What is Net Promoter Score? How to Calculate it?

Net Promoter Score (NPS) is crucial while measuring customer loyalty and satisfaction, but sometimes it can be difficult to understand. In this blog, we’ll discuss what NPS is, outline different ways to calculate it, explore how it can be used, and provide practical guidance on how it can serve as an invaluable tool for better understanding your customers.

Contents

How to Get NPS Feedback Through Surveys?

Net Promoter Score is an important metric to evaluate the growth of your business. Therefore, if you want a net promoter score calculation and track NPS for your business, you must run an NPS survey to gather sound feedback from customers in the form of website pop-ups.

You can collect the feedback while the customer is on your website or gather it later on after the customer’s experience with your brand. You can collect feedback through website or email surveys :

1. Website Survey

You can collect the NPS feedback while the customer is on your website. For example, you can ask him for feedback after he completes a purchase or simply asks about his experience before he leaves or exits the site. That means you can trigger the feedback on the conversion pages. It will let you know their responses, and you can improvise them further.

You can ask them the standard question for NPS: How likely would you recommend us to your friend or colleague on a scale of 0 to 10. You can carry on asking further questions based on their responses.

For example – If they fall into the category of detractors, then ask them about their negative experience and what shall you do to improve it. Secondly, if they fall into the category of promoters, you can ask them what they like most about you.

2. Email Survey

Email surveys are a bit of a lengthy process of collecting NPS feedback from the customers as they have to open up the mail and navigate to a different page and then fill up the survey. But at least, they get time to think and reconsider the experience they had in context to your brand. That’s how they are more likely to recommend the product to their acquaintances.

What Type of Questions Can You Ask in The NPS Survey?

Although there is a standard question in which you ask your customers to collect feedback, you still can optimize it as per your requirements. Let us see some of the questions you can ask :

1. How likely would you recommend us to a friend or a colleague on a scale of 0-10?

It is a standard question you ask your customers to get the numeric response, but you can make changes as per your needs.

2. How likely would you recommend us to your friends or colleagues based on your experience with us (on a scale of 0 to 10)?

You can trigger this question based on the action performed by the customer, such as when he places a product or when the customer fulfills the order.

3. How likely are you would recommend our product to friends or acquaintances, now that you have received our product?

It could be the next question in the row after the customers receive your product. You can ask them to rate your services, the product range, website experience, or the delivery process.

4. How likely would you recommend us to someone like you?

You can often ask the customer this question instead of the standard question when the product does not have a massive appeal. It would trigger the customer when he would put himself in others’ shoes.

Apart from the above quantitative questions, you can ask the qualitative questions from the customers:

You can ask the customers many qualitative questions after the quantitative ones that would help you implement the changes in your strategies. If a customer gives you a score below 8, you can ask them how you can improve your services. Below are a few examples :

a) Why would you not recommend us?

In a follow-up of your response, you can ask them to justify their score by asking the above question if they give a minimum score.

b) What did we do well?

Ask them a multiple-choice question, that helps you clarify their score. In turn, you can keep on focusing on that specific area.

c) What can we do to impress you?

Ask such open-ended questions to ask users straightforwardly what you must improve to make them happy.

Once you ask the NPS feedback from the customers, learn how you can read the NPS results in the next section.

How To Read The NPS Results?

You need to look at NPS results to give a boost to your business growth.

Below are the ways :

1. Introspect the segments

First, create different segments of customers based on their age group, preferences, gender, loyal customers, and so on. When you get the customers’ NPS scores, you just have to analyze the results as per the created segments and this is how you can adopt a different approach to different types of customers.

2. Keep track of performance over time

It is a fact that a single NPS survey will never get satisfactory results. You have to keep a record of the ups and downs you are receiving in the responses. If you get good responses in one survey, you can keep it as a benchmark and look at other survey results. It will give a good overview of your business and how far you are improving the services or diminishing it.

3. Focus on the results of follow-up questions

If you are going just with the survey’s numeric scores, it won’t help you much with improving your services. You have to focus on the qualitative questions’ responses as to why customers give you a specific score and the reason behind it.

What is a Net Promoter System?

The net promoter system is a complete open-source that helps you look into the blocks you are getting in the results and how you can use them to get sustainable results :

1. Customer-centric approach

If you are only focusing on getting maximum revenues and profits based on your NPS results, you are going nowhere. Focus on how to support customers and give them a remarkable experience in every field.

For example, if you provide support to the customers via calls or emails, the call centers focus only on the number of calls the agents have to complete per hour or per day. Instead of focusing on this approach, use the NPS feedback to ask the customer about their CUSTOMER SUPPORT experience and give them ratings. Further, ask them how you can improve your customer support services.

2. NPS feedback stands out from other metrics

There are various approaches out there that let you know customer engagement and loyalty. But net promoter score calculation surpasses them all. You can see where you stand out in the eyes of customers and give your higher officials a record of data-driven changes. Accordingly, you can make out the changes and revamp your strategies.

3. Create changes based on NPS results

Net promoter score calculation results help you address the problems, directing your employees to make the necessary changes in the policies and products.

Below are the three steps for how you should do the changes based on NPS results

Use the NPS results to reach out to unhappy customers by putting all your efforts into creating memorable experiences.
Conduct meetings and conversations with your teams to address customers’ lower scores and develop strategies that are more custom-centric.
Lastly, implement the changes in the products, policies, and campaigns. In short, put all your decisions into action.
Evaluate the effectiveness of the campaigns.

What According to You is a Good NPS Score?

The range of NPS surveys varies from –100 to + 100. It differs in different industries differently as to how they take the scores as good or bad. For some industries, 60 plus is a good score, while it may not be that good for others.

The scores depend on how well you are serving your customers and how much customers are satisfied with your services. For example, suppose company A earns a score of 40 and is a bestseller amongst its competitors than the score of 60, which another company receives. That means that the customers are more loyal to company A and are buying more from that company.

What are The NPS Benchmarks By The Industry?

The absolute NPS scores do not matter so much as the relative NPS score does. Therefore take a look at your NPS scores and see where it stands within your industry. You have to find the industry average for it and compare the Net Promoter Score benchmarks. But the benchmarks vary according to different countries. These would be different in the U.S. and India.

Below are Some Factors That Affect NPS Benchmarks:

As stated above, the average promoter score varies from industry to industry and country to country. Therefore, you need to evaluate scores if they are making any sense in your business or not.

These are the following factors that can affect the benchmarks

1. Upgradation in experience and results

Companies are coming up with new and innovative ways to serve customers. Technology and expertise play a significant role in it. When an industry leader or a hierarchy comes up with the changes, the competitors either follow it or never recover.

2. External forces

External factors such as the dip in the stock market and other financial services can affect the industry’s net promoter scores. Apart from the financial factors, the economic and political events also can affect the NPS scores.

3. Competitive blues

Many industries are fighting against each other to balance the demand and supply factors. These industries then focus more on establishing a good relationship with the customers, directly or indirectly affecting the NPS scores.

How to Get a Higher NPS Score?

Ask yourself what impact do the NPS scores make on your business. Does a low score nudge you to take action, or does a good score deviate from your path?

Take a look at the factors to stand you up for getting a higher NPS score

1. Ask follow-up questions

The standard question for the net promoter score is not merely limited to the numeric score you get, but you get to know your customer at a deeper level. So always ask to follow up questions such as :

How does this experience of recommending us to increase or diminish your livelihood?
Ask the reason why it increases your livelihood.
What more you should do to improve your experience.

2. Rebuild relationships with unsatisfied customers

Know what your customers need by having conversations with them. You can know about it in the follow-up questions and make definite changes in the policies or products if the customer is dissatisfied with that.

3. Train the employees

Take the users’ concerns seriously and assign your employees to put up with great efforts to satisfy the customer. If they have legitimate concerns make sure you satisfy the customers to the tee and make out the solutions for it.

4. Forward the customer insights

If the customers are having issues with specific policies. Then it’s your duty to put it forward to the concerned departments so that they take good care of it and try to rectify it.

What is the Formula for Net Promoter Score Calculation?

You can calculate the NPS with the help of three simple methods :

Via a spreadsheet excel
From An online calculator.
With a survey tool.

Let’s take it one by one :

1. How to calculate NPS in Excel or Google sheets?

Put your NPS data into the excel or google sheets in the form of numbers ranging from 0 to 10 in the rows and categorize them into detractors, passive, and promoters categories. Now you can do net promoter score calculation in excel :

First, add up all the promoters i.e., who have scored the highest between 9 and 10.
Add up the detractors, i.e., who have responded between 0 to 6.
Now, divide the number of promoters by the total no. of responses to calculate its percentage.
Next, divide the number of detractors by the total number of responses to calculate the percentage.
Lastly, Subtract the percentage of detractors from the percentage of promoters.

2. How to calculate NPS with an online calculator?

First of all, add the number of responses. Now calculate the responses via an online net promoter score calculation. You can do it with the help of any software’s NPS Calculator.

3. How to calculate the NPS with the survey tool?

The best part of a survey tool is that it has an in-built function that automatically calculates the NPS. There are many benefits of this auto-calculator such as you don’t have to export the data, and you can track the daily NPS fluctuations.

How To Analyze Your NPS?

Net promoter score is a powerful tool and metric that indicates how much customers like you and adore you. If you ask the new users, you can know more about them and provide them with what they need. Therefore, view your NPS to see where you currently stand and compare it against your industry’s benchmarks. Remember, NPS is not just a number; you can get valuable insights from it.

Ask yourself the following questions to analyze your NPS effectively:

1. How can you dissect your respondents for each point on the NPS scale?

First of all, you need to break down your customers into detractors, passives, and net promoter score calculation or your NPS score. You can also make a bar chart to see how many of the respondents are giving each score. Then, check out the following facts :

See if your detractors are evenly distributed or not, where they are lying between the score of 0-6.
Take a look at the passive customers because you have much scope there to turn them into loyal ones.

Create as many questions you want to create that enable you to see the required patterns and answers.

2. What does each score stand for and how does one differentiate the other?

Each score or number has different annotations and significance. So, you cannot assume why a customer gave you 4 or 5. Therefore you can ask them directly about the scores they gave you. You can analyze why grade 4 is different from grade 5.

3. How to categorize the customers into different market segments?

Know your customers better by breaking them down into different segmentation. For instance, you can place customers of a specific age under demographic segments, and you can put customers of a particular region in geographic segments. The segment will help you serve the customers better with the right campaigns.

4. How can you define the tenure of customers based on NPS?

It is inevitable that customers who give you a higher score are more likely to stay longer with you and be loyal to you than the other ones. These loyal customers will be more likely to give recommendations to their friends, colleagues, or acquaintances. But if you are not able to figure out the scores effectively and cannot decide which customer will be loyal to you or not. You can ask a qualitative question to get more clarification.

5. How to correlate the NPS score with the business revenues?

If you are good at calculating the economic returns from your NPS feedback scores, you can quickly identify the economic returns you will have from the NPS results. Not everyone has the knack of finding this formula for getting instant results from net promoter score calculation, but you still can try and see how you can maximize ROI through the higher NPS scores.

Like the above questions, you can come up with other questions to maximize your revenues and profits.

How Can NPS Help Your Business Grow?

NPS and business growth are directly correlated to each other. It can help you boost customer engagement, which will help you increase your conversion rates and revenues. Let us see how can you multiply your business growth :

NPS allows you to improve

By tracking the NPS results, you can check out how different segments give feedback. You can check out the following facts :

How psychographic or demographic segments are responding?
Cohorts responding to a specific campaign or message, how?
How customers are using certain products or services?

Now identify what needs to be changed or improved.

a. Blend the goal of profit and custom support

Revenues and profits are essential factors in asking for customer feedback through NPS surveys. But is it the only factor that is important? The answer is NO; you need to create a customer-centric approach to deliver customers what they need. Both of them can take your business run for the long term.

b. Get economic returns from NPS

Don’t rush in or feel disappointed with NPS feedback. Even if you have detractors, you can still convert unhappy customers into happier ones with the renewal of your strategies.

What are the Strategies to Improve Your NPS?

You must be curious to know how can you serve the customers well with NPS results and what strategies you can attain to improve your NPS :

1. Dig more in-depth with the customer support

Try to dig deeper with the customer responses as to why they have given you a lower score. You can ask them questions through the mail, through direct interviews, and follow-up questions. Strive harder to focus on providing the best customer support. Let your managers reach out to your detractors in case you have any and solve their complaints earnestly. Show them that they are the center point of your attention.

2. Incentivize your team to serve customers

In case you have many detractors, make sure you don’t bang your head into earning more profits by telling your teams to overwhelm customers through various calls as to why they do not like your services. But be customer-centric and try to push your teams to serve customers by providing them more incentives.

3. Conduct meetings and discussions

These meetings and discussions are generally known as huddles. You need to conduct them frequently to look into the complaints of customers and resolve them quickly. In case you have got escalations, discuss with your team to come up with the desirable solutions.

4. Improve your team

The NPS results indirectly indicate: what your employees and team are doing to support the customers and how they give them a priority. If you have got promoters, then well n good, but you can still make it up to turn the customers into loyal ones. If you have got detractors, then again, it is your responsibility to take a more in-depth look at what your customers desire and what loopholes you have in your strategies.

5. Analyze the root causes of NPS

Your company might have different departments, but one of the departments is gaining more promoters while the other has more detractors. In such scenarios, see whether the services you have provided are up to the mark or what areas lack improvement in them. Analyze the root causes and come up with key solutions for them.

6. Create changes and see what happens

It is not possible to change our entire site or the whole product after a lot of complaints. Still, you can inevitably focus on improving the policies, product delivery, and messages. You can make the necessary changes and then see the post changes score. You can compare the scores with the previous scores. If you see a significant improvement, it would be good; if not, you can again review your strategies and develop the desired improvements.

Conclusion

Net promoter score calculation has multiple advantages and can help you usher in many areas of your business, such as optimizing revenues, satisfying customers, pushing your employees to do better, and, last but not least, renewing your brand value. Therefore, adopt this tool to be a foreteller of your business fortunes.

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FAQ

1. What type of questions can be asked for NPS surveys?

Both qualitative and quantitative questions can be asked. An instance for the former is “How likely would you recommend us” and for the latter “What did we do well? How to read the NPS results?

2. What type of questions can be asked for NPS surveys?