What is NPS Score?
Net Promoter Score, or NPS, is a customer satisfaction metric that measures customer loyalty and satisfaction. It does so by asking customers how likely they are to recommend a company’s products or services to others.
NPS surveys usually take the form of a single-question survey that asks customers a question similar to “How likely are you to recommend our product or service to others?”. This question is then followed by a ten point scale where respondents can indicate their likelihood to do so, where a score of 10 means they are very likely and a score of 0 means they are very unlikely.
Understanding NPS Scores
Once customers have submitted their responses to the NPS survey, they are categorised into the following three groups based on the score they selected:
Promoters are the respondents that choose a rating of 9 or 10.
These respondents are the most beneficial to a brand as they are highly satisfied customers who can help draw in more business by spreading a good word about your company to friends, family, colleagues, or others.
Passives are the respondents that choose a rating of 7 or 8.
As the name suggests, passives are indifferent toward your company and their experience with it, and are therefore not inclined to spread a word about it, neither good nor bad. These customers are unlikely to have an effect on your brand image.
Detractors are the respondents that choose a score between 0 and 6.
Detractors are unhappy customers that are unlikely to have anything positive to say about your company and its products. They may even prove to be detrimental to your brand image as detractors may choose to share their negative experiences with others, detracting potential customers away from your brand
Once respondents have been categorized in the aforementioned groups, the following formula may be used in order to calculate NPS:
NPS Score = % of Promoters – % of Detractors
Alternatively, an online NPS Calculator can also be used to calculate NPS in a quick and easy way. With an NPS calculator, all you have to do is input your detractor count, passives count, and promoter count, and the NPS calculator gives you your result immediately.
How to analyze an NPS score?
NPS scores always range from -100 to +100, where a positive score indicates that you have more promoters than detractors and a negative score indicates you have more detractors than promoters.
Once you have received the results from your NPS Calculator, it is important to analyse your results appropriately in order to use your scores in the best way to improve CX.
There are many different ways in which you can analyse your NPS score data, and these are a few:
Analysing Respondent Categories
It is important to not just understand the three different categories of respondents, but to also understand the difference between different scores. For instance, someone who chose a score of 0 will be in the same detractor category as someone who chose a score of 6, making it important to be aware of the respondent distribution across these scores. This can be done using a bar chart that reflects the percentage of respondents that gave each score, from 0 to 10. With this visual, you can observe the following:
- Are your detractors evenly distributed on the 0-6 scale or do they cluster toward the top or bottom? (Detractor distribution between the scores 0 to 6)
- Do you have a lot of customers who are either highly satisfied or highly dissatisfied? (Very few Passives)
- Do you have a large number of passive respondents who can be turned into promoters? (whether or not most passives chose a score of 8)
Understanding CX Differences on the Ten Point Scale
By understanding how every score differs from each other you can try to find patterns that help explain customer dissatisfaction. This can be done by adding open-ended follow-up questions to your NPS survey where you can ask customers why they scored you the way they did.
Identify Market Segments on the Scale
You can get to know more about your customers by analysing NPS by customer market segments. This involves breaking down NPS by market segments from demographics to psychographics.
The Correlation between NPS and Customer Tenure
Try to identify whether your long-term customers are more likely to give you a higher NPS score or not. If you notice that customer tenure does not seem to have an effect on NPS, you must try to figure out why, as this information can be leveraged to improve customer retention.
The Correlation between NPS and Revenue
By analysing the correlation between your revenue and your NPS ratings, you may uncover information that helps you maximise ROI. This will also demonstrate the value of improved customer satisfaction and loyalty to your revenue.