How Does the NPS work?
So how does it work? Simply ask your customers a single question: “How likely is it that you would recommend my brand/product/service to a friend or colleague on a scale of 0-10?”. Respondents are then sorted into groups based on their answers. Those who fell into the 0-6 score group are known as detractors while 9-10 are known as promoters. What if they gave a score of 7 or 8? This group of customers are known as passives – while 7 or 8 is not a bad score, it is not positive enough to suggest that they will be likely to actively promote your brand by recommending it to a friend.
Why Should I Measure My Company's NPS?
Put simply, the NPS is one of the easiest and most effective measures of customer loyalty. Involving only a single question and follow-up, it is a relatively low burden survey to answer time for customers. It also makes the NPS one of the least complicated surveys to administer AND analyze. Only a single simple formula is needed, meaning that you don’t need to hire a specialist to administer the NPS survey or to calculate the results.
The Net Promoter Score can help you quantify something that can be tricky to measure – word-of-mouth. Net Promoter Scores also correlate with a company’s organic growth measures. Finally, one of the most underrated factors of the NPS is that it can align a team under a common goal – improving your company’s NPS.
How to Calculate Your NPS
To calculate your NPS, all you need to do is subtract the percentage of detractors from the percentage of promoters. As a simple example, if you had 100 responses with 80 Promoters (Promoters = 80%) and 20 Detractors (Detractors = 20%), this formula becomes:
80-20 = A Net Promoter Score of 60
Analyzing and Visualizing Your Net Promoter Score
You can analyze and visualize your NPS several different ways. For example, one of the simplest visualizations is to plot the frequency or percentage of the ratings, which range from 0 to 10. This plot provides insight into the distribution of ratings within each group. You can also create a visualization based on responses by promoter group if you were doing a comparison between brands, services or products.
The final aggregation step is to compute NPS as the percentage of promoters minus the percentage of detractors. Rather than just calculating one NPS for all the respondents you can explore your NPS for categories of respondents, such as by age, gender, income or other attributes. Is their one group that is more likely to be promoters or detractors?You can also use column or line charts to show your NPS over time. This is particularly useful for investigating whether your NPS is affected seasonally and seeing if you can identify any trends.
Make sure you check out "How to analyze your NPS" for more information and examples!