What is NPS (Net Promoter Score)? How to Calculate
NPS (Net Promoter Score) is the index varying from -100 to 100 that measures the likelihood of customers to recommend products or services to others. It is used to measure customer experience. NPS scores are measured with a single question survey and reported with a number.
San Nicola la Strada Fred Reichheld is the creator of the NPS system. He learned that a http://programcollective.com/rx/buy-cialis-at-walmart.php customer’s eagerness to recommend a brand to a friend or colleague is a powerful indicator of your company’s potential to grow. He claimed NPS was Bozova The One Number You Need to Grow the title of the 2003 HBR article that introduced the Net Promoter Score.
buy real provigil The question
How likely would you recommend the company to a family member or friend?
Based on the score on a scale of 0 to 10, respondents are classified into 3 categories:
- Detractors: They give a score of 6 or lower. They are not satisfied with the company.
- Passives: They give a score of 7 or 8. They are satisfied.
- Promoters: They give a score of 9 or 10. They are delighted with the company.
Calculate the Net Promoter Score
The NPS is calculated as the difference between the percentage of promoters and detractors.
The Net Promoter Score is not a percentage. It is an absolute number between -100 and +100. For example, if you have 30% Promoters, 50% Passives and 20% Detractors, the NPS will be +10.
net promoter score (nps)
Introduction. “At ABC, we are continually trying to improve our service and we would like to hear your opinion on how we are doing this. The survey will only take 2 minutes to complete.”
P1. How likely would you recommend ABC to a family member or friend?
Not at all likely 0 1 2 3 4 5 6 7 8 9 10 Extremely likely
P2. What is the main reason for giving this score?
Ask for reasons
After asking the likelihood for recommendation, you need to ask your clients for feedback on an open-ended question (see above). The way you do it has a powerful influence on the usefulness of the answers you collect.
You have two alternatives:
– Using the standard question. If you don’t have a special reason to change it, it is the best option. What is the main reason for giving this score?
– Customize wording based on punctuation. The reason for doing this is that promoters, passives, and detractors will offer different suggestions. It is a way of showing them that you want to listen to them.
- For detractors: Thank you. Do you want to tell us why you have given us this score? Your opinion helps us get better.
- For passives: Thank you for your rating. Can you help us to know where we can improve to offer you an excellent experience?
- For promoters: Thank you. We love that you are very satisfied with us. We want to continue improving with you, how can we make sure that you have the best possible experience with us?
How to analyze Net Promoter score?
Understand score distribution. The distribution of the responses on the scale facilitates a better understanding of the general situation. In this example, the improvement strategy involves recovering a large group of very dissatisfied detractors. (1 and 2)
Observing evolution. A second type of analysis is observing how your NPS trends change over a time. A healthy trend is when you see an improvement. This can only achieve by increasing promoters and / or decreasing detractors. It will depend on the strategy of your company.
Focusing on targets. Not all clients of your company are the same. You need to segment the NPS results according to the most relevant customer groups as well as contact channels or geographical areas.
Analyze the verbatim. Only by matching the NPS scores to their verbatim can we understand customers’ reasons and design action plans. Do we need to address what is causing dissatisfaction in detractors? Or focus on passives? The answers to these questions are the keys to the action plan.
How do Promoters and Detractors impact?
If you are a business owner, you intuitively know that some of your customers are more valuable than others. Your best clients spend higher expenses, hire more services and stay with the company longer. They are enthusiastic about the company and recommend it. They are the Promoters.
Here is the challenge. Do you know how much these clients are worth more? Do you know how much you earn if you make an increase in promoters? The reality is that if you cannot answer these questions, you will be lost. You won’t know how much to invest in your initiatives to create and keep these valuable customers.
The method consists of relating promoters and detractors as well, with their income and expenses with the company. Promoters are expected to spend more, shop more often, and are more sensitive to new products.
The method has three steps:
- Design the relationship model. You will need to take into account the current strategy of the company, the customer segments and define the channels or business areas. The practice involves designing the model of the company’s relationship with customers.
- Decide on the type of NPS and the business metrics. Although we use the NPS as a satisfaction metric, it is necessary to ensure that you ask in the moments of truth that determine customer loyalty. In addition, finding the right business indicators (annual spending, subscription to new products, churn rate, and others) depend on customer behaviors.
- Relate the NPS with business indicators. A positive correlation is expected between the two data sets. Ultimately, you make decisions about where to invest in customer satisfaction based on how it affects revenue.