Net Promoter Score (NPS) – Should you trust it?

net promoter score

The Net Promoter Score is one of many different metrics for measuring customer satisfaction and loyalty. The metric doesn’t just measure how satisfied a customer is with a company, it’s designed to gauge their willingness to recommend it to others.

Even with technology advancements, the NPS question is still real and you can find out in my latest article whether those advancements are good or bad “Is The Market Research Industry Like Choosing Between McDonald’s & Harrods?”

If you are looking to run a really quick survey which might include the NPS question, you can find some tips here from Survey Monkey and one of their guides “The ultimate guide to running a customer feedback program.”

 

How do you calculate net promotor score?

 “On a scale of 0 to 10, how likely is it that you would recommend our organisation to a friend or colleague?”

Based on the number a customer chooses, they’re classified into one of 3 categories which are either:

  • Detractors (0-6)
  • Passives (7-8)
  • Promoters (9-10)

The Net Promoter Score (NPS) question puts respondents into Promoters, Passives and Detractors; and then appears as a score. In fact, the index could range from -100 to 100 that measures the willingness of customers to recommend a product/company or services to others. I deem a score of 0-50 being seen as good and a score of 50+ as excellent.

Low and behold, we go to a meeting and we see someone rambling on about a single NPS score. A figure we are somewhat meant to make sense of. For the naked eye or those none research/insight savvy individuals; a number on a screen could mean many different things.

 

How to calculate your Net Promoter Score

Let me give you an example and say you sent out an online survey to 100 people who are your customers, the survey also included the NPS question and the 0-10 scale.

I would recommend entering all of the survey responses into an excel spreadsheet or there are some really easy tools such as the NPS Calculator or Customer Gauge  

Now, you need to break down the responses by Detractors, Passives, and Promoters. Add up the total responses from each group. To get the percentage, take the group total and divide it by the total number of survey responses. Now, subtract the percentage total of Detractors from the percentage total of Promoters—this is your NPS score

It should look something like:

(Number of Promoters — Number of Detractors) / (Number of Respondents) x 100

 

What is a good Net Promoter score?

So an NPS score can range from -100 to +100, a “positive” score or NPS above 0 is considered “good”, +50 is “Excellent,” and above 70 is considered “world class.” Any score above 0 basically means the majority of your customer base is more loyal.

However, a Net Promoter Score (NPS) below 0, indicates that your company needs to start understanding and improving your customer satisfaction levels.

 

How can you combine Net Promoter Score and other research methodologies?

 

Using video responses and the net promoter score

There are many different agencies and technology advancements that enable individuals all around the world to take a recording of themselves such as Plotto & Vision Live . This could be their opinion about the product or specific company. You can then relate their NPS score, whether they are a promoter, passive or a detractor against their video. So, you can put words and scores against actual meaning. For a research or Insight manager, what a valuable tool and process to go through, that can be translated for product or marketing managers to understand what customers are talking about.

 

The invaluable teachers that appear from the net promoter score

Many companies can become disheartened by the fact that individuals do not like a particular product they have worked so hard to create and develop. However, they are the most invaluable teacher for your business to grow and improve. Finding out why they are unwilling to pass on the good word about your product can be more valuable than evaluating the consumers who like you most. Poor customer service can be rectified, as can glitches in your product that make it second best to your competitors.

 

Follow up with your respondents who complete the net promoter score question

Have you made some changes from your NPS? Even if they are minor changes that customers may not actually recognise. You now need to let them know about the improvements that have come from their feedback. There’s nothing more satisfying as a customer than taking the time to fill out a survey and then actually seeing your feedback make a difference. It could be anything, as long as it closes the feedback loop.

 

Go beyond ‘WHY?’ when including the net promoter score in your survey

Depending on what you want to know, you could deviate from the standard “Why?” question. Some would say this is heresy, but there is no harm in testing and it could serve you well.

Also, its understanding how much data your organisation already has and how you can use previous data to make decisions to prevent having too much data and not enough understanding.

 

Remember the Bias

I don’t like naming companies and I am sure you can have a think of those who create bias within a survey, specifically an NPS question. You could argue, this is helping those individuals who do not understand the concept and therefore, it helps them to make a clear decision instead of a middle ground. Alternatively, it could actually attract someone to make a favourable score.

If you’re going to spend the time to track your Net Promoter Score, you need to actively and continuously try to improve it. By turning more customers into promoters and eliminating detractors, you will increase customer loyalty significantly. However, there are other metrics and ideas that you could use:

  • Customer satisfaction
  • Customer effort score
  • First response time to communication
  • Van Westendorp pricing
  • Repurchase ratio’s

 

What step are you taking to improve your Net Promoter Score?

 

 

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