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What is Net Promoter Score (NPS)? And How to Measure It

When it comes to improving your customer experience and increasing customer satisfaction, your Net Promoter Score (NPS) is one of the most powerful tools in your arsenal. It helps you distill all your questions about how your customers are feeling into one simple rating, and is the perfect jumping-off point for continually improving your front line. Successful companies that experience long-term growth often have particularly high Net Promoter Scores.

The NPS was developed by Fred Reichheld, and it helps to determine a customer’s loyalty to your company. To find out your own NPS, you can include the following question when conducting customer surveys: “How likely are you to recommend our products/services to a friend or colleague?”

What each type of respondent means for your business

Instead of leaving the response open-ended, offer customers the opportunity to choose a number for their response on a scale of 1-10, with 10 meaning they are most likely to recommend. The scale helps you to sort customers into three categories: promoters, passives, and detractors. With these your responses, you can determine your company’s NPS score by subtracting the percentage of detractor responders from the percentage of promoter responders.

Promoters, customers who chose 9 or 10 on the scale, are some of your most valuable customers. Promoters are enthusiastic about what you have to offer, are likely to recommend your company to others, and will help spread the word about your brand.

Passives, who select 7 or 8 on the scale, are satisfied with your company but not necessarily eager to recommend it to others. They may even be swayed by competitors.

Detractors, who chose anywhere from 0 to 6, prevent an opportunity for improvement. Detractors are unhappy with their experience with your company, and may spread the word of that unhappiness with other people in their lives. It’s important to focus on creating a better relationship with detractors if at all possible.

In a world where customers have countless digital platforms to speak up about how they feel about a company—not to mention good old-fashioned word of mouth—it’s helpful to know what those customers might have to say ahead of time.

Why NPS Is Important

One of the major benefits of NPS is that it provides your company with a universal standard for measuring your customer experience success. There are many benefits to asking other survey questions alongside NPS questions and analyzing customer satisfaction in other ways, but NPS is a key component to understanding more about your company’s success.

When you know your NPS score, you can provide your customer-facing staff with a clear gauge of how well they are doing, and help them to chart out a gameplan to continually improve. Because many other companies use the NPS method as well, you can also use the score to find a greater sense of how you stack up against competitors.

If you already implement customer satisfaction surveys into your company’s regular routine, it’s easy to simply add the NPS question into the survey you already provide. If you don’t, surveys are a great way to seek out customer feedback, so now is as good a time as any to start. You may even consider including a follow-up question after the NPS inquiry, in which you ask customers to elaborate on why they chose the NPS rating that they did.

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What’s great about discovering your NPS is that it does more than just point out whether your customers enjoyed their experience with you—it also highlights which of them feel a sense of loyalty to you. Just like loyalty to your customers goes a long way in ensuring their satisfaction, your customers’ loyalty to you can make a significant difference in your company’s growth.

How to make sense of your score

Once you have survey results to work with, determine your net promoter score with a simple formula. To find it, subtract the percentage of detractors from the percentage of promoters. You’ll get a score ranging from -100 to 100. What that score means to you depends on how you prefer to contextualize it.

In the most basic sense, any positive NPS (0 to 100) is a good sign. In the context of your company, however, there are other factors you might want to consider. It’s helpful to compare your score to that of your competitors.

Consider the competition

Your NPS might not mean much to you in a vacuum, but when it’s held up against other companies’ scores, it can say so much. If your score is higher than other companies in  your area of expertise, you’ll know you’re on a great track. You can use this information as a jumping-off point to try to find out what it is that makes your company excel, and to reward your employees for a job well done. (Of course, you can also use this great score as motivation to keep improving. No matter how much success you have, there’s always room to seek out improvement opportunities!)

If your score is similar to or lower than that of your competitors, it’s a starting point to get ahead of the rest. With your NPS, you have valuable information about which customers may be willing to help you grow. You also have information about which customers are not having a positive experience with your company. You can use that information to improve the experience of those dissatisfied customers. Focusing on these details can give you an edge over competitors, especially those who aren’t prioritizing customer feedback and using it to grow.

Also consider looking at how your competitors with higher scores are keeping customers so happy. Do they have an approach you could learn from? If so, take that into consideration.

Compete against yourself

The sooner you start tracking your NPS score, the better. The longer your data goes back, the easier it is to spot patterns. Also, when you consistently accrue feedback from your company’s beginning, the results can be fascinating. You’ll end up with a data set that grows along with the company. As you attract more customers and hone your skills, you may see your NPS change for the better. Information like this very useful when tracking your company’s progress over the years.

Because of all this, one of the most powerful uses of your NPS is to compare it to your past scores. Compare your current net promoter score to the score you had a few months or even a year ago. (Be sure to control for things like repeat customers and other factors.) You’ll probably find more insight than you expected. At what point in your company’s trajectory did your score improve the most? What changes were you making in your company culture and practices at that time? These are some questions you may want to ask yourself when comparing scores.

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Help employees grow

Accruing and comparing past NPS data is also a great tool for motivating employees. When you have specific feedback, it’s easier to reward employees for their hard work. It’s also a great tool for increasing company morale. If your NPS points to certain negative changes over time, it can still be used as a positive tool.

Because your NPS can help you spot specific aspects of customers experience to improve, it’s a great learning tool. Employees who are faced with a lot of improvement opportunities will have specifics to focus on. Instead of the vague knowledge that they could be doing better, they’ll have actionable results. They’ll also have actionable goals to work toward. This provides a much more morale-friendly approach to improvement.

How knowing your customers can help you succeed

Since customers are the lifeblood of any company, getting to know them is always important. This is why customer feedback can be so key to any company’s success, no matter the industry. On a more specific note, knowing which customers chose which response on the NPS survey is very useful.

Promoters are your most loyal customers, and can help your company grow. Since they’re likely to spread the word, consider asking them to do so. You can ask promoters to leave an online review through platforms like TripAdvisor or Yelp. You may also consider asking them for referrals. If you’re comfortable with asking this and do so politely, they just may send you some excellent customers.

While passives and detractors are not exactly the same, they’re often placed in the same category. This is because neither stands to help your business. Even though passives don’t necessarily feel negatively about your business, they’re susceptible to the competition. As a result, you can’t assume they’ll grow your business through word of mouth.

To combat this, work on ways to improve relationships with both detractors and passives. Reach out to them with follow-up questions. Consider including an open-ended follow-up question after the initial NPS survey question as well. This allows passives and detractors to elaborate on their feelings about the company. The information you glean from these types of questions can be a huge clue as to how to improve.

Also consider reaching out to detractors to find out how you could make their experience better. You may not keep them as a customer, but you’ll gain valuable information. (And hey, your concern over their experience just might transform them into a loyal customer!)

Your net promoter score can make such a difference in your company’s success. It all boils down to just one simple question. Now is as good a time as any to start asking it!

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