Originally posted on Bluebird Network

When it comes to measuring customer loyalty, satisfaction, and advocacy, businesses use various metrics and tools. One of the most popular and effective metrics is the Net Promoter Score (NPS), a customer experience metric that measures the likelihood of customers recommending a brand or product to others. In this blog post, we’ll cover the why, how, what, and when of NPS.

Why use NPS?

NPS is a valuable metric for several reasons:

  1. It’s simple and easy to understand: NPS is based on a single question that asks customers how likely they are to recommend a brand or product to others, on a scale from 0 to 10. This makes it easy for customers to provide their feedback and for businesses to collect and analyze the data.
  2. It’s actionable: NPS provides businesses with a clear indication of their customers’ satisfaction and loyalty, and allows said businesses to identify the drivers of both promoters (customers who give a score of 9 or 10) and detractors (customers who give a score of 0 to 6). This information helps businesses improve their customer experience, retain loyal customers, and win over new ones.
  3. Businesses can use it as a benchmark: NPS can be compared across different brands, industries, and regions, allowing businesses to see how they stack up against their competitors and the market average. This benchmarking helps businesses set realistic goals, track their progress, and stay ahead of the competition.

How to calculate NPS?

To calculate NPS, businesses need to follow these steps:

  1. Ask the NPS question: “On a scale from 0 to 10, how likely are you to recommend the brand/product to a friend or colleague?” This can be asked via follow-up survey to customers.
  2. Group the responses into three categories:
  • Promoters: customers who gave a score of 9 or 10. They are loyal, satisfied, and likely to recommend the brand/product to others.
  • Passives: customers who gave a score of 7 or 8. They are neutral, satisfied but not necessarily loyal, and may or may not recommend the brand/product to others.
  • Detractors: customers who gave a score of 0 to 6. They are unhappy, dissatisfied, and likely to share their negative experience(s) with others.
  • Calculate the NPS by subtracting the percentage of detractors from the percentage of promoters: NPS = % Promoters – % Detractors

The NPS score can range from -100 (if all customers are detractors) to +100 (if all customers are promoters). A positive score indicates that the brand/product has more promoters than detractors, while a negative score indicates the opposite.

Overall NPS Ranking

70 or more: Outstanding

50 to 69: Strong

49 or less: Needs Improvement

Below 0: Red Flag!

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