What is a Net Promoter Score?
Most businesses recognize the need to track metrics and KPIs that lead up to a sale. Organizations monitor their leads, count new conversions and opportunities, keep track of web traffic, sales presentations and other activities, all to help forecast future revenue and inform strategic decision-making.
While pre-sale metrics have always been important, it is only recently that a large number of businesses have developed metrics for measuring what happens after a sale.
The ultimate goal of business extends past revenue and sales growth – businesses should try to satisfy their customers, and not just because it feels good and gives meaning to their work.
Customers that are dissatisfied with your product or service may complain to your customer service department or to their family and friends, creating a negative image of your brand. They may describe their negative experience in online forums or on social media, and most times, they’ll never buy from you again.
Businesses that recognize the negative impacts of dissatisfied customers have started to focus more on customer experience and implemented new techniques for measuring customer satisfaction and loyalty following a purchase. One of these KPIs is known as Net Promoter Score (NPS).
How Does Net Promoter Score Work?
- Net promoter score is a metric that businesses use to measure customer loyalty.
- A business calculates its net promoter score by surveying its customers following a customer acquisition, usually a sale
- The survey for measuring net promoter score has only one question on it: “On a scale of one to ten, how likely are you to recommend this company’s product or service to a friend or colleague?”
- The survey respondent indicates their response by circling a number between one and ten.
- The business collects survey results and analyzes them to determine its net promoter score
- Net promoter score can act as a KPI for customer satisfaction or brand loyalty, helping executives or managers develop strategies for improving the customer experience
Net Promoter Score: Three Customer Classifications
When a customer responds to a net promoter score survey, they are grouped into one of three classifications based on how they responded to the survey question:
Detractors
Customers who rate their likelihood of recommending a product or service between 1 and 6 belong in the category of detractors. These customers were dissatisfied with some aspect of their experience and it is highly unlikely that they will purchase again. They may also complain about their experience with friends, family or on social media.
Passives
Passives are just satisfied with the product or service they received from your organization – these are the customers who answered the survey question with a 7 or 8. Passive customers probably won’t spread negative word-of-mouth about your company, but they won’t be singing your praises either and they may be prone to switching brands if presented with the right offer.
Promoters
Promoters are those customers that respond to the survey question with a 9 or 10. They love the company’s product and services, and their positive experience is helping them build a personal connection to the brand. Promoters demonstrate brand loyalty and are highly likely to recommend the product or service to at least one friend or family member.