If you’re intimidated by the term “net promoter score,” (or NPS for short) don’t be.
In fact, we’ll treat you to an early definition: an NPS simply refers to how likely someone is to recommend a brand/service/product to someone else.
See? That wasn’t so bad. Now, for the fun part –- calculating your net promoter score.
In this ultimate guide, our online survey company thoroughly explains everything you need to know about this widely used metric.
- What is NPS?
- How is NPS calculated?
- What is a good NPS?
- How is NPS collected by brands?
- Should you ask only NPS or other questions?
- What are the benefits of measuring NPS?
- What are the drawbacks of NPS?
- What other KPIs should you track in addition to NPS?
- How can you improve your NPS metric?
- How often should you 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:
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.
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.
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 towards the negatives and things that they don’t like about the brand.
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.
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.
These surveys are administered through a panel, usually through competitive benchmarks, and are sent via email.
Luckily, they are cost-effective and provide insights fast.
💡 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.
The short answer? No!
NPS should not be the only metric that you're measuring as part of your survey.
While NPS is important for customer satisfaction and loyalty, you can’t forget about the other metrics out there that offer similar results.
These metrics include:
- Customer satisfaction
- Likelihood to recommend
- Correlation and regression
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.
Going a layer deeper here is also useful. For instance, respondents can be asked detailed questions about their actual experiences.
Beyond that, there’s a 0 to 10 likelihood to recommend scale. This is always followed with an open end to ask why the respondents chose the ratings they did?
Correlation and regression is also a great add-on, analytical technique 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: Don’t just focus on a net promoter score question set. Additional metrics like customer satisfaction and likelihood to recommend, among others, offer helpful insight.
Right off the bat, a big benefit of measuring your net promoter score calculation is for comparison purposes.
Since so many companies are measuring NPS, this is ideal to see where you sit against those brands (and competitors). This is also a great internal metric for comparison purposes as you build out your scorecards and KPI trackers.
It's easy to comprehend and easy to measure.
Subtracting the percentage of "1s" through "6s" from the "9s" and "10s" is an easy calculation.
Another benefit of measuring NPS is that it gives you a true picture of 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.
💡 The Key Takeaway: While there are many benefits to NPS, understanding benchmarks and accurate data are two of the most important.
Some may feel NPS is a little bit overused, due to its popularity.
Meaning, that it's not always a great fit for every brand. 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.
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 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.
💡 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.
Another useful KPI to track is CES or customer effort score. Basically, this is a 1 to 5 Likert scale of how easy it is to do business with your organization.
Then, we have likelihood to repurchase. This is a very basic kind of yes or no question–do you plan to purchase our product or service again in the next 12 months?
To get the most out of calculating your net promoter score, including other KPIs is essential.
💡 The Key Takeaway: Additional KPIs such as CES and likelihood to repurchase should be taken into account when measuring NPS.
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.
Put simply, it’s key to locate detractors, but don't spend a significant amount of time and money to have them become a 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.
It all depends on your business model. Obviously, there are different kinds of trends in terms of measuring NPS regularly.
This often occurs in the retail environment, or after you make a purchase. 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 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.
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 it 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's 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, building in 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.
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 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.