July 29, 2020

What is a Net Promoter Score Exactly?

We speak to so many people in the goods and services industry who know the importance of having a Net Promoter Score, but who are not sure why it’s so important or what it is exactly. 

So, what is it exactly?

The Net Promoter Score measures customer loyalty using an index from -100 to 100, using a standard question: “On a scale of 0 to 10, how likely is it that you would recommend this business to friends and family?” 

The tool then uses the answers to filter into three categories: Promoters; Passives; and Detractors. 

 

Promoters (9-10): are the customers who are loyal and enthusiastic about your brand and will promote it to others.

Passives (7-8): are satisfied customers, but not enthusiastic enough to promote you to others and are open to considering competitors.

Detractors (0-6): actively try to disparage your brand by spreading negative feedback to others. 

 

The key difference between a Net Promoter Score and averaging customer responses, is in its unique calculation. 

For example, if we surveyed 3 customers and asked how likely they would be to recommend the business and their answers were 6, 8 and 10 the average of those answers is 8, which is pretty good. However the actual NPS for that scenario is 0.  

Remember, NPS uses the answers to filter into three categories; Detractors, Passives and Promoters. From here, the calculation is no longer about the actual score, it’s about the number of Detractors, Passives and Promoters.

The customer who scored an 8, is a Passive and they are excluded from the calculation as they aren’t really promoting the business at all.

The customer who scored 6 is a Detractor and they have negative things to say about the business, thus doing it damage. They count as 1 Detractor.

The customer who scored a 10 is a Promoter and they are actively promoting the business. They count as 1 Promoter.

The NPS Calculation excludes the Passives (the 8) and then it subtracts the Detractors (the 6) from the Promoters (the 10) which leaves a 0. One customer in our example isn’t talking about the business and the one giving negative feedback cancels out the one giving positive feedback. 

Here’s an online calculator to see it in action http://www.npscalculator.com/en

So to have a great NPS, you need lots of Promoters (9’s and 10’s) 

To turn Detractors and Passives into Promoters, you have to understand why they gave the score they did, so you can improve. 

No business is going to have a perfect score, not even a not-for-profit company giving away free hugs. There are still going to be detractors. For example, Apple has a NPS score of 72, that is considered extremely high for a company in the tech industry. 

 

The beauty of the Net Promoter Score is that it is easy to understand and communicate with your team. It is also easily obtained through customer satisfaction surveys. The NPS can have immediate consequences that your team can act on, as well as long term benefits for sales growth.  Every business should measure their own NPS and should know the NPS of their industry so they can compare and benchmark. 

However don’t be fooled into thinking that simply knowing your NPS is enough, you should also know why you received the score and what you can do to improve it.  Word of mouth, reviews and recommendations are critical to business. Get your customers talking about you for the right reasons and you’ll grow your business and get the edge over your competitors.

 

A Customer Satisfaction program is super simple to implement and provides an abundance of feedback from your customers for a very small investment. Contact us to get the ball rolling and unlock this golden feedback today.

 

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Here at Above Benchmark, we make Mystery Shopping simple. We help our clients design their ideal customer service experience. Then we have our professional Mystery Shoppers evaluate their customer service so we can compare it to their benchmark.

We live and breathe customer service and have been designing unique Mystery Shopping programs for almost 2 decades.

If you want to grow your business through better service and experiences, contact us today.

Simply call 1300 400 716 and let us help you achieve above your benchmark.

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