Decoding Net Promoter Score: Unveiling the Metric of Customer Loyalty and Beyond
Net Promoter Score (NPS) is like a grade that companies use to check how much customers like their brand, product, or service.
Many companies use NPS to see how loyal their customers are. It’s easy to calculate – they just ask customers one question: “On a scale of 0 to 10, how likely are you to tell a friend about us?” The score goes from -100 to 100. Higher scores mean customers like the company more.
NPS helps companies figure out how customers feel and how to make them more loyal. But it’s not the only thing companies should look at.
How to figure out Net Promoter Score
Customers answer the question with a number from 0 to 10. Those who say 9 or 10 are “Promoters” – they really like the company. Those who say 7 or 8 are “Passives” – they’re okay but not super excited. Those who say 0 to 6 are “Detractors” – they’re not happy and might say bad things about the company.
NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters. For example, if 50 people like the company a lot and 30 don’t, the NPS is 20.
Why Net Promoter Score is important
NPS helps companies know if they’re doing well. It was first talked about in 2003 and is seen as a way to help companies grow. It tells them if customers like them or not, and if they need to make things better.
What you can find out with NPS
Companies that sell things or offer services (like call centers or stores) can use NPS to:
See if customers will stay and be loyal
Understand how customers see them
Find out if customers are leaving
Watch how the company is getting better
NPS is used to see if customers like the company and if it’s growing. Companies can use it to figure out what they need to do better.
Understanding NPS
NPS scores go from -100 to 100. A negative score is bad because it means more people don’t like the company. A positive score is good because more people like it. Any score above 0 is okay, and above 50 is really good.
Knowing the average NPS in an industry helps companies see if they’re doing well compared to others. For example, if most companies have a score of -10, a score of -3 is not so bad. But if the average is 30, a score of 3 is not great.
Making an NPS survey
The basic survey has one question: “On a scale of 0 to 10, how likely are you to tell a friend about us?” But companies can add more questions like:
How old are you?
Why did you give that score?
How can we get better?
Can we check with you later?
The survey can be sent by email or shown on a website. Companies use software to keep track of NPS and see if it’s getting better or worse.
