Net Promoter Score: Definition, Calculation and Questions
- August 6, 2019
- 4 min read
12 years of experience in online marketing
What is a Net Promoter Score?
A Net Promoter Score, or NPS, is a marketing tool used to measure people’s loyalty towards a company or a brand and their willingness to recommend the company or brand’s products to other people. NPS surveys are widely used to measure an employee’s loyalty and they are also an important instrument to estimate the company’s revenue growth potential.
Net Promoter Score Survey Question
The simplest Net Promoter Score survey may consist of just one question. Habitually, the scoring scale lays between 0 and 10.
How likely is it that you would recommend our company/product/service to a friend or colleague?
0 - not likely at all, 10 - extremely likely
Net Promoter Score Calculation
Depending on the given score, all respondents can be divided into three groups:
|Promoters||9 - 10||These are your most loyal customers, ready to promote your products, participate in your company's forums, and help other customers to implement and use your products more effectively.|
|Passives||7 - 8||These customers are loyal, but not enthusiastic about your products. They may equally get converted into Promoters or Detractors. Working with the group is especially important when the number of people in the group is relatively high.|
|Detractors||0 - 6||These people are unlikely to promote your product; in fact, they are very likely to give it a negative review. They are very often unsatisfied customers who are very sensitive to competitive offers.|
Net Promoter Score (NPS) = % of Promoters - % of Detractors
Example: 200 people answered your NPS survey question.
Promoters: 20 people gave scores of 9 and 10. The % of Promoters = 10%
Passives: 50 people gave scores of 7 and 8.
Detractors: 130 people gave a score between 0 and 6. The % of Detractors = 65%
Net Promoter Score (NPS) = - 55%
The NPS range is from -100 (all respondents fall into the Detractors group) to +100 (all respondents fall into the Promoters group).
What is a Good Net Promoter Score?
NPS global standards treat +50 as ‘excellent’ and +70 as ‘world class’. Any NPS that is above 0 is considered to be ‘good’ as this means that the number of loyal customers is higher than the number of disloyal. Always compare the NPS you’ve got against your previous score and competitive benchmarks, which may vary drastically depending on the industry. Knowing what similar companies have achieved helps you to set realistic goals for improvement.
Here’s some 2019 NPS benchmarking data provided by satmetrix.com.
Average NPS by Industry:
|Software and Apps||30|
NPS Leaders by Industry:
|Smartphones||Apple and Samsung||45|
Tips and Tricks from Growth Hacking Specialists
NPS surveys are often mixed up with Customer Satisfaction surveys. It’s important to differentiate these two types of research because they actually measure different notions. Even the most eager evangelists of your company may not be completely satisfied with your products and may provide valuable feedback on how to improve them.
When conducting NPS surveys, use additional open-ended questions and ask your respondents about the reasons for giving this or that score.
The question you can ask your Promoters is:
‘That’s great to hear. Can you tell us why you gave this score?’
And you may address your Detractors in the following way:
‘We are sorry to hear that. Can you tell us why you gave this score?’
Many start-up companies try to use the Net Promoter Score to draw a conclusion as to whether they have developed a product that is in demand on the market. Sean Ellis, a co-author of the ‘Hacking Growth’ bestseller, advises startuppers to use a different question for this purpose. In his opinion, to measure the level of demand for a young, developing product, it’s more suitable to ask: ‘how would you feel if you could no longer use our product tomorrow?’ The predefined answers are ‘very disappointed’, ‘somewhat disappointed’ ‘not disappointed’ or ‘I don’t use this anymore’.
According to the research Sean has conducted on more than 100 start-ups, when less than 40% of the respondents are ‘very disappointed’, the start-up may face problems with growth. Start-ups with 40% and higher have good growth potential.
AidaForm is a cloud-based service which allows you to create any type of online survey and poll within several minutes without coding. It also features a wide variety of fields and ready-made templates to use in your feedback, customer satisfaction and customer development research. Read more articles about Likert Scales and Different Types of Rating Scales, or create your AidaForm account and start you first surveys today.