What Is Your Net Promoter Score?

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Regardless of your industry, it’s never been more important to understand your customer loyalty and satisfaction. How happy are your existing customers, and are you on the right track to creating loyal superfans? One way to measure this is through your Net Promoter Score (NPS).

The Net Promoter Score (NPS) is a way to calculate customer satisfaction and how likely customers are to stay loyal to your company. This is one of the most important metrics you can track for your business, and it helps you achieve a better customer experience. Not only can your NPS predict business growth or indicate that you need a new strategy, but it gives you a clear glimpse into your customers’ impression of your brand. 

Your customer experience has never been more essential. In fact, just a 10% increase in customer retention leads to a 30% increase in your overall company value. This statistic means you need to pay close attention to your NPS score so you have a greater understanding of your current standing with customers. 

Your Net Promoter Score is relatively easy to calculate on your own, so there’s no reason not to include it in your larger strategy. In this guide, we’ll explain how to calculate your NPS score as well as all of the factors that go into the final number. Ultimately, it’s all about finding ways to adapt to your customer’s needs and expectations. 

What Is The Net Promoter Score?

First, let’s define what a Net Promoter Score even is (plus why it matters to your brand). In simple terms, NPS score is a customer loyalty measurement. By asking customers how likely they are to recommend your product or service to others on a scale of 0-10, you can get a general understanding of how users feel about your brand. 

You’ve likely encountered NPS score questions with other brands without even realizing it. They often happen after a customer service interaction or after making a purchase, but they’re an important part of the entire customer journey. The premise is simple: by asking customers how likely they are to recommend the product/company/service to a friend, businesses can improve their experience, support, delivery, and so on. 

There are a few different NPS survey question examples you’ll encounter:

  • 1. How likely are you to recommend our company to a friend or colleague?
  • 2. How would you rate your experience with our company?
  • 3. How likely are you to recommend this workplace to a friend or colleague?
  • 4. How well does our product meet your needs?

Every brand wants enthusiastic superfans. These are the most loyal customers who are passionate about sharing their favorite products, services, and brands. A high NPS score indicates you’re on the right track, while a low score means changes still need to be made. 

How Do You Calculate Your NPS Score?

Next, how do you calculate your Net Promoter Score for yourself? You don’t need any complicated statistics or research experience to figure this out quickly. It’s simply the percentage of promoters minus the number of detractors. What do these terms mean? 

  • Detractor (0-6): A detractor is anyone who gives a rating of 0 – 6 in response to your “would you recommend…” question. These responders are not likely to recommend your company or product to others, and they won’t likely make another purchase. 
  • Passives (7-8): Anyone who answers with a 7 or 8 is not actively recommending the brand, but they also aren’t likely to leave a negative review. These are close to becoming promoters. 
  • Promoters (9-10): A promoter is a superfan who is amongst the brand’s most enthusiastic customers. They’re likely to refer others and fuel company growth. 

As you can tell from the calculation (promoters – detractors), the passive responses don’t affect your score. These middle-ground answers aren’t strong enough either way, but that doesn’t mean they can’t be swayed to become promoters in the future with the right strategy. 

Ultimately, your NPS score is a number from -100 to 100. If your score is negative, you have more detractors than promoters. If your score is positive, you have more promoters than detractors. With numbers this clear, it’s easy to see why your NPS is such a valuable metric. 

To see an example of this score in action, look at one of the companies pushing the limits of NPS scores. Tesla, the leading electric car manufacturer, reportedly has an NPS score of over 90. Frequently ranking at the top in car owner satisfaction surveys, 91% of Tesla owners said they would “recommend” the brand or “buy the product again.” Though far from the norm, it’s easy to see how investing in your customers and your product pays off with your NPS score. 

What Constitutes A Good NPS Score?

Next, let’s explore what makes an NPS score “good” vs “bad.” In reality, the answer depends on a number of factors like your industry, brand age, and so on. Many research groups conduct studies to set benchmarks for specific industries, and these are a helpful guide for getting started. According to the SAT Metrix 2019 Benchmarks, these are some averages for common industries:

  • Department and specialty stores: 52
  • Online entertainment: 43
  • Ecommerce: 43
  • Hotels: 36
  • Banking: 34
  • Grocery/supermarkets: 32
  • Software: 30
  • Health insurance: 14
  • Cable: -6

As you can see from the sample benchmarks above, there is a lot of variation amongst industries. Some industries have so many detractors (like cable and internet providers), that they’ve earned a reputation for their bad service. On the other hand, other industries are growing their experience to improve this score with each interaction. 

There are many different ways to determine what makes a “good” NPS, and many experts argue there is no such thing as a “perfect” (100) score. Global NPS standards say that any score over 0 is good simply because the brand has more promoters than detractors. 

In reality, there is no black-and-white answer. A better line of thinking would be to strive to surpass your industry average and to always do better. You’re always your own best competitor, so set ambitious goals, meet them, and set new ones. There’s no such thing as being comfortable when it comes to your customer experience. 

What Influences Your NPS Score?

Lastly, what influences your NPS score? There is no single aspect of your company that you can point to as the only influencer of your Net Promoter Score. Essentially, it’s the sum of many parts. Like all other metrics important to operating a business, you need to consider all of these influencing factors:

  • Customer support: It comes as no surprise that your customer support directly impacts your NPS. If you quickly and efficiently solve customer concerns, your NPS rises. 
  • Product or service performance: How well does your product or service meet your customers’ expectations? If you fail to live up to what they expect, this negatively impacts your score. 
  • Reputation: Your brand reputation also plays a large role in your NPS in many cases. Brands with a stronger reputation have greater customer loyalty
  • Experience: Lastly, the overall customer experience (or the sum of every interaction customers have with your brand) has a powerful effect on your score. 

That being said, there are still many limitations to using NPS score as a tool on its own. First, the results are easy to influence (either intentionally or unintentionally). For example, a company might not send surveys to those who are likely to be detractors or they might phrase the question in a way that’s likely to encourage more promoters.

Additionally, your NPS score is only a small sample, and it’s not always a good predictor of your business growth. While it gives an impression of your customers’ perception of your brand and overall experience, it’s just one part of the greater puzzle. 

To see how tricky this metric can be, just look at Cricket Wireless. With a score of 55, you might not think they have much to write home about. However, when compared to the average in the cellular service provider company (under 0), it’s clear that they’re going above and beyond to appeal to customers. This just goes to show that an “average” or “good” score can actually be excellent when you look at the big picture. 

Improve Your Net Promoter Score

In conclusion, your NPS is important, but it’s not the only metric that’s important when it comes to your overall strategy. Ultimately, it’s a good idea to focus on your big-picture customer service and customer experience to create a lasting, memorable interaction with each and every customer. 

Building a strong relationship between your brand and your customers has never been more important, so consider how your NPS score can work for you. There is no one-size-fits-all formula for creating superfans, but it pays to have a customer-first business from the ground up. The brands that are listening to their customers are the ones with the higher NPS scores, so find your own voice today. 

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