The Net Promoter Score (NPS), developed by Fred Reichheld, is designed to measure the loyalty that exists between a provider and a consumer.
The provider can be a company, employer or any other entity and is the one asking the questions on the NPS survey.
The consumer is the customer, employee, or respondent to an NPS survey.
How do you conduct an NPS survey?
The good news it’s really simple.
It starts by just asking one question:
On a scale of 0-10, how likely are you to recommend <insert company> to a family or friend?
You can do that in-person, via an automated message after a conversation with a call centre, an email survey, a check-out form etc.
No matter method you use, the question is always the same.
How do you calculate NPS?
Just like asking one simple question was easy, so is calculating your score.
NPS breaks respondents into three groups:
- Promoters – these people scored you a 9 or a 10
- Passives – the people who scored you a 7 or 8
- Detractors – the people who scored you a 0 to 6
Now to calculate your score, firstly we need to say goodbye to the Passives.
That’s right, they are considered irrelevant in calculating your NPS.
So all we have left now is our Promoters (the people who love us) and the Detractors (the ones who, well you get the drift…).
To get your score, simply detract the percentage of Detractors from the percentage of Promoters.
So if 50% of your respondents were Promoters and 10% were Detractors, your NPS score is +40.
Just to clarify, the NPS score is not expressed as a percentage, rather as an absolute number in the above example.
For another scenario to make sure you’ve got it all sorted, let’s assume 20% were Promoters and 50% were detractors.
Your NPS score would be -30 (20% Promoters – 50% Detractors)
So the two extremes you can have are -100 (everyone is a detractor) or +100 (everyone is a Promoter).
Wasn’t that hard now was it?
Is NPS a good thing to implement?
Anytime a business is focussed on improving the customer experience is a good thing.
NPS is just one of many ways a business can tune into the customer’s perception of their brand.
There are certainly some flaws though with the NPS model but given this just a Glossary, we’ll suggest some links below where you can learn some more.
- Read the article on 9 Tips for implementing NPS
- Search for suppliers of Voice of the Customer technology or consultants that can help you with implementation in our Business Directory. Alternatively, use our free CX Connect service and we can help introduce you suppliers and consultants that are a best fit for your requirements saving you time, money and stress!