NPS (Net Promoter Score)

Today’s buyers have endless purchasing options, so all businesses, no matter the product or service they sell, must leverage their customer experience to its fullest.

Customers satisfied with the products, services, and overall customer experience you provide are far more inclined to remain loyal to your brand. They’re also less likely to choose another company over yours based on factors like pricing. Indeed, studies consistently show that people are willing to pay more for a strong, positive brand that offers an exceptional customer journey.

Measuring customer experience is crucial to providing value and reducing churn. The net promoter score or NPS is one customer loyalty measurement that helps you do just that. While it doesn’t predict customer behavior, NPS does give your customer experience team critical insights into how your brand is managing its customer journey.

This glossary covers some of the most common terms used in calculating NPS. It should help you increase retention and referral rates which, in turn, leads to more profitable growth.

Net Promoter Score

NPS is a customer loyalty and satisfaction measurement reached by asking customers one simple question: "How likely are you to recommend our product or service to others on a scale of zero to ten?" Some businesses refer to it as a client promoter score.

Net Promoter Score Question

Any variation of a query that asks customers: “On a scale of 0-10, how likely are you to recommend our business to a friend, family member, or colleague?” The NPS score question is short, sweet, and designed to quickly capture a customer’s satisfaction with your company. Though simple in nature, its benefits are considerable, as it establishes customer communications and offers insight into departmental issues you might not otherwise be aware of.

Net Promoter Score Formula

Customers giving your company a score of 6 or below are called “detractors;” those who choose a score of 7 or 8 or known as “passives;” ones who give a 9 or 10 are “promoters.” Promoters are likely to stay with your brand long-term, while detractors have the potential to damage it.

To calculate NPS, subtract the percentage of detractors from that of promoters:

50% promoters and 10% detractors equal an NPS of 40%

A “good” net promoter score is anything above 50, with 70 or more considered outstanding.

Net Promoter Score Survey

The true “goldmine” of NPS is in the data you gather by requesting additional customer information. NPS surveys use follow-up questions to your NPS question and help you:

• Gauge how customers feel about your company
• React to any negative feedback
• Set performance benchmarks

NPS surveys are relatively easy to create and typically include questions like “What is the main reason for your score?” “What can we do to ‘wow’ you?” and “What was missing or disappointing in your experience with us?”

Data Segments

Net promoter scores can vary based on distinct customer segments such as age group, gender, and customer history. Super-charging your NPS analysis with segmentation helps you determine how to adapt your approach to different types of customers.

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