If there is one metric that gives you a great overview of your customers’ opinions, it is the Net Promoter Score.
This blog introduces you to the principles of NPS and gives you actionable tips on making the most out of it.
Table of Contents
What Is Net Promoter Score?
Net Promoter Score is a rating system that reflects customer satisfaction and loyalty.
It is one of the most popular ways to collect customer feedback.
In an NPS survey, a customer is presented with the question “How likely are you to recommend [company] to your friends and family?”
The respondent gives their answer on a scale of 0-10.
Based on the score, the respondents are divided into three groups:
- Promoters give a score of 9 or 10.
- Passives give a score of 7 or 8.
- Detractors give a score of 0-6.
Promoters are satisfied and loyal customers. They have stated a willingness to recommend your company.
Passives are also relatively satisfied with the company. However, there is still room for improvement.
Detractors are unhappy customers, who might churn if you do nothing about it.
Later in this article, you will learn what to do with each type of customer.
The final Net Promoter Score is reported with one number between -100 and 100.
It is calculated by subtracting the percentage of Detractors from the percentage of Promoters. Passives are neutral in the equation.
For example, if 40% of your customers were Promoters and another 40% were Detractors, leaving 20% Passives, your score would be 0.
Is Your NPS Result Good or Bad?
How do you know what is a good NPS result? When can you tap yourself on the back for great work on CX, and when should you get a wake-up call to improve it?
Anything above 0 means that you have more happy customers than unhappy customers. Of course, the closer to the full 100 you get, the better.
However, NPS benchmarks look different for each industry.
B2B marketing companies, for example, have an average NPS of 28 according to Survicate’s research. If your NPS is above 50, you are among the best performers.
Some other average Net Promoter Score results per industry:
- Retail: 48
- Software: 32
- IT: 23
- E-commerce: 37
As a general rule, the Survicate research data shows that
- A score under 0 is a bad score. Plain and simple.
- 0-30 is good.
- 30-70 is great.
- Above 70 means you are doing excellent!
Benefits of Net Promoter Score
Let’s see what are the benefits of using NPS for measuring customer loyalty and satisfaction.
It’s Short and Easy
An NPS survey consists of one quick-to-answer question, and perhaps another open-ended question.
It’s easy for the customer to simply click on a number to rate the company.
The easiness and shortness result in a high completion rate. It’s unlikely that the respondent would not submit their answer after starting the survey.
The formulation of the question puts the customer in the spotlight.
“How likely are you to recommend us? What is your opinion?”
People like to talk about themselves and feel more intrigued to answer a question that puts them first.
Contrast this perspective with the following questions:
- How is the company performing?
- How well did the company succeed today?
- How is the product or service?
There is a clear difference between customer-centric and company-centric perspectives.
Simple to Interpret and Track
Because the results are reported with one number, it is very easy to interpret, benchmark, and track your performance over time.
If you contrast NPS with other types of feedback surveys, you will notice that few other metrics are as simple.
You can track the overall NPS with a simple line chart, or make pie charts out of the three customer satisfaction categories.
Identify Churn Danger and Loss of Reputation
NPS helps you identify which customers are like to churn or even bad-mouth you in the future.
If someone states that they would absolutely not want to recommend your company, they have some heavy reasons.
On the other hand, you also get to identify the greatest supporters of your company.
Some Drawbacks of NPS and How to Fix Them
Like everything in the world, even NPS comes with its cons.
Here are some risks that you run when using NPS.
But worry not – there are solutions.
Overthinking the Question
Maybe you will think I am a bit silly when I tell you this.
When I was younger, I remember giving a lower score on a Net Promoter Score survey because I took the question quite literally.
“How likely are you to recommend this event to your friends?”
I was too stuck on the “friends” part. The event in question was something that my friends would not enjoy. For that reason, I couldn’t give a high score although my own opinion was positive
Of course, nowadays I know not to take the question as literally.
But there surely are people who will.
There are solutions for avoiding this particular problem.
- Choose the right group of people to mention in the question. For B2B brands, it could be “colleagues”. It depends on what you want to know, too.
- Just leave out the part that refers to any specific group.
On the other hand, the event organizers might have learned something about their target audience through my response.
If they had collected some demographic information about me, they would be able to draw conclusions about my reference group. Then, they could see that maybe my peers are not the central audience for them.
NPS and Cultural Differences
There is some evidence that culture affects NPS results.
For example, European and Japanese customers give lower satisfaction scores compared to their counterparts in the Middle East, the U.S., and Latin America.
Based on general life experience, many people would agree with the result.
To name an example, Americans are often less reserved and more enthusiastic than Europeans. It would make sense that they give higher scores as well.
It has even been proposed that there should be an EU version of the NPS, in which the Promoter section is broadened to include score 8.
There are even differences between the different parts of the U.S. Turns out that Southerners are more likely to give a higher score, while those in the West are more critical.
Another reason for different NPS results is different regional standards and expectations.
When companies become international and begin to operate in new countries, they might overlook some cultural differences and standards. This results in lower customer satisfaction.
So, if your international company has different NPS results in different countries, you should consider at least two things:
- You might get slightly lower scores in some countries even if the customer experience is good. Your customers just express their satisfaction on a different level.
- Your customers might be unhappy with you because you don’t comply with cultural norms. Look into it to find out if you could change something.
12 Best Practices for NPS
It’s time for the juiciest part.
Take notes of these 12 NPS best practices and become an NPS wiz.
1. Collect Regular Feedback and Automate the Process
If you want to visualize your long-term development, you must conduct regular NPS surveys.
For example, a quarterly questionnaire for each customer is a good idea.
If you have longer customer relationships that span over several months or years, NPS helps with customer relationship management.
Many NPS tools are integrable with CRM systems, which helps you transfer data between the two and bring Customer Success to a new level.
Does it sound like a tedious task to send out a survey several times a year?
Creating automation for NPS surveys is a small task that has a great effect.
2. Formulate A Persuasive Message
NPS is quick and easy, and once someone starts the survey, they will likely complete it.
The key is to get the customer to start the survey in the first place.
You need to write a great invitation and persuade customers to give feedback.
Use arguments like
- It is easy to fill in the survey
- It only takes a moment
- The customer’s opinion is valuable
- They can help future customers by giving feedback
The more personal the request seems the more likely customers will take time to give feedback.
If possible, make the request as an individual rather than as a company.
People are much more likely to help a person than a corporation.
3. Use Transactional and Relationship NPS
Depending on the timing of your surveys, you can get quite different answers.
Transactional NPS surveys are triggered by certain actions in an app or on a website.
The answer is based on the feeling that the customer has at that moment. If the action they are doing is going well, they will likely give a higher rating.
On the other hand, if the customer is currently frustrated, you will get fiery feedback on how this feature sucks.
It is of course a good thing, as you will learn valuable customer insights and have an opportunity to fix the issue.
Another option is a relationship NPS survey, which is sent out to your long-term customers at regular intervals.
When you send an email at a random time, your customer will answer more based on the overall impression. This is also important information.
Both ways to send NPS surveys have their pros and cons. Combined, they can provide you with a 360 view of the customer experience.
You just need to be mindful and take the timing into account when analyzing results.
4. Analyze Responses on A Deeper Level
Although the greatest benefit of NPS is that it gives you one number to track, it’s not enough.
If you want to reach deeper insights, you must analyze individual responses, their development, and distribution.
Is there a lot of polarization in the responses? Why?
How is your response rate doing?
Are there regional or other demographic differences?
You should especially look into the distribution of scores within Detractors.
Even though Detractors are categorized as one group, there is a broad scope of them between scores of 0-6.
Those who give a 0 or 1 are significantly more dissatisfied than those who give a 5 or 6.
5. Pair with Personalized Open-Ended Questions
To learn why your customers feel a certain way, you need open feedback.
A simple “Why did you choose this score?” will do the trick.
However, you can create rules and conditions to personalize the feedback survey according to the customer’s rating.
Here are some examples of open-ended questions:
- For Detractors: “What things are you dissatisfied with? How could we improve the situation for you? What should we do differently? How could we make your experience better?”
- For Passives: “How could we improve our services? What could we do to make you more satisfied with our service?”
- For Promoters: “What makes you give a high score? Is there something we could do even better?”
According to your own brand voice, you can get even more creative with the questions.
After all, contemporary consumers value personalized content. It will in itself improve the customer experience.
6. Segment Responses
When you have some demographic information about the respondents, it allows you to segment the results.
You could find out that people of some age, profession, or nationality are more likely to be satisfied. It might lead you further into your ideal customer profile and segment.
But beware of question overload.
If you start asking too many questions, you will defeat one of the greatest advantages of NPS: shortness and easiness.
7. Acknowledge and React
React to feedback, especially when it is negative. This is crucial for brands that have longer relationships with their customers.
Turning an unhappy customer into a loyal one starts with acknowledging their opinions.
Contact your Detractors personally to ask for more information. Come up with solutions to make them happier.
This alone shows that you are ready to serve your customers in the best way possible.
8. Take Action
In case someone didn’t get the memo: asking for feedback is one thing, but taking action on it makes the real difference.
If you see your score decreasing over time, you know something is wrong.
Pay attention to open-ended questions. If something comes up continuously in your clients’ comments, take it seriously.
Moreover, take time to save your Detractors from churning. You still have a chance to turn a hater into a fan if you do things right.
Learn to notice opportunities, but also recognize that you can’t save everyone.
Should you even try to turn around someone who gives you a 0? Probably not.
It might be wiser to focus on those in the upper end of the Detractor scope. Those who you can still save.
9. Let Your Promoters Promote
The premise of NPS is to ask for willingness to recommend.
When someone implies that they are willing to recommend, let them do so! People are likely to follow through with the behavior that they have established.
Let your promoters recommend your company by leaving a testimonial.
Provide your happy customer with a chance to easily give an endorsement and add the testimonial request to the NPS survey.
It saves time for you and your customer.
10. Track Results Long-Term
If you start collecting regular NPS feedback now, you will thank yourself in a couple of years.
What could be more satisfying than seeing the line chart in steady growth? With one glance, you get to see all the development you have done.
On the other hand, as your business grows, you might be over the moon about success and become blind to details. It can be more and more difficult to have a sense of overall customer satisfaction. You might be in the dark about the real situation.
In this case, having NPS records is a lifesaver. It lays out the current trends, be they positive or negative.
11. Benchmark Against Direct Competitors
As we discussed before, the average NPS results differ greatly between industries. The location might also affect it.
Thus, don’t make unnecessary comparisons with other companies’ NPS results.
NPS is best used when evaluating your own development.
If you want to see how you are doing compared to others, only benchmark against direct competitors.
Those are companies that work in the same industry, have a similar business model, and operate in the same area.
12. Make It Everyone’s Business
NPS should be made a priority for every department of the business.
All teams should care about NPS and how to improve it.
Tell your colleagues what NPS is, why you measure it, and why you care about the results.
Don’t forget to share the results with everyone in the company. It is a great way to either explain the need for improvement or celebrate your success.
Net Promoter Score is a great tool for measuring overall customer satisfaction and loyalty.
An NPS survey is quick and easy to answer, it puts the customer first, the results are easy to interpret and track over time, and NPS helps you identify your advocates and haters.
Like everything else, NPS is not a perfect metric. The perspective might be confusing for some customers, and the results are relative to many factors, such as your industry or location.
The board introduced 12 best practices for NPS, which are:
- Collect regular feedback and automate the process.
- Formulate a persuasive message that invites people to open the survey.
- Use transactional and relationship NPS to gain perspective on the whole customer journey.
- Analyze responses on a deeper level, such as the distribution of scores and which factors might have contributed to the feedback round.
- Pair the NPS question with an open-ended question and personalize it to fit the given rating.
- Segment responses based on demographic information.
- Acknowledge your customers’ opinions and react to feedback, especially when it is negative.
- Take action based on feedback to develop your business.
- Let your promoters promote you by leaving customer testimonials.
- Track your results long-term to notice trends and see your overall development.
- Benchmark mainly against yourself, but also to the direct competitors.
- Make sure that everyone in your company understands the importance of NPS.
Take this information with you when you plan your NPS strategy.