Net Promoter Score

What is a Net Promoter Score?

Net Promoter Score, or NPS, is one of the most important and commonly recognized KPIs. It’s a measure of how likely your customers are to recommend your product or service to others.

The method for determining NPS is very easy – a Likert scale distributed by survey, with 0 being not at all likely to recommend, and a 10 most likely to recommend. Customers who identify their likelihood as 9 or 10 are called promoters; those with 7 and 8 are passives; and those with 0-6 are detractors. The percentage of detractors is then subtracted from the percentage of promoters, revealing a score between -100 and +100.

The exact number that defines an ideal NPS varies by industry. Though it’s worth noting that, in general, any score above +1 is considered "good," as this indicates the company has more promoters than detractors. But it should certainly be your company’s goal to have a NPS much higher than +1!

NPS is a particularly important KPI for your support team to monitor. For SaaS and tech companies, the NPS is also a key metric for the product and development teams.

Why is Net Promoter Score important?

It should probably go without saying that NPS is important because it tracks customer satisfaction with your brand, and in a complex manner that reveals a good deal of information about your customers’ relationship with your company.

Based on what counts as such in your industry, little need be said if your NPS is high. If it’s low, however – even if it exceeds your industry benchmark for an acceptable score–it’s likely that your company’s primary focus should be on improving customer satisfaction immediately. There’s no need to explain why failing to address this, especially in a competitive market, won’t do you any favors.

How to calculate Net Promoter Score

Calculating the NPS is easy–simply subtract the percentage of detractors (6 and below) from your percentage of supporters (9 and 10). Neutrals are excluded from the calculation.

Best practices for Net Promoter Score

The best way to ascertain your NPS is by staying in regular contact with your customers. Sending a customer feedback survey, whether by email or pop-up on your website, is the first and most important step in obtaining information that will lead to your NPS. Follow up your survey with invitations for your customers to participate in interviews or other in-depth, qualitative surveys so you can understand why they answered the way they did.

Track your NPS over time, so that you can discern the trends of customer satisfaction and their potential causes. As your analysis of NPS grows increasingly sophisticated, you can break down your NPS by demographics, assigning each relevant demographic an NPS of its own.

Finally, use NPS as an indicator of your overall business health. A low NPS means trouble is on the horizon, if not already here. But a high NPS is a sign you’re on the right track, and a call to improve upon your already-winning formulas for continued future success.

Other KPIs similar to Net Promoter Score include:

• Customer Satisfaction (CSAT)
• Customer Effort Score (CES)
• Escalation Rate