What is NPS and How to Calculate it?

Net Promoter Score (NPS) is a customer satisfaction and loyalty metric that measures the likelihood that a customer will recommend a company’s products or services to others. It is based on a single question: “On a scale of 0 to 10, how likely are you to recommend [company] to a friend or colleague?” 

Customers are then classified into three categories based on their responses:

Promoters (9-10): Customers who give a score of 9 or 10 are considered “promoters” and are likely to be loyal and continue doing business with the company. They may also recommend the company to others.

Passives (7-8): Customers who give a score of 7 or 8 are considered “passives.” They are satisfied with the company but may not be particularly loyal or likely to recommend the company to others.

Detractors (0-6): Customers who give a score of 0 to 6 are considered “detractors” and are unhappy with the company. They may need to be more loyal and may even discourage others from doing business with the company.

To calculate NPS, the percentage of detractors is subtracted from the percentage of promoters. 

(% of promoter – % of detractors)

The resulting number can range from -100 (all respondents are detractors) to 100 (all respondents are promoters). A positive NPS is generally considered good, while a negative NPS may indicate a need for improvement.

Importance of Conducting NPS Survey

There are several reasons why it is important to conduct Net Promoter Score (NPS) surveys:

• Customer satisfaction: NPS surveys provide a quick and easy way to measure customer satisfaction and identify areas for improvement. By regularly collecting and analyzing NPS data, you can understand your customer’s needs and preferences and make changes to improve their experience with your company.
• Customer loyalty: Promoters (customers who score 9 or 10 on the NPS scale) are more likely to be loyal to a company and continue doing business with it. By measuring NPS, you can identify which customers are most loyal to your company and target your efforts to retain and grow their business.
• Word-of-mouth marketing: Promoters are also more likely to recommend a company to others, which can be a powerful form of marketing. By measuring NPS, you can understand how likely your customers are to recommend you to others and target your marketing efforts accordingly.
• Comparative benchmarking: NPS is widely used as a measure of customer satisfaction and loyalty, so you can compare your NPS score to those of other companies in your industry. This can help you understand how you stack up against your competitors and identify areas where you need to improve.
• Continuous improvement: By regularly conducting NPS surveys and acting on the results, you can continuously improve your products, services, and overall customer experience. This can lead to increased customer satisfaction, loyalty, and ultimately, business growth.

Topics to include in the NPS survey

Here are some potential topics that you could include in an NPS survey:

1. Overall satisfaction with the company’s products or services
2. Ease of use or functionality of the products or services
3. Quality of customer service
4. Speed and efficiency of the company’s processes (e.g. order fulfilment, problem resolution)
5. Value for money
6. Likelihood to continue doing business with the company
7. Likelihood to recommend the company to others
8. Areas for improvement (e.g. specific products or services, overall customer experience)

Keep in mind that it is important to keep your NPS survey short and focused. You may want to consider limiting the number of topics you include to those that are most relevant to your business and customers. You may also want to consider including open-ended questions to gather more detailed feedback from customers.

How to conduct an effective NPS survey for your customers

Here are some steps you can follow to conduct an NPS survey:

• Define your survey goals: Clearly define what you want to learn from your NPS survey. This will help you focus your questions and ensure that you get the information you need.
• Choose an appropriate survey tool: There are many tools available for conducting NPS surveys, such as online survey software, email surveys, or phone interviews. Choose a tool that is convenient and accessible for your customers.
• Design your survey: The most common way to measure NPS is by asking customers to rate their likelihood to recommend your company on a scale of 0 to 10. You can also include additional questions to gather more specific feedback about your products or services. Keep your survey short and focused to maximize response rates.
• Distribute the survey: Send your NPS survey to a representative sample of your customers. You may want to consider targeting specific customer segments or those who have recently interacted with your company.
• Analyze and act on the results: Once you have collected and analyzed the survey responses, use the results to identify areas for improvement and develop a plan to address any issues that are identified. Be sure to communicate the results and action plan to your customers to show that you value their feedback.

By following these steps, you can conduct an effective NPS survey that will help you understand your customers’ needs and preferences and improve their satisfaction with your products or services.

Tools to use for the NPS survey

There are many tools available for conducting Net Promoter Score (NPS) surveys. Some popular options include:

• Online survey software: There are many online survey tools that allow you to create and distribute NPS surveys via email or online forms. These tools often have features like customizable templates, real-time data analysis, and integration with other software.
• Email surveys: Email surveys are a simple and convenient way to gather NPS data from customers. You can use a tool like Mailchimp or SurveyMonkey to create and distribute email surveys.
• Phone interviews: Phone interviews allow you to gather more detailed and personal feedback from customers. You can use a tool like CallHippo to schedule and conduct phone interviews with customers.
• In-person surveys: If you have a brick-and-mortar location, you can conduct NPS surveys in person with customers. This can be done using paper surveys or electronic devices like tablets or laptops.

Ultimately, the choice of tool will depend on your specific needs and resources. Consider factors like the size and demographics of your customer base, the type of feedback you want to gather, and your budget when choosing a tool for your NPS survey.

Examples of designing an NPS survey

Here are some examples of how you might design an NPS survey:

Example 1:

1. On a scale of 0 to 10, how likely are you to recommend [company] to a friend or colleague?
2. What is the primary reason for your rating? (open-ended)

This survey includes a single rating question followed by an open-ended question to gather more detailed feedback. It is short and focused, which can help increase response rates.

Example 2:

1. On a scale of 0 to 10, how likely are you to recommend [company] to a friend or colleague?
2. How satisfied are you with the quality of our products or services? (0-10 scale)
3. How satisfied are you with the value for money of our products or services? (0-10 scale)
4. How satisfied are you with the speed and efficiency of our processes (e.g. order fulfilment, problem resolution)? (0-10 scale)
5. How satisfied are you with the quality of our customer service? (0-10 scale)

This survey includes multiple rating questions to gather more detailed feedback about specific aspects of the company’s products, services, and processes. It may be more effective at identifying specific areas for improvement, but may also be more time-consuming for customers to complete.

When to distribute the NPS survey?

There is no one-size-fits-all answer to when you should distribute an NPS survey. The best timing will depend on your specific goals and the type of feedback you are seeking. Here are a few factors to consider when deciding when to distribute your NPS survey:

• Customer interactions: You may want to consider distributing your NPS survey after a customer has had a specific interaction with your company, such as purchasing a product or using a service. This can help you understand how the customer’s experience with your company influenced their likelihood to recommend it to others.
• Product or service launches: If you are launching a new product or service, you may want to consider distributing an NPS survey to gather feedback and identify any issues that need to be addressed.
• Regular intervals: You may want to consider distributing your NPS survey on a regular basis, such as quarterly or annually, to track changes in customer satisfaction and loyalty over time.
• Seasonal changes: If your business experiences seasonal changes, you may want to consider distributing your NPS survey at specific times of the year to gather feedback about how well your company is meeting the needs of customers during these periods.