What is NPS?
Net Promoter Scoreⁱ (NPS) is a form of customer experience measurement that looks beyond customers being simply satisfied and aims to identify loyal customers who would recommend a business, brand, service or experience. It is measured by the question, “Based on your experience today, how likely would you be to recommend the brand to friends & family?”
So, what’s different about asking a customer if they would recommend to asking if they are satisfied? The key here is in relation to customer loyalty. If customers are loyal, they are much less likely to go elsewhere. Whereas research has shown that satisfaction surveys can be slightly misleading in that many defectors will mark that they are satisfied (Fred Reichheld 2008-2012).
Ultimately, through creating more loyal customers or promoters, you will keep existing customers for longer and attract more new customers through positive word of mouth.
How do we measure NPS?
Customers are asked to score on a scale of 0-10 and encouraged to write a comment to support their score. Scores are categorised as follows:
Promoters score 9 or 10 and are typically loyal customers who are most likely to stay for longer and encourage others to use the brand/service
Passives are customers scoring 7-8 and are less likely to recommend and more likely to go elsewhere
Detractors respond with 0-6, are likely to be unhappy and may even discourage others from using the brand/service
How is NPS is calculated?
It’s a simple calculation of, Promoters – Detractors = Net Promoter Score. For example, if you have 100 respondents, with 60 scoring 9-10, 25 scoring 7-8 and 15 scoring 0-6, a Net Promoter Score of 45 is achieved as follows:
NPS can achieve a score anywhere between -100 and 100, the higher the score the better. Commentary provided by customers should be analysed to understand the drivers of promoters, passives and detractors in order that service improvements can be made. Taking the right actions to improve the customer experience should lead to a decrease in detractors and an increase in the number of promoters. This, in turn, leads to better customer retention, an increase in new customers and ultimately higher revenue.
To find out more about our expertise in customer experience measurement programmes that deliver a better customer experience, please get in touch with ABa via the details below.
Dawn Hillson Experience Director dawn@aba.co.uk / 0161 431 1237
ⁱ Net Promoter Score is a registered trademark of NICE Satmetrix, Inc., Bain & Company, Inc., and Fred Reicheld.
