NPS or Net Promoter Score: definition and calculation
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Introduction
Nowadays, customer satisfaction is of paramount importance for businesses in any sector. And to assess this satisfaction, it is now impossible to do without the NPS or Net Promoter Score. This key indicator has grown in popularity because It provides a simple and clear measure of customer satisfaction of a company. While NPS can really make a difference in a marketing strategy, some businesses fail to use it properly, or don't exploit it at all. But what exactly does the NPS and how does it work? 🤔
The NPS indicator: Definition and typology
What is NPS?
The NPS, or Net Promoter Score, is an indicator that calculates the probability of your brand, products or services being recommended by your customers. Evaluate the NPS thus makes it possible to measure the loyalty and attachment of customers to a brand 👍. This is why more and more companies are now using this indicator to assess their performance and thus implement actions to improve customer satisfaction.
The principle of Net Promoter Score is quite simple: it consists in measuring how much your customers would recommend your brand or products to those around them 😎. The NPS is therefore a score given by customers in response to the question:”On a scale of 1 to 10, how likely is it that you would recommend our services to someone you know?” 🤔
Very popular, the Net Promoter Score is an indicator that is easy to interpret and track over time. To do this, simply submit your customers to regular NPS satisfaction surveys, or use research institutes such as Speech, to help you measure customer satisfaction.
The Net Promoter Score (NPS) is a measure of customer satisfaction based on a recommendation question. It is also possible to use the NPS to conduct satisfaction surveys with your competitors' customers, in order to compare the performance of your business 😉. Les Scores NPS of large companies are now public and easily accessible information online. Sites like CustomerGauge 🔍, which centralize the scores of thousands of organizations, allow brands to compare themselves with the competition and identify areas for improvement.
NPS score: How do you rank your respondents?
The score NPS of a brand or product is between 0 (not at all satisfied) and 10 (very satisfied). Based on the grade given, your respondents can be classified into 3 categories different: detractors, passives and promoters.
- 😠 The Detractors (0-6): Those who are not satisfied with the proposed experience and who are at risk of sharing this bad experience online or with their acquaintances via word-of-mouth.
- 😐 The Liabilities (7-8): These people are moderately satisfied with the proposed experience. There is therefore a risk that they will leave for the competition if a better experience is offered.
- 😄 The Promoters (9-10): They are very satisfied with the experience offered, which makes them very likely to recommend you to their acquaintances and leave positive reviews online. They can even become ambassadors for your brand by talking about you on social media!
However, it should be borne in mind that the Net Promoter Score cannot by itself represent the satisfaction of your customers. To obtain a more complete overview, it is recommended to combine it with other more detailed studies such as satisfaction surveys. In this way, you can get deeper and more accurate information about how your customers perceive your business.
How do you calculate your NPS score?
The NPS is therefore a very effective tool for evaluating the satisfaction and loyalty of your customers. But how exactly is it calculated? And from what score can we consider it to be a good result? 🤔
Before calculating your Net Promoter Score, make sure you have collected a sufficient number of responses to obtain a result that is representative of the opinion of your customers: the more data you collect, the more accurate your final score will be 👌. It is therefore recommended that you design your questionnaire well in order to gather enough data to understand the score awarded.
Then the NPS is calculated in a very simple way: First of all, you have to transform the number of responses for each category into a percentage. Then, all you have to do is subtracting the Percentage of detractors ofthe percentage of promoters: The end result is the NPS score! 😎
For example, out of 200 respondents, if 100 are considered promoters (50%), and 20 are detractors (10%), your NPS is equal to 50 - 10, so 40. Note that the NPS score can vary from -100 to +100, and that it is always expressed as a number and not as a percentage! 🤓
How do you interpret your NPS score?
Although The NPS score is an important indicator, it is not really meaningful as data alone... So, how to interpret and use the data obtained froman NPS survey? 👀
To correctly interpret this indicator, the first aspect to take into account is the importance of the number: the higher it is, the more likely your customers will be to promote your brand 😎.
☹️ So, an NPS score less than zero Show that the experience offered by your company is very unsatisfactory and requires urgent revision. To improve your NPS, you can, for example, offer promotions and special offers to your customers to encourage them to buy more products, or optimize the user experience of your website or application through smooth navigation and an ergonomic user interface.
😁 One NPS score greater than zero Indicates a correct customer satisfaction. However, it's still important to look for ways to improve your customer experience and increase your NPS score. For example, by staying on the lookout for market trends to offer innovative products and services that meet the needs of your customers.
😎 One NPS score of 50 or higher Indicates a good customer satisfaction, which means strong loyalty and positive recommendations. When your customers are happy, they are more likely to value your brand and recommend it to others.
🤩 Finally, more your NPS score is close to 100, the more you tend to exceptional satisfaction. Achieving such a high NPS score is rare, however, some brands succeed in creating an emotional connection with their customers, turning them into real fans and ambassadors. To achieve this level of satisfaction, your company must offer an offer that is adapted and differentiated from the competition, while creating a close relationship with your customers.
Another aspect to consider in order to correctly interpret this loyalty indicator is The company's sector of activity. There are large differences in the average score between sectors, and a score can be considered low or high depending on the field of activity of the company concerned. Indeed, it will be easier for a customer to recommend a clothing brand than a bank, because expectations and experiences are different.
And luckily, for businesses that want it, there are several tips for improve your NPS score and boost your customer satisfaction : train your employees, use the right tools, integrate an FAQ on your site... and more!
Interpret the NPS score: The higher it is, the better the recommendation for your product or service is.
Net Promoter Score calculation example
Here is an example of a Net Promoter Score (NPS) based on a scenario where a business interviews 1000 of its customers to assess their overall opinion:
Let's imagine a company that wants to assess customer satisfaction using the Net Promoter Score (NPS) method. To do this, it interviews 1000 customer customers by asking them the standard NPS question: “On a scale from 0 to 10, to what extent Would you recommend our company to a friend or to a colleague?” Customers are asked to give a grade, where 0 means “Not at all likely” and 10 means “Extremely likely.”
Once the responses are collected, the results are analyzed. Among the 1000 respondents, we note that 765 gave a score of 9 or 10 (the promoters), 120 gave a score of 7 or 8 (the liabilities) and 115 gave a score of 0 to 6 (the detractors).
To calculate NPS, we subtract the percentage of detractors from the percentage of promoters. In this case:
- Percentage of promoters: (765/1000) * 100 = 76.5%
- Percentage of detractors: (115/1000) * 100 = 11.5%
NPS = Percentage of Promoters - Percentage of Detractors: NPS = 76.5% - 11.5% = 65%
So the NPS for this company is 65.. This indicates a very positive score, which suggests that the majority of its customers are promoters, that is, they are likely to recommend the business to others.
It is important to note that the interpretation of the NPS depends on the context of the company and its industry standards. To determine whether an NPS is “good” or “bad,” it is essential to refer to industry benchmarks and consider other factors such as qualitative customer feedback to get a complete picture of customer satisfaction.
Exploring the limitations and perspectives of NPS
🤔 However, it is crucial to recognize that the Net Promoter Score (NPS) presents some inherent limitations and that it has a potential that is still unexplored. An essential observation to keep in mind is that the factors beyond your control significantly influence the scores. Studies have shown time and again that customers tend to Report a negative experience more frequently than a positive one. It's plausible that your most loyal customers, who have no reservations about you, won't even bother to rate you! 😯
Thus, it is appropriate not to consider NPS as a measure in itself, but rather to Use it to identify trends. What does it reveal about the dynamics of your relationships with customers? If the number of Promoters are increasing, this may indicate a improving your reputation and brand image.
On the other hand, a lessening Of the number of promoters in relation to liabilities could sound like an alarm, suggesting a possible increase in the rate of churn.
😉 From this perspective, the critical question for businesses is: how to act quickly based on customer feedback to improve customer experience, increase NPS, and reduce customer loss? This is it of a continuous challenge which requires constant attention to listening to customers and adapting your actions accordingly.
Raising the Net Promoter Score (NPS): Strategies to adopt
📈 Improving NPS is not a magic quest, but rather an approach based on proven practices that can improve the quality of the customer experience and promote more rewarding interactions. Here's how a business can do it:
🥇 Mobilization of all stakeholders
Make sure your entire business understands what NPS means and why it's important, not seeing it as an end in itself. In case of low NPS, get everyone involved. Engage customer service, marketing, and sales teams to brainstorm ways to improve communication with prospects and get them interested in your business.
🥈 Building an emotional connection
Empathy is key. After all, your customers are human beings. Your brand should resonate with them and share their values. If your business embodies strong values or a distinctive culture, consider how to promote them.
🥉 Gather the opinion of promoters
Your brand promoters are already won over, and they are ready to support you. But what drives them to this profound commitment?
👂 Listen to detractors to make progress
Don't underestimate the opportunity to learn from your detractors. Accept their criticisms seriously and with consideration.
🔎 Scan your product
Conduct focus groups and customer visits to see how they interact with your product. This will allow you to determine if your product really meets their needs.
⚔️ Cultivate customer recommendations
To turn your existing customers into dedicated promoters, customer referral programs take a personalized approach. Create an online community dedicated to your customers, offering attractive benefits to reward their recommendations. Explore creative ways to encourage them to share their positive experiences on social media.
💯 Optimize communication with customer service agents
Customer service agents are on a mission to build human relationships and show customers that they matter. Refer them to the right representatives and ensure they have the resources they need to provide effective and personalized support.
By adopting these strategies, a business can not only improve its NPS, but also strengthen its relationships with customers, foster growth, and cultivate a base of loyal promoters.
Conclusion
Les NPS surveys offer an unlimited source of ideas to improve the customer experience by allowing businesses to understand the needs and expectations of their target audience 😎. Using the results of NPS surveys, brands can take action to improve the satisfaction of their customers. Ultimately, NPS can help businesses stay competitive by improving their ability to provide positive experiences for their target audience. In conclusion, the NPS is a customer satisfaction analysis tool that guides actions based on recommendation survey scores.
Do you want to know more or do an NPS survey? Our teams remain at your disposal to meet your needs! Contact us here:)
👉 Here are our 7 tips to improve your NPS
Answers to Common Net Promoter Score (NPS) Questions
What is the Net Promoter Score (NPS)?
The Net Promoter Score, often abbreviated to “NPS”, is a tool that allows businesses to assess customer satisfaction. To calculate this score, customers complete a simple survey evaluating their likelihood of recommending the business to a friend or colleague. The answers are then used in a specific formula that generates a single number, thus facilitating comparative analysis.
Who uses the Net Promoter Score (NPS)?
The Net Promoter Score has become a reference indicator adopted by businesses around the world. It is used to measure customer satisfaction and loyalty to a brand. With NPS, businesses assess the perception of their customer service and identify areas in need of improvement.
Why is the Net Promoter Score crucial?
The Net Promoter Score is of major importance, as it helps businesses assess the quality of their customer service, comparing them to their competitors. It is an essential tool for resolving problems, improving customer experiences, tracking customer loyalty trends, and increasing revenue through recommendations and upsell opportunities. The NPS is a compass that guides businesses to excellence in customer satisfaction.
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