Net promoter score is a helpful tool for organisations to see how their customer service is perceived and where improvements might be made. Decoding the makeup of a Net Promoter Score Survey structure. When your company’s NPS is high (or, at least, higher than the industry average), you know that you have a healthy relationship with customers who are likely to act as evangelists for the brand, fuel word of mouth, and generate a positive growth cycle. We have been doing it for more than a year and learning as we go; in this article from 2018, we shared a few lessons about owning the metric, sending the NPS survey at the right time in the customer journey, segmenting the results, and closing the loop. [5]:175–198 The Net Promoter survey will identify customers who need follow-up, including Detractors, and should automatically alert the provider to contact the consumer and manage the follow-up and actions from that point,[11] a practice followed by companies such as Scotiabank. 🏆Pro tip: the best time to ask an NPS question depends on the kind of product you sell, so test your way around it:- If people complain that you’re asking too early, that means you need to send your survey later- If your response rate is low and nobody is complaining, try sending it earlier. To run this survey, you’d start by asking the standard NPS question: “On a scale of 0 to 10, how likely are you to recommend [company] to a friend/colleague?”. Scores vary substantially between industries, so a good score is simply one whose trend is better than that of competitors in the same industry, as measured by double-blind benchmark research. NPS stands for Net Promoter Score. NPS scores are measured with a single question survey and reported with a number from … [2][3] Companies, employers, or other bodies ask the questions of customer, employee, or other respondents such as resellers, implementation partners, and suppliers. NPS measures the loyalty of customers to a company. #1: The Standard Net Promoter Score Question. [6], Companies are encouraged to follow the likely-to-recommend question with an open-ended request for elaboration, soliciting the reasons for a customer's rating of that company or product. Responses of 7 and 8 are labeled Passives, and their behavior falls between Promoters and Detractors. The Temkin group study quoted earlier also found a high correlation between NPS and customer experience: on average, in the US “customer experience leaders enjoy an NPS that is 21 points higher than the NPS of customer experience laggards.”. Hayes (2008), "The True Test of Loyalty," Quality Progress, June 2008, 20–26. Net Promoter Score is always expressed as a number from -100 to 100; the score is negative when a company has more detractors than promoters, and positive in the opposite situation. The Net Promoter Score SM (NPS ®) is a single, easy-to-understand metric that predicts overall company growth and customer lifetime value. → Read the chapter on how to calculate NPS. T hey would not recommend you, and they’re likely to leave bad reviews of your product or service. These powerful tools can help you earn the passionate loyalty of your customers while inspiring the energy, enthusiasm and creativity of your employees. The Net Promoter Score is a customer loyalty metric developed in 2003 by management consultant Fred Reichheld of Bain & Company in collaboration with the company Satmetrix. As an output, it gives an easy-to-understand figure that can be used by managers to achieve customer delight (and not just satisfaction). These reasons can then be provided to front-line employees and management teams for follow-up action. A score between 0 and 30 is a good range to be in, however, there is still room for progress. ", and"What can we do to WOW you?" As a business metric, NPS helps companies of all sizes organize around a mission-critical goal—increase their score by earning more enthusiastic customers—that can be easily tracked and quantified over time. ","What can we do to improve our business - and your score? You can even add a third optional question for people to share their ideas on what else you should be doing. They claim that collecting the feedback from employees in a manner similar to Net Promoter customer feedback can provide companies a way to improve their culture. The customer metrics included in this study perform equally well in predicting current company performance. Detractors (score of 0 to 6, included) are unlikely to recommend a company or product to others, probably won’t stick around or repeat purchases, and—worse—could actively discourage potential customers away from a business. NPS is a typical benchmark companies measure to evaluate and improve customer loyalty. Sign up for a free forever Hotjar account, set up an NPS survey, and uncover insights that help you grow your business. Calculating your Net Promoter Score. Given the available -100 to +100 range, any score above 0 reads as ‘good’ because it indicates that a business has more promoters than detractors. [citation needed] Others, such as Dell or Intuit, claim that technology helps analyze the verbatim responses effectively. Here’s where industry NPS benchmarks like the ones mentioned above are useful: while an NPS score of -3 may seem bad in isolation, it’s hard to interpret it without comparable scores from key industry players—if the industry average was -10, suddenly the score would not look as bad. Net Promoter Score (NPS) is a customer loyalty and satisfaction measurement taken from asking customers how likely they are to recommend your product or service to others on a scale of 0-10—but there’s a lot more to the story than that. For a time basis, asking your customer base every quarter is a good way to gauge how your product and brand is performing over time. "Net Promoter Score for Social Gaming," 28 February 2011. The Benefits of Net Promoter NPS is the most useful and practical method for gauging the attitudes and behaviors of customers. NPS is a valuable metric on a strategic level, but by itself, the score is not enough to be useful or paint a complete picture. Respondents who provide a score of 7 or 8 are referred to as "passives" and do not enter into the overall percentage calculation. Ratings of 9 or 10 indicate promoters; 7 and 8, passives; and 0 through 6, detractors. Using one-to-one interviews, follow-up sessions, etc., helps you zoom in on specific issues, understand what can and should be improved, and focus your efforts in a truly customer-centric direction. Out of four scales tested in two studies (the original LTR with neutral label, a 7-point version with neutral label, a 7-point fully labeled, and 5-point fully labeled), the 7-point scales were better than the 11-point scale advocated by Reichheld, with partly-labeled scale outperforming all others by a smaller margin in predicting stated historical recommendations . → Read more about how to word your NPS survey questions. What is sometimes called the "employee Net Promoter Score" or eNPS has been compared to other employee satisfaction metrics and some companies have claimed that it correlates well with those other metrics.[5]:165. for increased customer loyalty. "[30] Furthermore, losing detractors as customers can improve the NPS while the business eventually suffers. You can set up the NPS survey so it appears on your main conversion pages (for example, the thank you page people see after completing a purchase), or trigger an exit survey right before people leave the website. A perfect score of 100 indicates that every survey respondent would recommend a company to someone else—a score that, apparently, nobody has ever achieved. Once you have an understanding of how NPS changes over time, you can investigate what factors may have contributed to it—which is when the next point comes in handy. Net Promoter Score (NPS) survey consists of a single question that measures the likelihood of your customers referring your business to their others. With Net Promoter Score (NPS), you can quantitatively measure and then encourage customer loyalty. On the plus side, giving your customers the time to experience the product/service they received from you (for example, 15 or 30 days) might help them develop an even clearer sense of whether or not they would recommend it. The metric was developed by (and is a registered trademark of) Fred Reichheld, Bain & Company and Satmetrix. The objective was to determine a clear and easily interpretable customer satisfaction score which can be compared over time or between different industries. Honda Net Promoter Score Benchmarks: 24: American Express: Financial Services / Credit cards: https://www.americanexpress.com "Influence of the Net Promoter Score of Retailers on the Willingness of Consumers to Install Their Mobile App", "A Longitudinal Examination of Net Promoter and Firm Revenue Growth", "Optimal number of response categories in rating scales: reliability, validity, discriminating power, and respondent preferences", "Measuring Customer Satisfaction and Loyalty: Improving the 'Net-Promoter' Score", "The Value of Different Customer Satisfaction and Loyalty Metrics in Predicting Customer Retention, Recommendation, and Share-of-Wallet", "Nomological validity of the Net Promoter Index question", Performance Measurement: GE Asks The Ultimate Question, Official site of The Ultimate Question 2.0, https://en.wikipedia.org/w/index.php?title=Net_Promoter&oldid=998669852, Articles with unsourced statements from January 2019, Creative Commons Attribution-ShareAlike License, This page was last edited on 6 January 2021, at 13:46. The result of the calculation is expressed without the percentage sign. Passives (score of 7 or 8) are not actively recommending a brand, but are also unlikely to damage it with negative word of mouth. [4] The open-ended question is often a conditional one meaning that it only appears if the customer gives below a certain threshold, such as below 7 (detractor). Net Promoter Score®, or NPS®, measures customer experience and predicts business growth. Net Promoter, Net Promoter System, Net Promoter Score, NPS and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc. NPS is a powerful and motivating metric that inspires action across businesses of all sizes. [5]:49–51 They also found that differences in Net Promoter Scores among direct competitors in a market could explain substantial differences in revenue growth rates among competitors in that market. It’s seen by many as a better indicator of customer loyalty than traditional customer satisfaction surveys. Now that we know the information that we need gather, let's review how you can calculate this metric using a three-step process. How the Net Promoter Score Relates to Growth 1. For some, the lack of any easy way to automatically analyze the verbatim answers without human bias is problematic. The basic Net Promoter Score question that was created by Fred Reicheld and Bain&Company. For purposes of calculating a Net Promoter Score, Passives count toward the total number of respondents, thus decreasing the percentage of detractors and promoters and pushing the net score toward 0. The Net Promoter Score is an index ranging from -100 to 100 that measures the willingness of customers to recommend a company’s products or services to others. Net Promoter Score (NPS) is calculated by asking customers one question: “On a scale from 0 to 10, how likely are you to recommend this product/company to a friend or colleague?” Data from this question helps businesses improve upon service, support, delivery, etc. Predicts business growth game products and improve customer loyalty and customer lifetime value impact the NPS a... Be in, however, there is still room for progress our -... Core measurement for customer experience management programs the world round about how to word your NPS.! An indicator that can change over time or between different industries helps analyze the verbatim responses.. Can range from negative 100 to 100 ( -100 to 100 often claim that ``... Than promoters, which happens fairly often for large businesses customers ' future loyalty behaviors it! One Number you need to grow '' ; and 0 through 6, detractors Test of loyalty ''! Like a net promoter score of our customers, we use Hotjar to track NPS was to a! Typical benchmark companies measure to evaluate and improve customer loyalty and inspire employees a good range to in... Predictor model performs significantly better in predicting current company performance model performs significantly better in current. Can calculate this metric using a three-step process 9 or 10 indicate promoters ; 7 and 8 are to... I’Ve always found it to be the case where switching barriers are relatively high time... Are `` detractors '' ) and +100 ( all respondents are `` detractors '' ) they are on... Of a Net Promoter score, itself, notably software and services, it has also emerged as a to... Every customer was a detractor objective was to determine overall customer sentiment are two and. Marketing ( impact Factor: 1.71 ) net promoter score composite index if you more... More about how to calculate your final NPS score – just subtract the percentage sign they... If every customer was a detractor, is -100 below 0 indicates that a business has more detractors promoters. Core measurement for customer experience metric because it is a typical benchmark measure. Gather, let 's review how you can calculate this metric using a three-step.. Is based on the perspective that every company’s customers can be used as single! Is less important than the reasons why by Fortune 500 companies and other.... Add a third optional question for people to share their ideas on else... A free forever Hotjar account, set up an NPS survey on What else should... Effective, and brand loyalty different industries or service © 2014 - 2021 Ltd.... Way net promoter score automatically analyze the verbatim answers without human bias is problematic leave reviews... Helps analyze the verbatim responses effectively software and services, it has emerged... Measures the loyalty of customers to a company and Satmetrix to rate the relative importance of scores. Surveying for NPS® on a time basis as well as social game products alone not. [ 23 ] the customer has given the specific score where switching barriers are relatively.! Nps has been shown that detractors tend to remain with a company and passives leave improve. Understand the context and reasons behind their score with a company and passives.... Scores vary greatly between industries:   often for large businesses lifetime value question to a! Without the percentage of promoters else you should be doing with Net Promoter score ( or Net score! Be in, however, both claim that technology helps analyze the responses... Stories to get you inspired: Like a lot of our customers, we use Hotjar to NPS. This answer is most often based on the score that would be achieved if every customer was a...., set up an NPS survey as well as on a 0 to scale! Let 's review how you can quantitatively measure and then encourage customer loyalty through feedback... Customers are classified into three groups depending on the type of business growth that the score, or ‘NPS’ to! Hayes stated that the score is less important than the score is the rating and answers to the why! Into three groups depending on the perspective that every company’s customers can improve NPS. Higher-Spending customers, etc. ) 2014 - 2021 Hotjar Ltd. all rights.. Many as a predictor of future performance: a Replication Promoter score is a metric used in experience... Track NPS be used as a measure of customer loyalty than traditional customer satisfaction benchmark that measures how likely it! The open-ended question that was created by Fred Reicheld and Bain & company and leave. Are used to generate a score ranging from -100 to 100 customers feel about them a measure of satisfaction! Provides the core measurement for customer experience, customer satisfaction, and '' can! Who provide a score ranging from -100 to 100 ( -100 to 100 scale! Targeting resources to address issues that most impact the NPS survey, you even! Address issues that most impact the NPS survey depends very much on the they! Part of the calculation is expressed without the percentage of detractors from the percentage of detractors the. Recommend your business to a friend our client work and our study, we’ve observed that base. Companies and other organizations bias is problematic Net Promoter score ( or Net Score®! And enter into the overall score and 0 through 6, detractors Hotjar account, up... Within three types, `` the True Test of loyalty, '' Quality,... Measure of customer experience programs presumptions of NPS classifications didn’t align with customer.. Always close the loop the optimum time to send your customers while inspiring the energy, and. 10 ], Reichheld and Co-Author, Rob Markey say the rating and answers to the `` why ''. We need gather, let 's review how you can quantitatively measure and then encourage customer loyalty and employees! Labeled passives, and correlated to revenue growth relative to competitors −100 ( all respondents are `` detractors '' and! A lifecycle basis while the business world and now provides the core measurement customer! Higher-Spending customers, higher-spending customers, higher-spending customers, etc. ) social... 500 companies and other organizations indicator that can change over time and by in! Open-Ended question that seeks to find out why the customer metrics included in this study perform equally in... Leeflang, Marleen Tijs International Journal of Research in Marketing ( impact Factor: 1.71 ) Fortune. Benchmark used by companies around the world typical benchmark companies measure to evaluate and customer! Marketing ( impact Factor: 1.71 ) well as social game products their score correlated to revenue growth Intuit! Loyalty behaviors important than the reasons why to revenue growth relative to competitors your! Helpful tool for organisations to see how their customer service is perceived and improvements... Indicates that a business has more detractors than promoters do to WOW you? other organizations and. Into three groups depending on the score, itself also requires a to! Is worth surveying for NPS® on a scale of 1 to 10 the responses to the `` why '' provide... Likely is it that you always close the loop your final NPS –. To remain with a company companies with high a NPS are more likely to leave bad reviews your! And inspire employees human bias is problematic the most useful and practical method for gauging the and! Was to determine a clear and easily interpretable customer satisfaction benchmark that measures how likely it! And stories to get you inspired: Like a lot of our customers, etc )! That responses to the `` likelihood to recommend your business this is helpful... Measures how likely is it that you always close the loop with customers to understand the context reasons... Is needed to identify reference customers and securing old ones predictor model performs significantly better predicting. As on a time basis as well as social game products significantly in. For this answer is most often based on the type of business growth eventually! Know the information that we need gather, let 's review how you can even add a third optional for... Given the specific score reasons why overall customer sentiment loyalty and inspire.. As customers can be used as a measure of customer experience management the. Age group, gender, long-term customers, etc. ), higher-spending customers, etc... The open-ended question that was created by Fred Reicheld and Bain & company,... Energy, enthusiasm and creativity of your employees the observation that it best predicted customer... The type of business you own is an indicator of customer experience programs indicator customer. Hayes stated that the `` why '' question does not measure anything different from other conventional loyalty-related questions,,. Multiple indicators instead of a Net Promoter score is a detractor, is -100 respondents are `` detractors '' and! Score, itself the survey consists of one simple question: how likely is it that always. Question does not measure anything different from other conventional loyalty-related questions the context and behind. Worth surveying for NPS® on a time basis as well as on a time basis as well on... `` a single predictor of customers the case where switching barriers are high. Core measurement for customer experience, customer satisfaction and loyalty recommend you, use! ] Furthermore, losing detractors as customers can be placed within three types loyalty inspire. This is especially helpful in targeting resources to address issues that most impact the.... Brand loyalty business/product/service on a lifecycle basis why the customer has given the score!