Net Promoter™ Score
The Net Promoter Score (NPS) is the key metric of the Net Promoter System. It is measured by asking "the ultimate question" that allows companies to track promoters and detractors, producing a clear measure of an organization's performance through its customers' eyes.
To calculate NPS, start with the ultimate question, "How likely are you to recommend us to a friend or colleague?" and score the answers on a zero-to-ten scale. Your Net Promoter Score is simply the percentage of customers who are promoters (those who scored 9 or 10) minus the percentage who are detractors (those who scored 0 to 6).
Measuring your Net Promoter Score gives you a number you can compile and track regularly, not only for a whole company but also for each business, product, store or customer-service team. You can also track it for customer segments, geographic units or functional groups. It helps everyone focus on the twin goals of creating more promoters and fewer detractors. It is, quite simply, your customer balance sheet.
How the Scoring Works:
We score the answers to the ultimate question on a simple zero-to-ten scale. This scale is familiar and easy for customers to understand. First, it avoids people mixing up the ends of the scale by erroneously selecting "one" on a one-to-ten scale (a zero is never a good score). Second, it provides enough choice so respondents don’t default to a score of "five out of five" for satisfactory experiences.
With the 11-point scale, we see actual behavioral differences from those who score nines and tens versus those who score zeroes and sixes. These behavioral differences are linked to economic value, the true power of understanding your NPS.
Promoters (9 to 10)
Promoters are loyal, enthusiastic fans. They sing the company's praises to friends and colleagues. They are far more likely than others to remain customers and to increase their purchases over time. Moreover, they account for more than 80% of referrals in most businesses. They are, in general, pleasant for employees to deal with.
Passives (7 or 8)
We call this group "passively satisfied" because this group is satisfied—for now. Their repurchase and referral rates are as much as 50% lower than those of promoters. Their referrals are likely to be qualified and less enthusiastic. Most telling: If a competitor's ad catches their eye, they may defect.
Detractors (0 to 6)
Detractors are unhappy customers. They account for more than 80% of negative word of mouth. They have high rates of churn and defection. Some may appear profitable from an accounting standpoint, but their criticisms and bad attitudes diminish a company's reputation, discourage new customers and demotivate employees.
Transactional vs relational NPS programs
Relational NPS surveys are deployed on a regular basis (i.e.- quarterly or annually). The goal is to get a periodic pulse on your customers and understand how they simply feel about your company overall. This data can be used to check the health of customer year-over-year and provide a benchmark for company success. Transactional NPS surveys are sent out after the customer interacts with your company (i.e.- a purchase or support call). It’s used to understand customer satisfaction on a granular level and provide feedback about a very specific topic. It’s best to use both types to understand your customer at macro and micro levels.
What can you measure using NPS?
You can measure almost anything using an NPS score. In addition to understanding the overall NPS for your organization, you can track scores for everything from individual products, stores, web pages, or even staff members. It will help you understand your target market better and see how they respond to your product or service, social media campaigns, and customer service agents. The goal is to gain loyal customers who become brand evangelists instead of consumers.
Using NPS to survey and measure employees (eNPS)
While most Net Promoter Score surveys are designed to collect customer feedback they can also be used to measure employee sentiment, or what is commonly referred to as employee net promoter score (eNPS). eNPS measures how likely your staff members are to recommend your company as a place to work. We recommend against using eNPS to measure employee feedback in favor of other more comprehensive survey methodology such as employee engagement surveys. eNPS lacks the complexity an engagement survey has, as it’s only one question. It can be a good a starting place, but doesn’t give you a complete picture of employee health, and you won’t know where to make improvements once you get the data