Net Promoter Score (NPS) is a critical metric in tracking customer loyalty. It is one of the most practical methods for gauging the attitudes and behaviors of customers.
So, how can you measure net promoter score, and why is it so influential in customer experience management?
In this ultimate guide, our net promoter score company thoroughly explains everything you need to know about this widely used customer satisfaction metric.
Article Contents
- What is NPS?
- How to calculate NPS
- What is a good NPS?
- How to conduct an NPS survey
- Benefits of NPS
- Drawbacks of net promoter score
- Other customer satisfaction metrics to measure
- How to improve your NPS metric
- How often you should track NPS
- How else can you use your NPS findings?
I told you we'd be thorough 😉
NPS is a metric that’s grown more and more in popularity over the past decade. It's probably one of the most, if not the most common metrics or KPIs used in market research and in customer satisfaction surveys.
Better yet, NPS can reveal where a company stands against its competitors. And with up to 56% of professionals using some form of competitive research, it's a metric you don't want to ignore.
Essentially, NPS measures total satisfaction – it focuses on loyalty to a product, service, or organization.
It's measured using a zero to 10 scale, AKA, the Likert scale.
Made up of 11 points, a zero on the Likert scale would be not at all likely to recommend, and 10 would be very likely to recommend, or extremely likely to recommend.
These measurements are accomplished through a scaling question such as “On a scale of 0 to 10, how likely are you to recommend our business to a friend or colleague?”
The outcome and the NPS score can range anywhere from -100 to +100, with -100 being the worst case, and +100 as the best case.
Here’s where the three main groupings come into play:
- Promoters
- Passives
- Detractors
Promoters
When you look at that 11-point scale, respondents who are at 9 and 10 are what you would call the promoters of your brand, organization, product, or service.
A promoter is someone who's loyal to your brand–they'll go out of their way to kind of talk about your brand with a positive sentiment. Basically, the dream consumer.
Passives
Next, you’ve got the passives.
That’s the group that rates as a seven or eight on a 0 to 10 scale for a “likely to recommend” for NPS.
A passive is someone who's fairly satisfied–decently loyal to your brand but can be easily swayed to a competitor. Put simply, there's something that is preventing them from giving a 9 or 10 on an NPS scale.
Detractors
Lastly, there are those who are detractors. This group is defined as those who rate “likelihood to recommend” on a 0 to 6 scale.
Seems like a very broad range, right?
But it's for a reason –- many of those who rate their satisfaction as mid-tier, or lower on the Likert scale, are far more likely to gravitate toward the negatives and things that they don’t like about the brand.
NPS Example
Here’s a net promoter score example for you.
When people ask, “do you have a certain type of tennis shoe that you would recommend,” the detractor will jump to brands they wouldn't recommend, whereas the promoter would jump to who they would recommend.
Even if you would think about that on a 5-point scale, it's essentially grouping.
The 5s would be your promoters, the 4s would be your passes. The 0 to 3s would be your detractors–someone who's writing you a 0 to 3 on a 5-point scale or a 0 to 6, on an 11-point scale.
💡 The Key Takeaway: Calculating your net promoter score centers around if your brand would be or wouldn’t be recommended. For this, we have promoters, passives, and detractors.
A net promoter score calculation is the difference between the percentage of promoters and the percentage of detractors.
When the numbers are run on the back end, the difference between those two audiences is taken.
If you have 75% of promoters and 10% of detractors, your NPS is going to be +65. If you have 25% of promoters and 50% of detractors, your net promoter score is going to be -25.
To learn more, read our case study How To Conduct A Net Promoter Score (NPS) Study.
💡 The Key Takeaway: Net promoter score calculation is a fairly simple process. It's the difference between the percentage of promoters and the percentage of detractors
This is a little bit of a loaded question, but one that our market research company gets asked a lot. And that's because NPS ranges quite a bit by industry, product, or service.
If your net promoter score is positive, that's a decent sign, because you have more people who are promoting your brand than detracting from it. This is always a good starting point.
You don't want to see a negative NPS, because that means you have more detractors than promoters of your product.
Typically, the +20, +25, and +50 range is usually considered a good net promoter score. If you have an NPS of 50 or higher, that's a great ballpark.
If there isn’t any context for benchmarking, calculating NPS can be tough.
When someone reports an NPS of +40, you’ll be wondering if that’s good or bad. It's always important to have some context that you can look into.
Again, NPS is one of the most common metrics in market research–there's tons of secondary research on NPS scores for specific brands for specific industries.
Meaning, spending some time on Google will let you know what good ballparks are. Here is an example from a study completed by Qualtrics in 2020.
Other NPS benchmarking to consider
It’s also key to benchmark against yourself. If it's the first time you're venturing into the NPS space in your survey, you always want to benchmark yourself against your scores from your last quarter.
And of course, you need to benchmark against the competitors.
This can be difficult to do with a customer satisfaction survey, or client satisfaction survey because you probably don’t want to be referencing competitors as part of that survey.
However, you can ask (generally) how likely respondents are to recommend other products they used.
If you're doing something through a third party, see if they’re doing a brand equity survey or an image and awareness survey. Or, see if they’re reaching out to the general population.
In these cases, they’d be able to collect NPS not only for your company but also for some specific competitors.
💡 The Key Takeaway: What is a good net promoter score? While there's no definitive answer, benchmarking can help add context to your score. Learn how it compares to the industry average, competitors, and your own data.
Recommended Reading: 4 Types of Market Research Benchmarks
NPS is a quantitative metric. What does this mean? It means that by design, NPS is designed to measure.
Because it's a quantitative metric, you're a little limited with how you collect that metric.
Of course, the world of market research has evolved quite a bit in the past two decades.
Various types of market research like phone surveys, intercept surveys, in-person surveys, and mail surveys, have been used far less by brands over the years.
So, how do we recommend you collect your NPS? With online surveys, of course. Luckily, they are cost-effective and provide insights fast.
Here is the process our online survey company follows to collect NPS on behalf of our clients.
1. Get a quote
The first step to conducting an NPS survey with a third party is getting a quote.
The cost of market research is dependent on several factors. However, being that this type of survey is shorter, it is fairly inexpensive to conduct.
Other factors that determine the cost include how frequently the survey is sent, the number of goal completes, and different reporting packages.
In many instances, our market research company works with organizations to alter and customize our offerings to meet any budget constraints.
2. Kickoff meeting
With any market research project, our team likes to begin with a kickoff meeting.
During this brief call, you'll meet your dedicated project team to discuss the goals and objectives for the NPS study.
Being that these surveys are brief, the kickoff meeting might not be necessary. These conversations can be achieved over email. It is totally depended on how involved or uninvolved you want to be with the research.
3. Survey programming
The survey design and programming are pretty straightforward when calculating your net promoter score.
The survey typically includes two to three questions:
- A question measuring the likelihood of working with your company again
- A question asking why customers provided that rating
However, our team can customize the survey based on your unique needs. For instance, say we're measuring a bank or credit union's NPS.
This could be a good time to ask other one-off questions to better understand the drivers of branch loyalty and member satisfaction.
4. Survey fieldwork
Once the survey is programmed and tested, our market research company moves on to fieldwork.
During this step, we'll ask for a customer email list. Contacts on this list are sent an email survey invitation.
The email includes a link to the survey and asks customers to complete it. Additionally, we will send follow-up emails to non-responders over the course of two weeks.
From your perspective, you will receive a live portal link.
This reporting dashboard shows results in real-time. As soon as someone takes the NPS survey, you will see their feedback and can begin building customer loyalty strategies.
5. Analyzing the results
Lastly, Drive Research cleans and analyzes survey responses. We offer various reporting packages depending on your budget and needs.
It can be as simple as an export of the results in an Excel spreadsheet, a topline report recapping key takeaways, or a comprehensive report sharing our expert recommendations for how to take action with the data.
💡 The Key Takeaway: Online surveys are the name of the game for collecting NPS–and most other market research methods. Sent out via email, these surveys are simple to complete.
“Why use net promoter score?” is a common question we frequently get from many business leaders.
By now, you are aware that the NPS score can help determine your customers’ loyalty. Using a single question, you can assess whether your consumers are satisfied or not.
But, let’s delve deeper. Here are more benefits of net promoter score.
1. Use NPS for benchmarking
Right off the bat, a big benefit of measuring your net promoter score calculation is for comparison purposes.
As a standard metric used across companies globally, NPS lets you compare your score with other scores in the industry and see how you measure up.
Companies with higher scores are likely to grow faster and retain more clients than companies in the same industry with lower scores.
Because NPS questions are simple, you can examine the findings, measure, compare, and benchmark your performance to your competitors.
This is also a great internal metric for comparison purposes as you build out your scorecards and KPI trackers.
2. It's easy to comprehend and easy to measure.
With 57% of consumers spending more on brands to which they are loyal, it's no wonder why most organizations want to build loyalty into their business models.
But, customer loyalty is a KPI that is constantly changing, making it hard to measure and quantify.
Luckily, successfully measuring customer loyalty can be achieved with NPS surveys.
And subtracting the percentage of "1s" through "6s" from the "9s" and "10s" is an easy calculation.
3. Measure consumer loyalty
Another benefit of measuring NPS is that it gives you a true picture of the likelihood to recommend and loyalty towards your brand.
It's strictly asking the question of how likely someone is to recommend your product, service, or brand.
Because it's such a useful metric, especially when coupled with the open-ended follow-up, you could start to understand likes and dislikes, drivers to loyalty, and so on.
4. Predicts future revenue
In addition to measuring the likelihood of repeat customers, NPS also helps forecast future cash flows, business growth, overall customer satisfaction, and the likelihood of earning new customers.
Here are a few statistics that acknowledge the value these metrics have on business growth and revenue:
- According to studies, 80% of most companies’ future profits come from 20% of their existing customers.
- 73% of consumers say a good experience influences their brand loyalties
- Customers are 4x more likely to refer a friend to the company they’re loyal to and 5x more likely to purchase again.
All of this means your future revenue is just sitting under your nose, waiting to be nurtured.
5. Track changes over time
Regular NPS surveys are great for tracking business performance.
When you regularly track your net promoter score, you understand how your business is performing in terms of customer satisfaction and lead generation.
You can spot areas for improvement and commit to increasing customer satisfaction over time.
If your NPS is increasing over time, it means that customers are more satisfied with the products and services they’re receiving from your business.
6. Gives direction for areas of improvement
NPS is a good measure because it lets you analyze customer loyalty and give direction for areas of improvement.
This gives you a chance to reach out to displeased customers.
For instance, if one of your consumers falls under the detractors’ category, you can send them a follow-up survey to find out what went wrong and how you can improve their experience.
By identifying your customer pain points, NPS can help your business make strategic changes that will ultimately increase sales and profits.
Studies show that 70% of detractors will return if you fix a problem they’ve complained about.
💡 The Key Takeaway: While there are many benefits to NPS, understanding benchmarks and accurate data are two of the most important.
Drawbacks of net promoter score
With all of the attention paid to how great of a KPI and metric it is, you rarely see anything produced about its limitations in market research.
Don't get me wrong, NPS is an excellent benchmarking statistic for an organization or company, but there are some cautions.
Understanding these limitations helps clients better understand the pros and cons of NPS and helps them decide on creating a KPI dashboard that best reflects their tracking needs.
1. It's not always a great fit for every brand
Some may feel NPS is a little bit overused, due to its popularity.
Because of the benchmarking purposes, and the ability to compare NPS to other competitors, it gets overused.
Generally, it’s not that important how people naturally recommend things, especially operating systems like iOS on their phones.
They're not out there having conversations recommending one of those, you know, to their friends or family.
Because of those situations, it gets a little bit misused, depending on the product or service that you're measuring.
2. NPS is also very subjective
As we found in surveys over the years, even with general CSAT scores prior to NPS, there's a large percentage of the public who just isn't likely to recommend something.
When you're asking them about their likelihood to recommend a product or service, you're going to have your passives, but they are fully satisfied with your product. This is just human nature and part of their behavior.
So, when asked that directly on a scale, this group is likely to rate a little lower, because it's just not something they do or it's not applicable.
3. It measures relationships, not transactions
One of the largest misapplications of NPS is using a likelihood to recommend score in a transactional survey with a customer.
The very existence of NPS is to measure a customer relationship which implies a broader scope.
Yet, NPS is far too often misused in surveys where KPI metrics like customer effort score (CES) would work better for short and succinct purchases or transactions with a customer.
For example, asking a B2B customer likelihood to recommend a company after purchasing a box of disposable coffee cups from a local distributor is odd. Asking this question after a very basic and routine purchase may seem out of place.
The customer may think...
"They're just paper coffee cups. Who would I recommend these to? I make this purchase every month. It's always the same."
What would be a better fit would be questions about the transaction.
- How easy was it to place the order?
- How easy was the website to use?
- Did the order arrive on time? How satisfied were you with the purchase process?
These types of questions are a far better fit than NPS and they fit the transactional nature of the relationship.
4. It has no standalone value
As is the case with many KPIs, they work well as benchmarks and measurement tools but they lack context.
If your NPS score comes back as a +45 what does this mean?
You may realize this is lower than the +55 you received last year but why?
As a single statistic, it only provides a highlight of company or organization performance, not the full story.
We always recommend asking a follow-up open-end of "why?"
This simple open-ended comment box can provide a client or market research firm with all of the information needed to dig a level deeper into NPS.
Yet too many companies and organizations forget to ask this simple Part 2 question after asking NPS.
These open-ended comments can be categorized and coded to allow the market research team to read into findings, interpret NPS, and make assumptions about why the NPS dropped 10 points since last year.
Without a follow-up question, NPS holds very little standalone value in a survey outside of a simple measurement.
5. It creates tunnel vision
We've seen it before. It's easy to get caught up in net promoter score that you ignore lots of other valuable feedback from a survey.
Since NPS is an easy metric to grasp and calculate it often gets a lot of internal attention from companies and organizations.
It is an easy-to-follow customer satisfaction metric that is understood across departments including marketing, finance, accounting, management, operations, and merchandising.
Everyone understands NPS but it can create a narrow-minded focus.
We recommend choosing from several different KPIs for your company. These KPIs can all be featured on a dashboard or one-pager paying equal importance to each metric.
More on what metrics Drive Research recommends in the next section.
💡 The Key Takeaway: Net promoter score calculation can be overused, which is one of its few drawbacks. Another con is that sometimes, respondents may simply not enjoy answering recommendation prompts. Because of this, this group will often provide lower ratings.
Other customer satisfaction metrics to measure
To get the most out of calculating your net promoter score, including other KPIs is essential.
While NPS is important for customer satisfaction and loyalty, you can’t forget about the other metrics out there that offer similar results.
Consider measuring the following customer satisfaction metrics in addition to NPS.
1. Customer Satisfaction Score (CSAT)
Customer satisfaction plays a crucial role in your business. Satisfied customers will always remain loyal to your brand.
Conducting CSAT is one of the most common types of market research a company can pursue.
It is a key performance indicator that helps organizations to measure how satisfied customers are with their products or services.
In a survey, simply ask: “How satisfied were you with your experience?”
Here, respondents select a rating either on a scale of 1 – 5, 1 – 10, or on the scale of very satisfied/very dissatisfied, stars, or smileys.
There is no specific way to scale this question as it depends on each business’s needs.
The common classifications on the 1 – 10 scale are as follows:
- Dissatisfied. Those rating you a 1 - 3
- Neutral. Those rating you a 4 – 7
- Satisfied. Those rating you an 8 - 10
Metrics like customer satisfaction and “likelihood to recommend” follow the same patterns as NPS. If the NPS goes up, then these metrics will also go up. If the NPS goes down, they’ll also go down.
Many Voice of Customer (VoC) survey questions using a Likert scale are essential to include in these surveys and work hand-in-hand with NPS.
2. Customer Effort Score (CES)
In addition to the quality of products or services, customer support services also play a critical role in determining customer satisfaction.
Customers are now more concerned about how you interact with them, how you solve queries, and how easy it is for them to do business with you.
This is where customer effort score (CES) comes in.
CES asks one simple question – ‘To what extent did the company/business make it easy for you to handle your issue?’
Survey respondents select a rating on a scale of 1-5, with "5" being the positive extreme or "very easy."
Another option is to ask respondents how much they agree or disagree with certain statements, such as the sample question below.
3. Correlation and regression analysis
Correlation and regression are also great add-ons as analytical techniques for NPS.
- Correlation analysis. This technique allows you to understand other scales, and how those scores most correlate to likelihood to recommend. If you want to boost your likelihood to recommend or understand what's driving it down for your NPS score, you can run a correlation analysis to understand which of those are linearly or inversely correlated.
- Regression analysis. This technique focuses on how the dependent variable changes in relation to changes in independent variables. What you'll be able to do with regression analysis is use some of those scaling questions. You can start to understand which of those has the highest impact on NPS rating, proportionately.
Additionally, you may find out through regression what causes the NPS to go way down and up. Regression can help you understand which of those secondary metrics are most impactful.
💡 The Key Takeaway: Customer Satisfaction Score (CSAT) and Customer Effort Score (CES) are among the top customer satisfaction metrics that help to improve customer experience. CSAT determines whether customers are satisfied with your products or services, while CES measures how easy it is for customers to do business with you.
Recommended Reading: Key Performance Indicators (KPIs) Your Business Needs to Be Measuring
How to improve your NPS metric
To improve NPS, you need to really understand the groups of promoters, passives, and detractors.
Step 1. Identify common themes among detractors
Our market research firm always recommends focusing on detractors to our clients.
What you do want to do is learn from them and understand how to make improvements on some of those common themes that are causing detractors.
However, keep in mind with detractors, it takes a fair amount of time and resources to try to move them up the NPS scale to a satisfied customer.
For context, 88% of consumers say it takes three or more purchases to build brand loyalty. That number of purchases could be even higher for detractors.
Put simply, it’s key to locate detractors, but don't spend a significant amount of time and money to have them become satisfied customers.
Step 2. Focus on why promoters love your brand so much to move the needle on passives
What is it specifically about a brand? What are some of those common themes in the open ends?
You can take a lot of the common themes that you see in your promoters, and use those as part of your operational fixes to promote passives.
Understanding what it takes to move a passive to a promoter offers the biggest opportunity when you look at your NPS ratings.
Focusing on time and energy, on what promoters love about you, and then using those learnings to promote them to passives is the way to go.
Look at the sentiment analysis, test analytics, and any other metric to understand the promoter audience more. Then, you can use this information to target your passives.
💡 The Key Takeaway: Improving your NPS metric boils down to one simple sentiment: understand your audience. These are your promoters, passives, and detractors. Dig deep as to why they may be responding the way they are.
How often you should track NPS
It all depends on your business model. Obviously, there are different kinds of trends in terms of calculating NPS regularly.
This often occurs when measuring net promoter scores for retail stores. Customers will get an email sent to them asking about customer satisfaction, potentially NPS.
But there are all kinds of other options such as quarterly, depending on your business model.
If you're a professional services organization, and you don't onboard a ton of clients, it may not make sense for you to send regular surveys.
At the very least, we will say that regardless of the business or product type, you should be at least tracking NPS and general CSAT metrics on a yearly basis.
It just makes for good business– having those built into your scorecards as part of your goals and objectives.
This should be applicable to all types of businesses or organizations.
Another common time to track NPS is if you're going through any major changes within the customer experience.
If you're rolling out a new training procedure, or new training protocol, you want to understand how that's impacting NPS and some of those other CSAT factors.
In those cases, it's better to have some type of benchmark and early understanding of those changes rather than waiting.
Something else to keep in mind, you know, a good time to measure CSAT and NPS is right after significant changes–whether it's operational or strategic.
💡 The Key Takeaway: How often you plan on calculating your net promoter score really depends on the type of business you have. However, at the very least, measuring your NPS at least once a year is the best practice.
Recommended Reading: The Benefits of Continuous Customer Feedback Surveys
How else can you use your NPS findings?
So, after all of this, how else can you use your NPS findings?
The beauty of NPS is that it’s so simple–even those who aren’t familiar with market research will be able to conduct it.
At Drive Research, we spend a lot of time talking to our clients about common areas in that they can use our results.
One area is for operational use.
Our clients are learning from their customers and they're taking those learnings and building them into various protocols.
A second is marketing.
Conducting market research can always benefit a brand’s marketing strategy. That could be a messaging channel, that you're marketing to profiles of your best customers–there are all types of learnings that you can use.
You’ll want to feature the NPS pages on your website, to give potential customers insight into your brand.
Simply understanding someone who maybe sees that it could impact or at least accelerate their path to purchase can make a big difference.
Additionally, any way you can carve up the content to use for other purposes is huge.
Consider additional content pieces–things like white papers or compare cards. Both of these are great ways to expand on what the original survey found.
And obviously sales collateral–you have internal decks and salespeople that are using this as part of their day-to-day calls, meetings, and things like that.
And then, there’s strategy.
How can you shift your strategy? Or should we be focusing more on one area of our business versus another? Is there a cross-selling opportunity between our clients from different areas of business?
While results can’t be controlled, if an NPS score is positive, we can run a crosstab to understand how demographics play a role.
We advise our clients to refresh their NPS yearly, to have accurate benchmarking data for the best results.
💡 The Key Takeaway: Once you’re done calculating your net promoter score, you’re able to use the findings for various aspects of your business such as operations, marketing, and strategy.
Measure Your NPS with Drive Research
You’re an NPS expert now, right? Just kidding. But we hope you know a little more about this topic than when you first started reading our blog!
If you're interested in working with a market research company to measure NPS and other key performance indicators, we can help with that too.
Drive Research is a national market research company in Upstate NY offering services to clients all across the United States. Our range of market research services includes online surveys, customer satisfaction, focus groups, and more.
Contact us through any of the four ways below.
- Message us on our website
- Email us at [email protected]
- Call us at 888-725-DATA
- Text us at 315-303-2040
George Kuhn
George is the Owner & President of Drive Research. He has consulted for hundreds of regional, national, and global organizations over the past 15 years. He is a CX-certified VoC professional with a focus on innovation and new product management.
Learn more about George, here.
