Net Promoter Score (NPS) is one of the easiest ways to measure how your customers feel about your brand. Find out how you could use NPS with our in-depth guide.
Businesses need simple ways to determine how their customers feel about them. It informs key decisions and strategies to help brands grow.
But without a reliable metric to measure customer satisfaction, it’s difficult to see how you can improve — or when you might be going in the wrong direction.
Thankfully, there is an easy, straightforward measurement that thousands of businesses swear by: Net Promoter Score (NPS). In our guide, we’ll explain exactly what NPS is, its key benefits, and how you can easily calculate a score for your business.
What is NPS Score?
NPS is a customer satisfaction benchmark used to measure how loyal your customers are and how likely they are to recommend you to others. It’s designed to give you an idea of how people feel about your business overall, rather than a specific interaction.
Using a scale of one to 10 for each customer, NPS lets you calculate your customer base’s overall sentiment towards your brand. Your NPS score will tell you whether your customers have a positive or negative impression of your brand, so you can take immediate action.
Who uses NPS?
Almost every industry uses NPS as a customer satisfaction and loyalty measurement. Household names that use the NPS metric include Qantas, British Gas, Lego, Procter and Gamble, Virgin, Porsche, eBay, AXA, the BBC, Facebook, and Phillips.
Although many of the biggest businesses across the globe see this as a standard customer experience tool, big names don’t always equal high scores. In 2022, estimates put Netflix’s NPS score at 68, Starbucks at 77, Amazon’s at 62, and Tesla’s at an outstanding 96 (Source).
Why is Net Promoter Score important?
1. Predict and prevent customer churn
NPS tracks your customer loyalty over time, so it’s a great way to predict — and prevent — any possible increase in customer churn.
With Feefo, you can set up alerts which let you know when you’ve received low Net Promoter Scores, so you can read the feedback and identify any serious issues.
2. Collaborate with your most loyal customers
Including your happiest customers in your marketing campaigns is a great way to build trust in your brand and attract new customers. NPS makes it easy to identify these ‘promoters’, and with recent data suggesting that the majority of customers now trust recommendations from their friends and partners over brand advertising, building loyalty into your marketing efforts is going to pay off.
When someone leaves you a high NPS score, why not create a follow-up question which asks them to leave their email address if they’d be happy to take part in a case study or collaboration with your business? You’ll quickly create a list of loyal customers that your marketing team can use to boost your brand.
3. An easy, recognisable benchmark
There’s a reason why NPS is such a widely used metric: it’s simple. It’s just one question, so it’s easy to drop into a survey or customer review form. You can track your score over time, and benchmark yourself against the competition.
Monitor your NPS scores regularly to notice patterns and see how you stand amongst your competitors. Many companies include their NPS score alongside their ad spend, customer churn, revenue figures, expenditure, conversion rate, and cost per acquisition in their weekly reports to all stakeholders, both internal and external.
4. It’s very simple to use
You don’t need to be a web developer or a trained statistician to effectively administer and measure an NPS survey for your business. Use a simple spreadsheet (or our calculator below) to interpret your results after you’ve collected all your data to calculate your score.
If you need more clarity or further customer insights on the specifics, think of follow-up questions you can ask to determine the reasoning for a customer’s score. You can easily incorporate NPS into web pages, pop-ups, and emails along the customer journey.
5. Helps identify areas of improvement
Customer feedback is crucial for you to know what is working and what isn’t. Tracking your NPS score will help you troubleshoot your product and services in real-time, quickly, and efficiently.
Under your main NPS question, provide the customer with the opportunity to explain their score. Given the opportunity, even dissatisfied customers are likely to use their time to tell you exactly how they think you can improve. No guessing games: you can seek solutions straight from the source.
What is a good NPS Score?
Technically, anything over 0 can be counted as ‘good’, because it means you have more promoters than detractors. However, one of the best ways to analyse your score is to measure yourself against your competitors.
Average NPS scores differ wildly from industry to industry — for example, a ‘good’ NPS in automotive may look very different to a ‘good’ retail score. There are lots of tools out there that will tell you what the average is for your industry and how your score measures up, allowing you to benchmark your business against your competition.
You can benchmark this score against your business’s internal targets and other relevant companies in the industry to understand your NPS compared with the rest of your sector. This gives a baseline indication of performance, which you can then investigate more thoroughly.
How is Net Promoter Score calculated
NPS calculation is easy and it all starts with one simple question:
“On a scale of one-10, how likely are you to recommend [business name] to a friend, relative or colleague?”
1. Collect responses through customer feedback
First, start asking this question to all of your customers. You can either run a survey or include the NPS question when collecting reviews (Feefo allows you to do both).
2. Collate your responses
Depending on the score each of your customers give, they will fall into one of three groups:
Promoters (score of nine or ten)
These are your most loyal customers. Not only are they likely to keep buying from you, they’re also the ones you’d probably expect to talk about how great your business is and refer you to others.
Passives (score of seven or eight)
These customers are satisfied but they may not be happy enough to recommend you just yet. They’re also likely to be swayed by the competition, rather than remain loyal to you.
Detractors (score between zero and six)
These are unhappy customers who could damage your brand through negative feedback and word of mouth.
3. Calculating your NPS
NPS scale works on -100 to 100, with -100 being the worst and 100 being the best possible score.
To work out your score, you need to deduct the percentage of detractors from the percentage of promoters. Passives count towards the total number of respondents, which means they detract from both the promoters and detractors equally. If all of your respondents were passives, your NPS score would be 0.
You can try for yourself with our NPS feature.
I’ve calculated my NPS score. Now what?
1. Create a plan to maintain or improve your score
What is really important when you calculate NPS is to use business insights to best understand the score and how to improve it. Sifting through additional comments to identify individual issues, as well as common product and/or service themes, can provide immediate areas for attention, but you should address anything that reoccurs regularly as a priority to help you improve your service.
2. Use NPS to inform business decisions
You should also use NPS to help inform forecasting and growth policy. You can make business decisions using your NPS score to inform growth, such as service improvement, tech, marketing communications, and financial policy. You can also reduce churn through the proactive management of NPS, helping to retain customers and even convert passive customers to promoters.
3. Keep your customers informed
It’s also important to communicate changes and improvements made as a result of your NPS. Letting your customers know about key business decisions shows a real dedication to customer care and could even result in new clients. Don’t be afraid to apologise or admit that your business got something wrong — but always explain how you are listening to your customers’ advice and making things better.
Five ways to improve your NPS survey
It’s important to maintain a balance between creating an engaging NPS campaign and collecting relevant insights.
Here are five ways you can improve the quality of the data you get from your NPS surveys:
1. Ask relevant questions that are specific to what you want to find out
After a customer rates you, you'll have more chances to focus on the specifics of their experience. Ask questions like:
- How easy was it to find the product you were looking for?
- Which of our features did you like the most?
- What made you buy from us today?
You need to get as much value out of this as possible to make it useful for the customer as well. Obtaining a full picture of your customer experience will show you exactly which areas you need to improve on and how you can continue providing customers with service they are happy with.
2. Keep it short
You need to keep your questions short and to the point. Make sure that your rating scales are not too vast and confusing: keep your scale between 0-5 or 0-10.
Stick to two or three questions for your survey. One of the first things a customer will do when asked to complete a survey, is check how long it will take them. Be respectful of your customers’ time: stick to a survey that takes only a couple of minutes.
3. Consider the design
If you are incorporating your NPS survey into an email newsletter or webpage, you need to make sure that it fits in with the overall theme and other aesthetic elements on the page.
Some scales are colour coded from red to green to indicate satisfaction levels. Others are monochrome to go with a simpler and contemporary design. You can even use emoticons to indicate the customer’s feelings. A happy smile, for example, can represent high levels of satisfaction, while an unhappy face indicates unsatisfactory service.
4. Leave space for additional comments
A scale rating only expresses part of what the customer feels, so use comment boxes too. Keep questions brief while providing the customer with extra space for them to expand their thoughts.
Comment boxes can offer deeper insights into your customer’s sentiment, motivation, and future plans, especially when they give negative scores. It's important to source qualitative data to complement your quantitative data if you want to learn what you need to work on.
5. Incorporate reviews
People are more likely to engage with customer reviews that are integrated with your NPS survey after having tried your product or service.
Keep track of which customers completed a transaction successfully and then ask them to leave a detailed review in exchange for a discount on future purchases or a referral code. That way, you’ll convince some of your more passive customers to spread the word about your brand.
Start measuring your Net Promoter Score
At Feefo it’s easy to make NPS an important part of your customer feedback journey.
With Feefo you can:
- Collect NPS through surveys and reviews
- Track your score over time
- Track scores by salesperson, product, service, and more
- Set up alerts based on scores
To find out more about what our NPS tool can do for you, get in touch with our friendly team today.
