What is the Net Promoter Score?

The Net Promoter Score is one of the most used satisfaction indicator by businesses in all industries. It’s now an indispensable tool to measure customer satisfaction. The NPS is based on the likelihood of your customers to recommend your products/services to friends and colleagues. Analysis completed by Bain shows that

« Companies that achieve long-term profitable growth have a Net Promoter Scores two times higher than the average company »

Apple is often cited as a case study for high NPS that correlates to phenomenal growth. Research suggests that higher NPS scores indicate more loyal customers, which leads to more revenue and higher profits.

How can we calculate our NPS?

To calculate your NPS, it comes down to asking one simple question to your customers:

“How likely is it that you would recommend our company to a friend or colleague?”

The respondent is then given a standard scale that ranges from 0 (not at all likely) to 10 (extremely likely). Based on how a customer responds, he/she is classified into one of three categories:
Promoter (9-10)
Passive (7-8)
Detractor (0-6)

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Once each customer is classified into a respective category, your company’s Net Promoter Score can be calculated by subtracting the percentage of Detractors from the percentage of Promoters. It will be a number between -100 and 100.

Promoters, Passives, Detractors?

As explained in Qualtrics’ blog:

Promoters are best described as your customers who are loyal and enthusiastic about your company and will continue buying and referring others. Promoter referrals fuel viral growth that you don’t have to pay for. The cutoff for Promoters is intentionally high at 9 to ensure that the customer is an exceptionally enthusiastic fan.

Passives are generally satisfied customers, but lack the enthusiasm seen in the Promoter group. A 7 or an 8 rating is no doubt impressive, but research has found that this group is vulnerable to competitive offerings and is therefore not immune to defection.

Detractors are a potentially dangerous bunch who are often unhappy and can diminish your brand through negative word of mouth. A customer who rates your company between a 0 and a 6 requires proactive outreach to resolve issues before damage is done.

What is a good Net Promoter Score?

Generally speaking, a Net Promoter Score that is below 0 is an indication that your business has a lot of work to do to improve its customer satisfaction levels.

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If your NPS is higher than 30, it means you are doing great and have a lot more happy customers than unhappy ones. The higher your NPS, the more your company is generating positive word-of-mouth from your customers and the more likely referrals will convert into new leads and more revenue for your company.

The NPS in summary

In summary, the Net Promoter Score can definitely help your business. By calculating and improving your NPS, you will increase your customers’ loyalty, generate more positive word-of-mouth and more referrals, which leads to more revenue and higher profits.

Most companies use modern tools to keep track and to improve their Net Promoter Score over time. It lets them automate the feedback process.

Looking for a tool to calculate and improve your Net Promoter Score?

We’ve built a modern tool called Inputkit to help businesses calculate and improve their Net Promoter Score.

Learn more