Understanding the Net Promoter Score

How Net Promoter Score Helps Your Business?

Net Promoter Score informs you of so many important aspects of your business. Here are a few things NPS helps business owners understand about their business:

  • An indicator of future business growth
  • A true measure of your overall customer experience
  • An indicator of customer loyalty
  • An indicator of your level of customer service
  • An indicator of getting future positive online reviews
  • An indicator of offline customer word of mouth
  • Measure multi-store location customer experience

What Is the Net Promoter Score (NPS)?

The Net Promoter Score is a simple process to help business owners understand how their customers feel about the experience with the business. It is based on asking customers one question - “How likely are you to refer a friend or colleague to our business?”. The customer answers the question by using the 0 – 10 point NPS scale with 0 being not likely and 10 being very likely.

NPS Scale

Through various research studies this one question has been proven to show true customer happiness, loyalty and how likely they are to refer your business to other, offline and online. It is easy way to measure customer satisfaction.

How To Use NPS System

The NPS is much more than just a 0 – 10 score and is not calculated as a simple average score for all customers. Instead the NPS formula begins by dividing your customers’ answers into 3 distinct categories.

NPS Score by Faces

0 -6: Distractors - You simply cannot afford to ignore these customers. Dissatisfied customers leave bad reviews and tell their friends about their negative experience. The thought of someone leaving you a negative review should be enough to get you to act now! And, it may just be the best opportunity you have to turn a dissatisfied customer into a customer for life!

7 -8: Passive - they are less likely to recommend your business. Your business met their needs and satisfaction, but it didn’t “WOW!” them. Theses customers have nothing really good or bad to say about you, but they aren’t confident enough in their experience with your business that they want to vouch for your business by telling others. These customers are only passively satisfied and represent missed opportunities to add to your Promoters.

9 -10: Promoters - These are your brand advocates! With a little guidance there is a good chance they will recommend your business with a great online review. A true measure of customer satisfaction is when customers are willing to talk up your business to their friends, family, and colleagues online and offline. Getting the Promoters to leave real testimonials online will go a long way in converting other shoppers into new leads.

*Note: The above is based off of the Net Promoter Score® (NPS®) which was developed by Satmetrix to measure customer experience and helps predict business growth.

NPS Formula

To calculate your NPS for your business you take the % of promoters and subtract the % of detractors. You leave out the passives all together.  The NPS formula generates a number value on a scale from -100 to 100.

NPS Formula

Below is an example of 100 customers answering the Net Promoter Score question and how their results factored into what the NPS score is for that business.

NPS example

The simple out the Net Promoter Score is calculated by subtracting the percentage of your disappointed customers from the percentage of your super happy customers. The results of this formula helps businesses understand how likely you are to grow because you understand how likely customers are to tell others to buy from you.