Good Net Promoter Score (NPS)
What is the Net Promoter Score?
The Net Promoter Score or NPS is a key figure that is intended to provide information on the success and customer satisfaction of a company. A simple, standardized customer survey, an evaluation, and feedback from customers or users are obtained, from which a measurement value comparable across companies can be calculated.
With the NPS's help, companies should receive feedback and data on the satisfaction of their customers in a simple manner and be able to use this data to derive further indicators for their work. Since the survey and answer options are standardized, the score enables comparability with other companies. The score helps organizations evaluate their customer service, customer journey, and the percentage of customers that are promoters from the set of survey respondents.
To determine the Net Promoter Score, companies ask their customers about their willingness to recommend the provider. Respondents can rate their satisfaction from 0 (very unlikely) to 10 (very likely). A single question is asked, which, if necessary, is supplemented by an open answer field in which customers can provide written feedback. Based on the answers, a key figure - the so-called Net Promoter Score - is calculated to give the company an indication of customer loyalty and satisfaction.
How does NPS work
To determine and calculate NPS scores or the Net Promoter Score, a simple survey - for example, by email - is sent to (a representative group of) customers or users. The study includes the question: "What is the probability that you would recommend this company to friends or colleagues?" As an answer option, the respondent has values from 0 to 10 on a number scale. The higher the number a customer chooses, the more likely they are to recommend the company.
After the user has rated the company on the scale, he can provide additional feedback. For this purpose, he has an open text field where he can enter writing what he particularly likes or dislikes about the interviewing company.
The information and, if necessary, the customer's feedback are sent to the company, which can then evaluate the survey results (using a tool) and calculate the Net Promoter Score. The participants are usually not anonymized so that they can be assigned to their answers.
How to calculate the Net Promoter Score
To calculate the Net Promoter Score (NPS), the number scale is divided into three levels:
Respondents who give 9 or 10 points are among the promoters who view a company very positively and recommend it to others.
Respondents who give 7 or 8 points are classified as neutral towards the company. They are regarded as so-called passives or indifferent, which do not recommend the provider but would not damage his reputation through negative reviews. Accordingly, they are neglected in the calculation of the Net Promoter Score.
Respondents 0 to 6 points awarded are so-called detractors. They are critical of the company and also express this criticism. For example, they can warn other users or potential customers against using a company's service or products or publish bad reviews.
To calculate the score, the percentage of detractors is subtracted from the percentage of promoters. The difference is the Net Promoter Score, which can range between -100 and 100.
Example: A survey shows that 65 percent of the participants are promoters, which means they give 9 or 10 points. Twenty percent give 7 or 8 points and are therefore not considered as liabilities in the calculation. Fifteen percent of the respondents have rated as 0 to 6 points as detractors.
The detractors are now subtracted from the promoters:
65-15 = 50
The Net Promoter Score for this company is therefore 50.
Advantages of measuring the Net Promoter Score
Determining a key figure, such as the Net Promoter Score, can help you measure customer satisfaction and evaluate your unhappy customers. Such a survey focuses on the customer's perspective and thus provides essential feedback. This encourages a company to consider different aspects, encounter unknown problems, and assess its strengths and weaknesses better.
The number of participants is comparatively high in a procedure that is as simple and quick to implement as the Net Promoter Score. Many positive and negative opinions can thus be perceived quickly and with little effort, and positive and negative customers can be identified. Once recognized, critics can then be re-tuned, and promoters can be positively exploited. With relevant influencers, in particular, it can be worthwhile to contact them and enter into a dialogue.
The Net Promoter Score should make companies comparable with one another through the standardized question and answer scheme. This enables companies to draw meaningful conclusions about where they are in the market. In this way, studies also attempt to map the competition between companies in individual sectors.
In addition to the advantages of the system around the Net Promoter Score, vulnerabilities are always mentioned. The points system is often viewed as arbitrary and not easily transferable to other cultures. In some cultures, there may be a stronger tendency towards the middle, so that the 10 points are less frequently awarded. The trend towards recommendations can also vary significantly from branch to branch.
Investigations indicate that the simple distinction between promoter and detractor is too simplified. The net promoter score can only be used to derive limited indications of actual customer behavior and customer loyalty.
Another serious point of criticism is that the survey is hardly meaningful without the additional question of the reasons for the user. Only when the participant answers the other problem of why and thus reveals qualitatively usable information can conclusions be drawn from his answer. However, this qualitative data, in turn, makes it difficult to make data comparable in a standardized manner.
Efficient tools to measure your NPS scores
With the creation of the Net Promoter Score, more and more companies have specialized in offering tools with which Net Promoter surveys can be carried out. The best-known providers include:
With the help of the Net Promoter Score, also NPS, companies can receive an indication of customer loyalty and satisfaction. With the help of additional feedback, the causes of satisfaction or dissatisfaction should also be determined.