The NPS has been a key indicator of customer satisfaction for almost 20 years. It helps us know easily if our clients are willing to recommend us and why. Whether you already use it in your company or not, we will give you all the keys to know how and interpret the results!
What is the NPS?
The NPS, Net Promoter Score, is one of the most used tools to measure customer satisfaction.
It first appeared in 2003 from a research about customer retention by Fred Reichheld, an American author and consultant. He published an article in the Harvard Business Review: The One Number You Need To Grow in which he explains the interest of this indicator.
Since then, the NPS has become one of the best tools for companies looking to fulfill all their consumers’ needs! In fact, according to Fortune in 2020, two thirds of the Fortune 1000 companies (the ranking of the largest American companies) were already using the Net Promoter Score!
How does it work?
Concretely, the NPS is based on two questions : the first one measure the customer satisfaction quantitatively, and the second one qualitatively.
“How likely are you to recommend this product (or service) to a friend ?”. The customer answers this question by rating the company’s product or service on a scale from 0 to 10. 0 meaning that it is unlikely that the customer will recommend you, and 10 meaning that it is very likely!
This rating allows you to classify your clients into three categories : detractors, passives and promoters. If they gave you a score of 0 to 6, then they are detractors, 7 to 8 they are considered passive and 9 to 10 are promoters.
The second question gives you a much clearer picture of why your customer is satisfied or not. You will ask them the question “Why?” to invite them to justify their vote. This will enable you to understand the rating the customer gave you and act accordingly. You will be able to understand what makes your customers happy and set up actions that will help turn your unsatisfied customers into ambassadors!
To calculate it, two schools of thoughts are opposed and equal! Choose the method that suits you best:
For the first one, we have to consider that the vote of each detractor equals -1, the vote of passives equals 0 and promoters are +1. Then, we can add the number of detractors to the number of promoters. The formula would be:
NPS = (Number of promoters x 1) + (Number of detractors x (-1))
For example, if you have 100 voters of which 20 are detractors, 25 are passives and 55 are promoters, then you would have an NPS score of +35.
NPS = (55 x 1) + (0 x 25) + (20 x (- 1)) = 55 – 0 – 20 = +35
Some will prefer the second option where you simply subtract the percentage of detractors from the percentage of promoters.
NPS = % promoters – % detractors
Here : NPS = 55 % – 20 % = 35
Be careful though, the NPS is not expressed in percentages! It is a value situated on a scale from -100 to +100.
Taking into consideration this scale from -100 to +100, an NPS higher than 0 is considered as a good score since it means that a majority of your customers are satisfied. On the contrary, if you get a score below 0, you need to refocus your attention on customer satisfaction.
According to universal norms for the NPS, a score of 50 and more is considered as excellent and over 70 you are one of the most customer centric companies.
Please note that the way we rate can vary from country to country, which is why an NPS of +50 is excellent in the US but +40 is considered excellent in Europe!
Your detractors, customers that gave you a score between 0 to 6, are the risky category for your company. Indeed, if you do not act to change their minds, they are likely to tell their friends about you… Except that it won’t be to promote your brand but to advise against it!
To avoid this situation, you have to build a relationship based on trust with them.
What do we advise you to do? In the first place, call them! That is the best way to establish contact directly with them and understand what they didn’t appreciate. As you expect, sympathy and listening must be the core of your exchange for it to work! Then, of course, you can send them a marketing advantage to match their expectations and give them a positive experience on your website or in your shop. What can also work very well is to involve them in the development or testing of a new product.
Let’s say your customer has been disappointed with the drill he bought from your brand and you are planning to launch an improved version. Then you can base these improvements on your customers’ feedback and invite him to become a test customer. This will show them that their opinion counts! You will see that they will feel truly valued by your brand.
The passives ones rate you between 7 and 8. This score is obviously not dramatic, but it shows that some of your customers are not convinced enough to promote you themselves. This type of customers represents a risk because they could very well consume your competitors’ products or services.
You will have to convince them that you are the best ! For this, you have to exceed expectations they had when they became customers. You can, for example, offer additional services to help enrich their experience, support, benefits and also advice. The little bonus that can make a difference? Offer them a gift that completes the use of the product they bought!
Finally, the promoters are those who gave you a 9 or a 10, your ambassadors. They are the most fervent supporters of your brand! Since they are satisfied, they will still buy your products or services down the road and apparently, they are also ready to promote you!
Therefore, you must maintain the relationship based on trust that exists between you and your promoters, so that they will always want to promote you. VIP status, sponsorship, exclusive offers, private parties, are all actions that will help you achieve this.
First of all, you should not take NPS for granted after one campaign! You must regularly ask your customers to analyze the score evolution. Indeed, one NPS does not mean much since it will not give you an overview of your customers’ satisfaction over time.
That’s why we advise you to submit a NPS survey to your customers regularly. Moreover, a good or a bad score alone loses its meaning : what really counts is the progression of this score (meaning that the number of your ambassador customers is increasing). This progression is the sign that you have more and more ambassadors to help you recruit new customers for your brand!
We advise you to send a concise form at a strategic moment. Don’t forget that the timing of the satisfaction survey is crucial for your customers to respond! But be careful, depending on what you want to measure, you will not submit the survey at the same time. For example, do you want to measure customer satisfaction of a subscription? You can wait a year, or a purchasing process? Submit the questionnaire at the end of the journey, a home appliance? You can do it after two weeks, etc.
As you can understand, NPS can be a key tool for your company to measure customer satisfaction over time and adapt your actions. Don’t forget that the regularity of NPS surveys is the whole point of this tool! It can even help you improve your brand image if you communicate the results externally.
At Click2Buy, we have been using this tool for over a year now, by regularly submitting the survey to our customers. Since then, we have gained a clearer picture of our customers’ perception of our company and are able to better understand their expectations!
The whole team is proud to have obtained the very good score of +42! We wanted to thank our customers for their trust and their encouraging feedback! We will continue to develop our service to fulfill your needs.
COO & Data Protection Officer
“At Click2Buy, the NPS allows us to take the pulse of our customers in a simple, quick and efficient way. We try to send it out regularly but in order to refine the score we will probably expand it and allow customers to fill it in whenever they want! The NPS is a way for us to anticipate potential churn.”