How likely are you to recommend [company / product / service X] to a friend or colleague?
Respondents give a score between 0 (not at all likely) to 10 (extremely likely), and depending on their response, customers fall into one of the following 3 categories for establishing an NPS score:
Promoters are those who respond with a score of 9 or 10 and are usually loyal, passionate and enthusiastic customers who will continue to purchase the company’s products and drive their growth by referring other people. They can therefore be considered as true brand ambassadors by, for example, sharing positive opinions online, engaging on social networks and recommending the product or service to their friends.
Passives are those who respond with a score of 7 or 8. They are satisfied with your service or product, but not happy enough to make recommendations and be considered a promoter. They are therefore vulnerable to competitive offers.
Critics respond with a score of 0 to 6. These are unhappy customers who are unlikely to buy your product again, and may even discourage others from buying from you. They can therefore harm your brand and hamper your business growth through negative word-of-mouth. Their loyalty to your brand is so low that they are likely to stop being Iran WhatsApp Number List customers of your business. It is the detractors who drive up the churn rate of companies.
How to calculate the Net Promoter Score?
Calculating the NPS is relatively straightforward. Just subtract the percentage of detractors from the percentage of promoters, ignoring the percentage of passive.
In other words: NPS =% of promoters (-)% of detractors
For example, if 10% of respondents are detractors, 20% are passive, and 70% are promoters, your NPS score is: 70-10 = 60.
Absolute and relative NPS scores
To understand what a “good” level of NPS score is, we must first examine and compare the two ways of thinking about NPS:
The absolute NPS
Absolute NPS uses your score as a marker against the NPS scores of all industries, that is, any other business.
The relative NPS
Relative NPS, on the other hand, sees your score as a benchmark against other companies in your industry. This type of NPS therefore allows you to see how you are doing compared to your competitors and it gives you a valuable indication of the level of customer satisfaction achieved by your company.
So, is the goal of all businesses necessarily to aim for an NPS score of 100? Yes and no.
Yes, because any entrepreneur wants to turn as many detractors as possible into promoters, and thus get closer to the perfect score, +100. To do this, you need to improve your customer journey and shopping experiences so that your customers perceive that you value them and that you pay them attention.
No, because it is actually next to impossible to achieve an NPS score of +100. Such a score would indicate that all of your customers are completely satisfied with your products and the services provided by your business. Even the most successful and popular companies fail to hit that number.
In fact, the inventors of this concept of Net Promoter Score recommend that the NPS be used as a kind of “health check-up” for companies, which should be monitored regularly to see if the needs of your customers are. satisfied. This performance indicator can only be useful, however, if you have the means to take action on it, such as improving the customer experience or the performance of your product.
What is a good NPS score?
The creators of NPS, Bain & Company, suggest the following interpretation for NPS scores:
Above 0 is good
Above 20 is fine
Above 50 is excellent
Above 80 is the top level
In absolute terms, any score above 0 could be considered good, as it means that it has more promoters than detractors. However, in the perspective that what we have seen previously, it is a minimum level which indicates that you have room to progress. To be above the average, a score above 50 is necessary, but for that, it is still necessary to succeed in transforming the maximum number of detractors into liabilities and promoters.
It is also important to note that several factors can have an impact on your absolute NPS score:
The format of the NPS survey
Your NPS score results may vary due to how the survey was designed. Here are three factors that can impact the results:
Is your survey short and to the point?
A low response rate may occur if the survey is too long or the questions too complex.
2-? Did you use questions that were too leading?
If you phrase your questions in a way that is too suggestive, that is, one that involves answers that work in your direction, your NPS score will necessarily be skewed.
3-? Is your survey process fundamentally biased?
If you have offered any rewards, such as discounts or coupons to entice respondents to complete your survey, the value of your NPS score will be difficult to determine. There are other types of bias that can take different forms, and where unspoken pressure is exerted on customers, such as during a phone call or a face-to-face interview. It may be more difficult to receive negative feedback from customers due to what is called confirmation bias.
Different degrees of tolerance for each client
There is no company capable of completely satisfying 100% of its customers, because each customer is unique and has distinct needs.
So your customers have different tolerance levels when faced with negative shopping experiences. Some may get angry while others may take it with more philosophy and understanding.
The sample size of a survey can impact your NPS score. With a limited sample, you are more likely to get biased results than with a larger sample. Try to aim for a sample size above 1000 people, minimum.
Conclusion: regularly measure your NPS
Continuous measurement of your progress is essential so that you can make real-time adjustments in all aspects of your job.
Some companies follow a process of measuring NPS that occurs at regular intervals, such as every six months.
Regardless of how you decide to measure your NPS score, this metric will give you valuable insight into what is working and not working in your business.