What is Net Promoter Score?
Net Promoter Score (NPS) is a measurement of customer loyalty. This measurment is calculated by taking structured feedback from several consumers and boiling it down to a single number. NPS is popular because it is simple, effective, and usually correlated to revenue.
The history of NPS
The Net Promoter System was developed in 2002 by a Consultant for Bain & Company named Fred Reichheld. The goal was to build a metric that that predicts customer loyalty and ties it into business growth.
How it Works
Your customers are asked the carefully phrased question: "How likely are you to recommend [business] to a friend?". A customer that is willing to promote (recommend) your business is more likely to be a recurring customer with a high lifetime value. But a customer that rates you negatively will likely to detract from your business by leaving or spreading unfavorable press. NPS was built to help you identify both types of customers so you can work with them to ultimately improve your business.
In Short: Ask your user if they are likely to recommend your business and segment the results.
How to calculate your NPS
Step 1. Ask the Question
This is a single question survey that is answered in two parts. The question is "How likely are you to recommend [business] to friend?". The first part is a 0 – 10 numerical rating. This provides an easy to understand benchmark that you can track as time goes on.
The second half of the survey is an open ended follow-up question. This feedback allows the customer to provide context for his/her rating. This important because it removes any possible bias that targeted survey questions might add.
Step 2. Group the responses
Take your results and group the customers in three groups according to their numerical responses.
- 9 or 10 mark as Promoter
- 7 or 8 mark as Neutral
- 7 to 1 mark as Detractor
Step 3. Calculate your Net Promoter Score
NPS will provide a score that ranges from −100 to 100. This score will serve as grade your site's overall customer experience.
NPS = Percentage of promoters minus the percentage of detractors.
For example: If you got 100 responses and 80 are promoters and 10 are detractors (10 are neutral). Then you have 80% promoters (80/100) and 10% detractors (10/100) giving you a NPS of: 80 - 10 = 70.
What to do with your NPS
Now that you have a Net Promoter Score you can use it to improve your site and how you provide support to your customers.
Track NPS Over Time
Keeping an eye on your NPS over time lets you have a metric to measure the success of your site changes and other changes to your business.
Act on customer feedback
Remember part two of the question? Time to put it to use. Read all the responses from your customers and use it to determine the changes you need to make to move your business forward.
Zigpoll makes NPS simple
Have a look at the Zigpoll on this page to see how easy it is to implement NPS on your website. Try it today and start moving your site in the right direction.