Net Promoter Score: How to Discover Your Brand’s Promoters

The Net Promoter Score, also known by the acronym NPS, is an indicator that measures how satisfied customers are with the products and services a brand offers.

We’ve already explained the importance of customer care and how essential it is to adopt an approach that puts customers at the center. That’s because they’re the foundation a company’s success is built on.

An unhappy customer would never dream of recommending you to others, and wouldn’t come back to buy again.

That’s why, over time, benchmarking methods have been developed that let organizations assess whether their skills are adequate for their business and their business processes.

This all happens by comparing yourself against the top players in your industry, who are used as a reference point to understand where you should improve.

Specifically, the Net Promoter Score was created in 2003 by Fred Reichheld, a bestselling author and one of the leading experts on customer loyalty. It lets you estimate how loyal a customer is and how likely they are to buy again and recommend your products to a friend.

In this article we’ll look at how to calculate the Net Promoter Score and why it matters to discover who your brand’s promoters are.

Net Promoter Score: How Do You Calculate It?

It’s a tool used to measure how satisfied a customer is with a company and its products. More specifically, NPS is a value obtained through a specific formula that lets you estimate the percentage of customers who would recommend the same brand to other people.

This percentage comes from a simple, direct question: “how likely are you to recommend my product to a friend or colleague?”

Customers give a score from 0 to 10 and get sorted into 3 different categories:

• DETRACTORS are those who gave a score from 0 to 6. They wouldn’t buy your products again and could damage your brand’s reputation by leaving negative comments.

 

• PASSIVES: customers who give a score between 7 and 8. These are people who are generally satisfied with their purchase but would easily switch to a competitor if a better offer came along. They don’t spread negative comments, but they’re not motivated or enthusiastic enough about your products to actively promote them.

 

• PROMOTERS: those who give a score between 9 and 10 and are very likely to recommend your product to others. These are your regular customers who choose you because they love what you do, and who express their enthusiasm by inviting other people to buy too.

Calculating NPS is very simple: just subtract the percentage of detractor customers from the percentage of promoter customers:

NPS = (Number of Promoters – Number of Detractors) / (Number of respondents) x 100.

The first interesting thing to note is that the number of passives isn’t counted, since it has zero effect on the calculation.

There are many free tools online for doing the calculation by hand, while many feedback and analytics tools have this feature built right in.

What you get from the calculation is a number that ranges from -100 to 100 and gives you important information for assessing where your company and your brand stand.

How Do You Read the Net Promoter Score?

The Net Promoter Score can be read as an indicator of your company’s health. Having a high number of promoters is added value for a brand, because they act like an internal resource — a human dispenser of marketing and advertising.

But what should you do if your score is negative instead?

Imagine starting from a Net Promoter Score of 45. How should you behave?

First of all, compare yourself against the other companies in your industry and within your operating range. What scores do competitors similar to you get? This will let you assess whether the path you’ve taken is actually the right one, and what corrective actions to put in place.

You can also ask your customers to rate your competitors’ products. And then probe one level deeper: ask why.

This will let you understand what motivates a customer to prefer one service over another — especially in the case of passive customers, who sit halfway between potential detractors and regular customers.

It follows that the ideal moment to ask the fateful question is right at the final stages of the funnel, that is, when a customer has just completed a purchase successfully, so they’re inclined to give a positive rating.

Reading the Data Within Its Context

To make the most of your NPS data, you need to place it within a specific frame of reference. If, for instance, you’re asking for feedback on a new product or service you want to test, it’s fair for customers to express some doubts. It’s therefore a value to monitor, one that shouldn’t be read in absolute terms. What matters, then, isn’t just what shows up today, but how it evolves over time.

It’s also important not to lose sight of the fact that the Net Promoter Score needs to be considered within a broader outlook that treats customer wellbeing as a founding value of business processes.

Without a company-wide commitment to improving Customer Experience, NPS will only be the tip of the iceberg. The company’s own employees need to be able to act promptly on customer feedback, proactively working to resolve their doubts and reassure them.

One of the things that makes this indicator so successful is how easy it is to use. Even so, you shouldn’t run the risk of using this tool too simplistically.

The Net Promoter Score, however valid, doesn’t tell you what needs improving. It’s based on ratings from current customers, but it gives no direction on how to acquire new ones.

That means it’s up to you to interpret the data and ask yourself the right questions, investing in promoting the aspects that get positive ratings.

You can work every day to monitor and address every negative comment you receive online, but until you decide to act on understanding the reasons behind them and adapt based on what the data tells you, the Net Promoter Score will stay just a small negative number among your company’s statistics.

Above all, what you should never lose sight of is that the goal is to focus on meeting customers’ needs, since the loyalty they show toward a company — the loyalty that drives them to recommend its products to others — is the direct result of a satisfying relationship.

If you’d like to learn more about how to put NPS to work inside your business processes and improve customer experience, contact us for a consultation!