What is the Net Promoter Score (NPS)?

What is the Net Promoter Score (NPS)?

If you’ve ever had a hard time taking the plunge and buying something or switching between products or making any kind of big decision – you’re not alone.

Even deciding where you and your significant other are going to eat for dinner can be an exhausting process. If you turned to friends, colleagues and family for advice and recommendations, you’re also not alone. Plus if you’ve sourced review site on the internet (TripAdvisor or Yelp, anyone?) you’re also amongst company. According to Nielsen’s Global Trust in Advertising Report, 83% of respondents said that they trusted recommendations from family and friends more than any other forms of advertising.

Net Promoter Score

Uh oh, this means that customer’s word of mouth and reviews are vital for the ongoing success and growth of your business. With customers being 3 x as likely to tell others about a bad experience they had versus a positive experience –  this becomes even more crucial. Factor in the  social media amplification effect with everyone able to broadcast their experiences and recommendations to their entire network and beyond and it becomes pretty apparent that ensuring your customers are likely to say positive things about your brand is one of the most important things to get right.

But how do you know if your customers are happy AND willing to recommend you to others in their network?  Additionally, how do you identify loyal customers and encourage them to turn from passive fans to active promoters of your brand?

The Net Promoter Score (NPS).

The Net Promoter Score, frequently shortened to just NPS, is a benchmark of customer satisfaction that assesses how likely your customers are to recommend you to others. The NPS is a relatively simple feedback survey technique designed to find your most loyal customers who will attract and refer new business and help identify where you can improve customer loyalty.

The NPS is different from other common benchmarks, like customer satisfaction score or the customer effort score. Unlike those benchmarks which investigate a customer’s experience with a single interaction or purchase of a product, the Net Promoter Score measures your customer’s overall perception and sentiment towards your brand.

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.

Learn how to calculate Net Promoter Score in Displayr

 

About Lucy Li

Lucy is a writer and editor at Displayr. She previously worked in media and the entertainment news industry before making the jump into data science. Catch her scouring the internet trying to find datasets to answer all the crazy questions she has and trying to make pretty visualizations. An Oxford Comma supporter.