Think about a brand you absolutely love. They’ve got a five-star product in your opinion, or you’ve fallen for their fantastic performance, or you’re super happy with how they manage their business. On a scale of 0-10, how likely would you be to recommend that brand’s products or services to a friend? If you answered 9 or 10, you can consider yourself a promoter.
This idea serves as the foundation of the Net Promoter Score℠ (NPS®).
A Net Promoter Score℠ is a way to measure the loyalty between a company and its customers. The measurement comes from a score calculated based on the answer to this question:
On a scale of 0-10, how likely are you to recommend this product/service/company to a friend or colleague?
- Score of 0-6: Detractors. Not likely to recommend. These customers are overall unhappy with your brand and can cause damage through negative word-of-mouth talk.
- Score of 7-8: Passives. Somewhat likely to recommend. These people don’t hate your brand, but they’re not thrilled with it either. They might easily switch to a competitor; they lack brand loyalty.
- Score of 9-10. Promoters. Extremely likely to recommend. These respondents love you. They are your repeat customers, and they’ll happily tell others how satisfied they are with you.
To calculate your NPS®, you take the percentage of customers who are promoters minus the percentage who are detractors. You end up with a score between -100 and 100. The higher the score, the more promoters you have, and the better you can infer your business is performing.
According to Bain & Company, which first introduced NPS®, “High scores on this question correlated strongly with repurchases, referrals and other actions that contribute to a company’s growth.” And their case studies show that the NPS® question is tops when it comes to predicting behavior. Therefore, the score is often seen as a good indicator of future growth.
When looking at your NPS®, here are four things your score can tell you:
- It can show what your company is doing well. Higher scores often reflect a healthy business. Results can reveal areas of strength that should be maintained or built up even further.
- It can uncover what needs to be fixed or improved. A lower score can indicate the need for probing into customer satisfaction or loyalty issues.
- It can initiate relationship building. The Net Promoter SystemSM encourages reaching out to customers to address their concerns, leading to one-on-one interactions that can be powerful.
- It can help motivate employees. Feedback related to your score can give your team members incentive for making improvements and providing a great customer experience.
Companies in all types of industries are using Net Promoter Score® – from financial to healthcare, tech to retail, and more. CSP is licensed to use the NPS®, as well as other metrics, to help businesses grow loyalty and customer satisfaction. To know more about how we incorporate these powerful analytics into a customer experience strategy, contact CSP with your questions.
Net Promoter, NPS, and the NPS-related emoticons are registered trademarks, and Net Promoter Score and Net Promoter System are service marks, of Bain & Company, Inc., Satmetrix Systems, Inc. and Fred Reichheld.