their product, their customer service, their marketing — and I can even hazard a guess at the quality of their workplace.
But as a consumer, it irritates me a little bit. Not that I’m being asked for my views on a company, but rather the way I’m asked when presented with any kind of survey. “When you receive our survey, I’d appreciate a high rating.” I’ve actually been asked that. It doesn’t matter the rating system or whether they’re even deserved, I’ve been asked for high ratings.
I’ve had Lyft drivers ask me for five stars, customer service people ask me for high ratings, and even servers at a restaurant ask for high marks on their mobile feedback surveys. Now, I understand that this is important to these employees. After all, their salaries and bonuses likely are tied into their Net Promoter Score or other ranking system, and if the score dips low enough, they could lose their jobs.
If you’re regularly getting anything below a 40, that doesn’t mean you have to boost your score, it means you have to fix your company.
Use the NPS to segment out different aspects of your company. Ask people to rate their interaction with your website or your customer service department. Ask them to rate your technicians’ responsiveness to their problems.
When you find areas that are receiving low scores, try to determine what’s garnering those scores. Change your processes, provide new training, or make staffing changes, and fix the problem.
Then, measure the results and keep tweaking until you have a good score.
Improvement is an ongoing process, so you’re going to have to continually measure and fix the problems you find. And if you can do that, you can turn your company into a world-class organization that other people can’t wait to tell their friends about.
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