Net Promoter Score Explained

Net promoter score, or NPS, is an important customer experience metric. In a nutshell, it measures how loyal customers are to a company. That’s important because the more loyal a customer is to a brand, the more likely that customer is to make repeat purchases or avoid purchasing products from a competing brand in the same industry.

NPS was initially developed in 2003 by Bain and Company. But now, millions of businesses use NPS in order to track just how well they are perceived by their core customer demographics. For instance, if you want to know what your target audience thinks of your brand and how loyal they feel to your services, calculating their NPS can help.

With an NPS score, you can determine:

• How loyal customers are to your brand
• Whether you need to change things about your products, prices, or marketing
• How best to maximize customer loyalty, particularly when making product changes or when growing your business (such as by expanding into new stores)

At Awesome CX, we’re incredibly proud of our work, and the proof of our success is in the numbers. Not to totally brag, but we ourselves scored a 85 NPS from our customers. (Since we are already bragging, we also scored a 92% CSAT.)

How Is NPS Calculated?

Net promoter score is always measured with a one to two-question survey. It’s been reported with a number that ranges from -100 to +100. The higher the score, the better.

Most NPS surveys have two different questions (with varying language):

• How likely are you (the customer) to recommend our products or services to a friend or colleague?
• What is the reason for your score?

The first question is measured on a scale from 0 to 10 or 0 to 100, depending on how you set up your questions. When a customer answers that first question, they get automatically segmented into separate groups for further analysis.

The second question is not necessary, but it allows you to collect additional, freeform feedback and can provide important context for customer answers.

In any case, the answers to the first question separate customers into three different sections or segments:

• Detractors: these are customers who responded with 0 to 6 or 0 to 60. These are customers who will churn and are likely to speaking negatively about your brand
• Passives: who responded with scores of 7 to 8 or 70 to 80. This segment of customers is generally satisfied but is not loyal or happy enough to actively and freely promote your products
• Promoters: who responded with 9 to 10 or 90 to 100 scores. These highly satisfied customers are likely to spread positive word-of-mouth about your product.

The NPS Formula

Once you have these answers, you can calculate the net promoter score by discarding the passive customers and subtracting the detractor customers from the percentage of promoter customers.

Here's what the formula looks like:

• % of promoters - % of detractors = NPS

Say that you have a customer segmentation percentage base of 20% detractors, 30% passives, and 50% promoters. Remember, discard the passives. Plug the remaining numbers into the formula, and you get:

• 50% - 20% = 30%

In other words, your net promoter score is 30. Remember, you want this to be as close to 100 as possible!

Best Practices for Accurate, Informative NPS Surveys

How you set up and present your NPS surveys can impact just how accurate and actionable your customer information is. Here are some best practices to ensure that your NPS surveys are as beneficial to your company as possible.

Distribute NPS Surveys in the Right Places

First, be sure to distribute your NPS surveys in the right places. There are two smart places in which to provide NPS surveys to your customers:

• In transactional emails, such as “thank you” emails after a customer orders a product from an online or retail store
• Inside product boxes or packaging

These simple, easy-to-adjust channels are perfect for NPS surveys because they appear when customers are already thinking about your product and after they've made a purchase.

Of the two, transactional email NPS surveys are more customizable, as you can trigger them with a date or specific event. For example, you can use email marketing software to send an NPS survey email to a customer who purchased a product one week prior, presumably after they’ve already tried out the product and formed an opinion.

Time Your Surveys Wisely

Next, be sure to time your NPS surveys wisely. Don't spam NPS surveys to your customers, which could irritate them and make them less likely to answer the questions. You should also not send NPS surveys too quickly — otherwise, your customers may not have enough time to try out your products or services to give an accurate, useful opinion of your brand.

It’s okay to ask for NPS feedback more than once, but usually not more than twice. Again, try not to go overboard when sending NPS surveys to your customers.

The best time to send an NPS survey request is when the customer is likely to make a decision about whether to return to your business. For subscription-based brands, this could be when the subscription renewal date is coming up or when the initial subscription expires.

Pre-Notify Customers

In many cases, it helps to pre-notify your customers of an NPS survey, such as by asking them if they are willing to take a brief survey about their experience. This prevents customers from feeling ambushed and makes them more likely to view your brand in a positive light.

Customize and Personalize the Surveys

Personalization and customization are king when it comes to modern marketing, and that’s also true when it comes to NPS surveys. Use different language for your customers depending on whether they are more formal audience members, casual consumers, and so on. The right language — and employing personalization efforts such as using a customer’s first name — can make your brand appear more earnest and positive before customers respond.

Note that this impression should not change how customers respond to the survey itself. It will, theoretically, at least, make customers more likely to answer the survey at all.

Send the Surveys to the Right Number of Customers

Just like it's crucial to send NPS surveys at the right times, you should also send them to the right number of customers. Generally, you should send NPS surveys to a decent percentage or proportion of your customer base. Otherwise, any responses you get will be too isolated to be statistically relevant to your analysis.

Send at the Ideal Stage in a User’s Journey

Don’t forget to send NPS surveys to users at the proper stages of their journeys. Ideally, NPS surveys should be sent:

• When consumers totally adopt or are used to your product, such as a week or so after purchasing it
• When customers make a repeat purchase, which is a good signal that they’re pleased with or deeply engaging with your brand

Use A/B Testing

A/B testing is the science of sending two very similar materials or surveys to a group of customers. For instance, in one NPS survey, you might use more formal language, and in another, you might use more casual language. Examine the results and response rate of both surveys, then continue to use the NPS survey type that had the better response rate overall.

A/B testing is excellent for maximizing the response rate for your NPS surveys and the effectiveness of other things like marketing emails, advertisements, etc.

Consider Survey Incentives

Lastly, consider offering survey initiatives to your respondents. For instance, a free credit, a chance to win free shipping, or even a small ebook could convince people on the fence to answer your NPS survey, helping you gather valuable data about your customers’ loyalty in no time.

How Can Awesome CX Help?

As you can see, there is a lot that goes into offering and analyzing a good net promoter score survey. Offering your surveys at the right time and to the right customers is key, as is taking customization and personalization into account.

Awesome CX can assist with many elements of an NPS survey. We can help you offer surveys through SMS, emails, or even live chat windows. Additionally, Awesome CX provides vital back-office support and analysis operations, helping you understand the answers customers give so that you make the best business decisions possible.

Contact us today to learn how Awesome CX can assist with your brand’s growth for years to come.

Sources:

User Journey Maps | Usability & Web Accessibility | Yale University

NPS: The Most Important Metric Your Higher Education Competitors Aren’t Using | Hanover Research

Net Promoter Score (NPS) - Definition, How to Calculate, How to Increase | Corporate Finance Institute