What is the Net Promoter Score (NPS)? Definition and calculation
One of the standards in the field of determining customer satisfaction and loyalty is the Net Promoter Score (abbreviation: NPS). The Net Promoter Score system is a scoring model developed in 2003 by Satmetrix, Bain & Co and Frederick F. Reichheld. By surveying your customers, the Net Promoter Score measures the likelihood that a customer will recommend your company or your products and services to others. The Net Promoter Score is thus simultaneously an indicator of customer satisfaction and customer loyalty.
To determine and calculate the Net Promoter Score, ask your customers just one question across all possible channels:
How likely are you to recommend our product (our service, our company, our brand)?
Your customers are given a scale with a number range from 0 to 10 to answer this question. The developers of this scoring model interpret the customers’ response behaviour as follows:
- 10 and 9 points (promoters): Active promoters! Customers who indicate one of these two values are most likely so satisfied with the company or the product that they actively report on their experience.
- 8 or 7 points (Passives): Satisfied customers, but who do not talk to third parties about their experience.
- less than 7 points (Detractors): Clearly, these customers are not satisfied with your company or products and are most likely to talk about it with third parties.
Net Promoter Score: NPS example calculation
The following table shows the number of feedbacks per rating level, where 01 is the worst and 10 is the best. In this example, there were a total of 256 feedbacks.
To determine the Net Promoter Score, first add up the percentage points achieved by the promoters, here positions 09 and 10 with the values 13.28+19.92 = 33.2. Now calculate the sum of the detractors, i.e. the results of positions 01 to 06. The value here is 55.48. The positions of the so-called passives, i.e. 07 and 08, are not taken into account. The Net Promoter Score in this example would then be calculated as follows:
PROMOTORS ( 33.2 ) minus DETRACTORS (55.48) results in
a Net Promoter Score of -22.28.
Excursus: Difference between transactional (interaction-based NPS) and relational Net Promoter Score
As already described above, the main interest in using the Net Promoter Score is the degree of loyalty towards a company and its brands and products. From this degree of loyalty, customer satisfaction on the one hand and future business development on the other hand can be estimated, for example how high the proportion of repeat customers will be. In the past, the Net Promoter Score was therefore rather applied to the customers’ experience with the entire company and brands, without taking individual touchpoints into account. Here we speak of the “relational Net Promoter Score”.
The trend is towards the transactional Net Promoter Score
Meanwhile, companies use the Net Promoter Score predominantly in the context of touchpoint analyses (transactional NPS). Here, the question of whether customers would recommend the company to others is not only asked at the end of a purchase process or in the context of a general customer survey, but rather after one or even every interaction on the part of the customer with the company, for example after a complaint, a support call, after a return of goods or after logging into the customer area on the website. The transactional Net Promoter Score at interaction level thus reflects a much more “finely granulated” value than the “relational” Net Promoter Score. For example, companies may have a high NPS score at the relational level, but at the interaction level there may be a negative outlier that the relational NPS score cannot reflect and a company cannot respond with action accordingly. For example, after a contract renewal, the NPS score may be high as expected, but after a support or complaint call, the NPS score may be low if the complaint was not resolved to the customer’s satisfaction.
Beware of NPS “over-questioning”
Both methods of obtaining an NPS score have their justification. If you ask your customers for their NPS score on an interaction basis, this can lead to a kind of “over-questioning”, which may cause your customers to react in an annoyed way. Therefore, it is important not to question every interaction with the same customer, but to determine the NPS score at interaction level by randomly selecting respondents. You can be supported in this by sophisticated CX technologies, such as QuestionPro’s Customer Experience Management Platform.
Evaluation and presentation
Presentation of the Net Promoter Score
QuestionPro offers you different ways of displaying the result within the framework of the Net Promoter Score model, either as a slider or as an NPS meter. Other display formats within the QuestionPro reporting module are also possible. In addition, QuestionPro’s real-time analysis dashboard allows you to evaluate feedback in detail.
Evaluation via the Net Promoter Score dashboard
One of the most important features of the NPS calculation is to check how much the results vary over a period of time. This requires a graphical representation of the statistical data on a timeline, which QuestionPro’s NPS Dashboard gives you. The QuestionPro NPS Dashboard is one of the most advanced analytics platforms for NPS measurement anywhere. It provides detailed NPS values and NPS charts in real time.
Flexible scale adjustment of the Net Promoter Score in QuestionPro
The classic rating scale of the Net Promoter Score has so far been within a range of 0 to 1o.
At the request of many users, we have expanded this question type to include the option of customising the scale. It is now possible to choose from different scales.
The evaluation can now also be adapted. The original evaluation model of the Net Promoter Score is calculated from the following scheme:
Where, how and when is the Net Promoter Score used?
Customer feedback under the Net Promoter Score model should be collected and evaluated as often as possible, whenever and wherever possible, preferably permanently, perpetually! Some examples:
- A customer has a problem with your product and contacts your support. After the support call, the customer receives an email with a link to a satisfaction survey, which also includes the question about recommendation.
- A customer orders a product from you via the Internet. Some time after the goods have been dispatched, the customer receives an e-mail with a link to a satisfaction survey asking whether everything went well with the order and whether the customer is satisfied with the product.
- A customer logs into the customer area of your website and is automatically redirected to a landing page that includes the question about recommendation. However, today there is no need to redirect at all, as code snippets make it easy to integrate surveys anywhere on the website. This is less intrusive.
What use is the Net Promoter Score to you?
It’s simple: you know where you stand at all times! Through the permanent collection of data on the NPS, short and long-term trends can also be derived. And that with all the simplicity of the application! You always have the possibility to turn critics into real advocates by adjusting your customer retention strategy or your marketing activities when you realise that the Net Promoter Score is dropping or by patting yourself on the back when it remains stable in the upper regions!
Collect NPS feedback across all channels and determine Net Promoter Score
Provided you use a customer experience management system that can combine customer feedback from all channels on just one platform, you have the possibility to collect and evaluate feedback on the Net Promoter Score easily and without much effort. Now you can find out where the question “Would you recommend us?” can be placed.
Collect NPS feedback by e-mail
Easily integrate the Net Promoter Score question into an email, such as a newsletter, confirmation email, invoice or any other key interaction with your customers. With QuestionPro, you can embed the survey directly into the email text. And according to our own findings, this increases the response rate by a whole 11%, because with this option the question is answered with a single click.
Collect NPS feedback via the website
Your website offers a variety of ways to gather data to determine your Net Promoter Score. Here, too, you can take an interaction-based approach, for example by redirecting your customers to a landing page with a survey or displaying a pop-up survey after they have completed an order or booked a room, flight or trip.
Determine NPS via online intercept survey
However, it is also possible not to proceed in an interaction-related manner, but to display a screen pop survey based on the surfing behaviour of the website visitor. For example, you can use the time spent on the website, the visitor’s origin, the time of the visit or the page currently open as parameters for displaying a survey. There are many variations of the online intercept survey.
Use feedback tabs to determine the NPS
Forced pop-up surveys to determine the Net Promoter Score can certainly be very annoying. We all know this from our own experience. However, if you don’t want to put your customers through this, you have the option of placing a tab at the edge of the website which, when clicked or tapped, places a layer with an NPS survey over the open website. This is a very elegant solution and gives visitors the choice of whether they want to give you feedback or not!
Collecting feedback via mobile surveys, SMS, feedback terminals, interview
SMS – The almost forgotten feedback variant
There are many other ways to ask your customers for NPS feedback! By SMS, for example. In times of WhatsApp or other messengers, the good old SMS has almost fallen into oblivion. But especially for ultra-short surveys, such as the Net Promoter Score, SMS is a wonderful medium! Mobile market research has long since rediscovered SMS!
Dear customer (or personalised), we are pleased that you are using our services. We would like to know from you how satisfied you are with us. Would you recommend us to others? Send us a number from 1 to 10, with 10 being the best rating. The answer is free of charge for you.
It could be put into practice like this or similar.
NPS Feedback Terminals
Gaining customer feedback via feedback terminals on the wall or as a stand-up display is also popular. Guests in a hotel, for example, can vote at the touch of a finger whether they would recommend the hotel or not. The same applies to concept stores or in-cafés, supermarkets, fast-food restaurants, airlines, etc. Determining the Net Promoter Score is of great importance for all industries!
Ask your customers personally about the NPS
Even if it is almost unimaginable: people still talk to each other personally. In a shop, in a restaurant or in a hotel, you are welcome to ask the question about recommendation in person and write it down yourself using a tablet. And this doesn’t even require network access, because with QuestionPro, data for determining the Net Promoter Score can also be recorded offline and then synchronised.
Use QuestionPro’s web-based NPS software to determine your Net Promoter Score
With the QuestionPro CX Suite for customer experience management and touchpoint analytics, you have a powerful tool for intrinsic measurement and graphical representation of the Net Promoter Score! You can either embed the recommendation question in your customer satisfaction survey or place it as a code snippet anywhere on your website or social networks! We are very happy to support you with this!
Determine Net Promoter Score: It’s so easy with QuestionPro
With the QuestionPro platform for customer experience management, you can create, send and analyse NPS surveys in no time. Here we show you how easy it is to use the Net Promoter Score question type.
Starting with the QuestionPro Advanced licence variant, you can create and analyse the Net Promoter Score with just a few mouse clicks. To do this, simply select the menu item “+Create survey” on the right in your user interface.
After you have created and named the survey, click on “Add question”.
Then, on the upper left side of your screen, select the “Advanced” tab and then the Net Promoter Score selection.
In the last step, enter your question and the respective proficiencies. That’s it!
Net Promoter Score: advantages and benefits of the application
The Net Promoter Score is very easy to determine as it consists of only one question. To create an NPS survey with QuestionPro, simply drag and drop the predefined NPS question type into the workspace via the questionnaire editor. The survey participants only have to click on a scale point to submit their answers. So it doesn’t take much time for both NPS survey initiators and survey participants, yet you get meaningful feedback on your customers’ loyalty.
Improve customer experience
The answers to the NPS question within touchpoint analyses provide information on which touchpoints you need to improve the customer experience and thus also increase customer satisfaction. Always remember: customers who answer the NPS question with 9 or 10 are true brand ambassadors of your company and are very likely to recommend your products and services to others without you having to reward them.
Stop customer churn by identifying dissatisfied customers
It is more economical to retain an existing customer than to acquire a new one. The NPS helps you identify dissatisfied customers and find out WHY they are dissatisfied when you combine the Net Promoter Score question with other questions, such as open-ended questions. Satisfied customers will continue to buy from you, giving you a steady stream of sales. Acquiring new customers costs much more than keeping your existing customers happy and satisfied. With your NPS, you can assess which customers are a potential churn risk and take immediate action to retain them and make them happy again. Take care of all complaints and grievances and make it worthwhile for your customers to stay with you. An angry or unhappy customer will tell many more people about their experience than a happy customer would. Customers who churn not only affect your sales, but also the reputation and ‘health of your brand’ (brand health). Talk to your customers, understand what has upset them and try to fix it.
Simple NPS benchmarking
Because the Net Promoter Score is a very simple and standardised way of determining customer loyalty, you can very easily benchmark the results against other companies and industries.
Predict repeat purchases
A good NPS score means that your current customers are likely to buy your products in the future. Using the Net Promoter Score therefore allows you to forecast future sales and plan your marketing and sales actions accordingly.
Measures to improve the NPS score
The Net Promoter Score is a very important indicator that gives you information about the loyalty and satisfaction of your customers. Improving the NPS means taking actions that increase customer satisfaction. Improving your NPS is crucial to turning your detractors and detractors into true promoters. We have outlined some key steps and tips for you to improve your NPS scores. Let’s look at them in detail.
Respond immediately to bad NPS ratings.
Reacting quickly to negative customer feedback is a very crucial factor in improving the Net Promoter Score! Therefore, add so-called action alerts to your NPS surveys that you create with QuestionPro, which cause responsible persons to receive an alert by email in case of a negative evaluation. They can then immediately contact dissatisfied customers to solve the problem. Closing the NPS feedback loop is essential and shows your commitment to providing a positive customer experience and ensuring your customers are truly satisfied.
Problem solved? Resend the NPS question
Don’t let the original NPS rating from disappointed customers stand, but send a resend NPS questionnaire to which the now satisfied customers can give a new, now positive rating, which will then improve your NPS score.
Empower and enable your staff to respond to customer enquiries
Ensure that your staff are well educated and trained to resolve customer queries outside their area of expertise or specialism. Your customers will appreciate not being sent from department to department looking for answers. Ensure that all staff who have contact with your customers also have access to the relevant data and customer histories so that they can make quick decisions and take action to restore customer satisfaction. This will improve your NPS score in the long term.
Exceed customer expectations
It’s fine to focus on your NPS score, but focus your attention and efforts on exceeding your customers’ expectations. Use your NPS score to measure the gap between customer expectations, customer service and customer experience. Exceeding customer expectations significantly increases customer satisfaction, which in turn increases your NPS score and therefore loyalty.
NPS customer feedback, good or bad, is essential for businesses to improve processes, operations, products, services, services and offerings. Setting up a community or long-term feedback panel will help you gather feedback, which you can in turn use to improve customer experiences. But a customer insight community can do much more for your company! Click here for detailed information on QuestionPro’s community platform.
Build NPS champions
Creating a positive customer experience and achieving a high level of customer satisfaction is not only the responsibility of the teams that deal directly with customers. It is the responsibility of all departments and employees. It is essential that all employees think and act in a customer-focused way and that everyone also has access to internal NPS reports and results. Build internal NPS champions in your departments by making it public internally which departments or specialist areas (internal NPS benchmarking) have the best NPS score.