The Ultimate Guide to Net Promoter Score®

Tanuj Diwan
Nov 06, 2019

12 mins read

Tanuj Diwan

Welcome to the age of customer experience. Here customers are willing to pay a premium price for better service. They are also willing to remain loyal to a business if the customer experience & Net Promoter Score is great. But, how sure are you that your customers will stay loyal?

Are you listening to your customers? Do you know what your customers like and dislike the most about your business offerings?

If you are a business that is keen on growth, customer feedback is too precious a treasure to squander. The simple process of collecting customer feedback and deep diving into it can throw insights about what customers like about your business, what they dislike and areas that need improvement to reduce customer churn.

Also, knowing what your customers feel about your business has other benefits as well. PwC in its Future of Customer Experience Survey 2017/18 found that customers are willing to pay a 16% price premium on products and services, plus increased loyalty if the brand delivers good customer experience. Additionally, they are more likely to try additional services or products from the same brand if the customer experience with one product or service is good.

It is here that customer surveys come into play. A targeted customer survey that asks the right questions to collect customer feedback can turnaround business fortune. It is here that NPS® comes into play.

NPS® is a vast topic and we have covered everything possible that you ought to know in this guide.

What is NPS®?

NPS® stands for Net Promoter Score®. It is an index that ranges from -100 to 100 which indicates how willing customers would be to recommend your business to others. It is considered as an approximate measure of a business’s ability to win and retain customer loyalty.

How is NPS® defined?

Net Promoter Score® focuses on the fair treatment of customers and employees. Unlike traditional accounting that focuses on short-term business profits, NPS® looks at the long-term picture. It focuses on how well-perceived a business is through the eyes of its customers and employees.

In simple terms, NPS is the business equivalent of the lesson most of us were taught as children: Treat unto others as you would have them treat you.

Walt Bettinger, CEO of Charles Schwab, the global financial services firm says so about Net Promoter Score® —

“The beauty of Net Promoter is that it helps to simplify complex issues and helps people to make the right decisions. It makes people ask themselves: Is this the right thing to do for our customers, and is it economically appropriate for the firm?”

From what Walt Bettinger has to say and from the overall use of NPS® it can be deduced that the metric helps in meeting four major business requirements.

History of Net Promoter Score®

NPS® is the brainchild of three entities:

  1. Fred Reichheld – A business strategist with specialization in loyalty marketing and loyalty marketing model
  2. Bain & Co – A global management consultancy that offers business consultancy services to public and private enterprises as well as for not-for-profits
  3. Satmetrix – An experience management software provider

The concept of NPS® was first introduced to the world through an HBR article “The One Number You Need to Grow” authored by Fred Reichheld.

The idea of NPS® was to replace the complicated process of running a typical customer satisfaction survey. Net Promoter Score ® boils down the process to a single question, the responses to which can be used to determine customer satisfaction, and in some cases employee satisfaction as well.

That single question for NPS® calculation is:

“On a scale of 0-10, how likely is it that you would recommend [your business name] to your friends, family or business associates?”

How to calculate NPS®?

NPS® is calculated with the help of surveys soliciting feedback from customers. The respondents to these surveys are classified into three:

  • Promoters – Customers/users who are extremely likely to recommend your product/service to others. They rank the highest in the NPS® score — in the range of 9 to 10.
  • Passives – Customers/users who are satisfied with your product/service. There is a high possibility for passives to switch loyalty to competitors for want of more features, pricing, service or any other factor. Their NPS® rating is in the range of 7 to 8.
  • Detractors – Customers/users who your product/service failed to impress. They may have been subject to poor quality products or services. In addition to switching loyalty, they might also resort to spreading negative remarks about your brand. They stand in the range of 0 to 6.

NPS® is calculated by reducing % of detractors from % of promoters.

Net Promoter Score-calculation
For example, if you have a 25% promoters, 55% passives and 20% detractors, your NPS® calculation will be as below:

25% promoters – 20% detractors = +5.

A positive NPS® is a good indication. However, an Net Promoter Score ® of 5 shows that there is plenty of room for improvement. Higher the NPS®, better customer loyalty.

A complete breakdown of NPS® surveys

Running an NPS® survey is scaling the Everest summit. There are several key aspects to it. To make the best use of an NPS survey, you must identify the right type of survey to run, the scenario for which the survey is going to be used and identify the question that will provide maximum responses.

Types of NPS® surveys

Before setting up an NPS® survey, you ought to know the various types of surveys that are available at your disposal. The two main types of NPS® surveys are:

  1. Relationship surveys
  2. Transactional surveys

1. Relational surveys

Surveys conducted to gauge customer loyalty (or their positive relationship) with the brand is referred to as relationship surveys. They ask customers about the overall experience of dealing with the brand, their satisfaction levels and also suggestions for improvement. They are conducted in the frequency of quarterly, half-yearly or yearly.

Eg: An on-demand video streaming service sending a monthly survey requesting feedback about its service quality.

2. Transactional surveys

Transactional surveys aim to investigate the customer feedback for each transaction. The primary purpose of thee type of surveys is to figure out the means of improving customer experience. They are usually sent immediately or within a day or two from the completion of the transaction. Transactional surveys are apt for those companies which have a limited number of interactions with the customer and hence limited opportunities to seek feedback.

Eg: A five-star hotel seeking feedback from a guest who completed a stay recently.

How to create an NPS® survey

Now that you know what kind of surveys you can go after, it is time to create an Net Promoter Score ® survey. Be it a relationship survey or transactional surveys, these steps remain the same.

  • Give a title for your survey

The title should be short, crisp and self-explanatory. Your customers should ideally understand the motive of the survey from the title itself. You can use creative titles, provided they do not make the motive ambiguous.

Some suggestions for an NPS® survey title are:

  1. Joe, please share your thoughts
  2. Joe, we’re improving, could you help?
  3. Your feedback helps make us better
  4. How was your experience?
  5. Did you buy from us recently? how was the experience
  • Add a brief description

A brief description should help customers understand better why the survey is being conducted. It can also be used to specify whether the survey pertains to a specific transaction or is a periodical one that evaluates the customer experience over a period of time.

  • Add the NPS® question

Like we discussed before, an NPS® survey will typically have only one question. Jump to this section to know how to identify the right Net Promoter Score ® question for your survey.

  • Add a thank you note

Your customers are taking their precious time and effort to give you feedback. That feedback is going to help improve your product/service. So it is basic etiquette to thank them for taking the time to give feedback.

How to create an NPS® question that will generate the right responses?

The NPS® question is the epicenter of a survey. Its tone and structure will determine how customers will give their feedback. Also, there are different types of NPS® questions for different scenarios. Some such questions and scenarios in which you can use them are listed as below:

Scenario 1:

When are just getting started with NPS® surveys, you can always stick to the classic question

“On a scale of zero to ten, how likely are you to recommend our business to a friend or colleague?”

The benefits of these questions are:

  • Ideal question for the first NPS® survey
  • Helps breaks the ice with your customers
  • Gives a bird’s eye view of your customer sentiments

Net Promoter Score

Scenario 2:

When you want feedback on a specific product or service of the company. In the previous question, replace the term ‘company’ with the product or service name.

“On a scale of zero to ten, how likely are you to recommend our [product or service name] to a friend or colleague?”

The benefits of this question are:

  • It focuses on a single product or service
  • The responses will be targeted
  • Helps identify specific features/offerings that need improvement

Scenario 3:

When you want to use NPS® surveys internally to gauge employee satisfaction.

“On a scale of zero to ten, how likely are you to recommend [company name] as a potential workplace to your friends?”

The benefits of this question are:

  • It helps identify active, passive and detractor employees
  • Helps identify pain points for employees
  • Helps create an organizational culture that fosters employee happiness

Follow-up questions to supplement customer feedback

The objective of a Net Promoter Score ® survey is to collect customer feedback in the form of a rating. But, why did each customer give the specific rating that they gave? Are there specific reasons that have motivated the rating. Open-ended questions that follow the NPS® question help identify the same.

Follow-up questions like the ones below help with that:

  • What is the primary reason for your score?
  • What was missing or disappointing in your experience with us?
  • How can we improve your experience?
  • Which features do you value/use the most?
  • What do you like most/least about (company or product name)?
  • What is the one thing we could do to make you happier as a customer?

Net-Promoter-Score-Follow-up-questions

How to use responses to create retention models

As a business that is running the Net Promoter Score ® survey, you ought to respond after the customer finishes the survey. This typically comes in the form of a ‘Thank you’ message. Crafting the right ‘Thank you’ message is vital because their tone and messaging can help nudge the customer turn from being a detractor to a passive and ultimately to a promoter.

Here are a few thank you messages that you can use for your promoters, passives, and detractors.

For promoters:

“Thanks for taking the time to give your feedback. We are thrilled to have you as a high-value customer. Your feedback will help us come up with product/service improvements that will make your experience better than what it is now.”

How does the note helps retain customers who are promoters?

The note explicitly mentions that the customer is a high-value customer. This gives the customer the impression that they are exclusive and are valuable to the company more than other customers. This privilege makes them feel more attached to the brand and also persuades them to promote the brand with their friends and colleagues.

For passives:

“Thanks for taking the time to give your feedback. We will work on each and every suggestion that you have given. You will see a significant improvement in our offerings in the days to come.”

How does the note help retain customers?

The note establishes the company’s notion to work on the customer’s feedback. This will convince the passive customer that all their pain areas have been acknowledged. The last statement gives an assurance that things will change soon. This helps reduce the possibility of passive customers looking for other alternatives. When the improvements happen and their level of satisfaction soars high, they will ultimately turn into promoters.

For detractors:

“Thanks for taking the time to give your feedback. We will work on each and every suggestion — positive and critical that you have given. Our team might reach out to you in the near future to understand more about the not-so-great experiences that you might have had. Be assured that we will do everything possible to deliver great experiences to you in the near future.”

How does the note help retain customers?

At the onset, it establishes the fact the business acknowledges both the positive and critical feedback given by the customer. It also indicates that the team might reach out personally to identify what went wrong with each interaction. The final statement gives the assurance that the feedback will be used to improve the experience.

Top NPS® survey tools

An NPS® survey cannot be orchestrated manually. It needs the aid of efficient tools that reduce manual effort and maximizes productivity. Also, the tool should make it easy for customers or employees to give their ratings and suggestions easily.

SurveySensum’s Net Promoter Score® is one such top-ranking tool that helps businesses of all scale create NPS® surveys without breaking into a sweat. You can run NPS® surveys through the omnichannel route that encompasses chat, email, web, and SMS. The unique attribute about SurveySensum is that — it is powered by Artificial Intelligence. Its added intelligence helps listen, interact, engage and turn customers into superfans.

Apart from helping you create and run NPS® surveys instantly, SurveySensum also helps predict customer churn, uncover hidden patterns in customer behavior, and manage your customer experience centrally.

Want to know how to measure and improve Net Promoters Score for your organization, Talk to us!

How much did you enjoy this article?