In this next helping of Alphabet Soup we take a taste of NPS, or Net Promoter Score. Do we like how it tastes? Would we recommend it to a friend?

What is a Net Promoter Score?

The Net Promoter Score is an index ranging from -100 to 100 that measures the willingness of customers to recommend a company’s products or services to others. It is used as a proxy for gauging the customer’s overall satisfaction with a company’s product or service and the customer’s loyalty to the brand.

- Medalia

Net Promoter Score gives us a glimpse into customer satisfaction and enthusiasm about a business. It is arrived at by survey question asking whether the customer would refer your business on a scale of 1 to 10 and segmenting customers into three categories based on the answer given:

1. Promoters are very likely and even enthusiastically recommend or refer your business. Promoters rate your business with a score of 9 or 10.
2. Passives are generally satisfied customers, but are not enthusiastic or necessarily loyal. Passives will keep an open mind about switching to your competitors if there is an advantage in service, quality, price or other attributes of the customer experience. Passives rate your business with a score of 7 or 8.
3. Detractors feel no love for your business and will spread that sentiment by word of mouth and social media. Detractors rate your business with a score of 6 or less. 

Calculating the Score

Like any measure for your business it is important that there be an adequately large sample of data before ascribing much merit to the result. In the case of NPS we like to recommend that a mimimum of 100 responses be available.

Let's assume that we have exactly 100 survey responses (we like easy math).  Let's also assume our responses were 30 promoters, 50 passives, and 20 detractors.

To calculate our score we take our percentage of promoters (30%) and we subtract from that the percentage of detractors (20%). In our example we have 30 - 20 = 10.

Ten might seem like a really low number, but for the first time you measure NPS anything above a zero is considered a win. 

image: https://www.retently.com/ - product suite for measuring Customer Sentiment and more.

Making Use of NPS

We say anything above a zero is a good score the first time you measure NPS because the real value in NPS does not come from a single snapshot, but from a continuous process of measurement and improvement.

By continually measuring NPS you gain an indicator on the future growth prospects for your business. The NPS score itself does not provide insight into why a customer gave the score they did. Customer feedback and comments are always more meaningful, but NPS provides a dashboard number on sentiment in general.

Understanding how the survey was collected may also be important. If you allow multiple channels for taking the survey like email, TXT, postcards, etc. you may find differences across channels in NPS averages. What intelligence this may provide your business would depend on many factors, but response type may be indicitive of some segment or attribute of your responding customer.

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Learn More

Wikipedia : https://en.wikipedia.org/wiki/Net_Promoter

NetPromoter.com: https://www.netpromoter.com/know/

Customer Guage: https://customergauge.com/blog/how-to-calculate-the-net-promoter-score/