The Net Promoter ® Score
"On a scale of zero to 10, how likely are you to refer to a friend or colleague?"
If you've seen this question before, you've encountered the Net Promoter Score (NPS)—a methodology that gauges customer sentiment. Pioneered by Fred Reichheld, author of The Ultimate Question, the NPS predicts the likelihood of a customer repurchasing from you or referring your company to a friend.
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Calculating the Net Promoter Score:
Reichheld developed the NPS methodology, which is based on asking customers a single question that is predictive of both repurchase and referral: "On a scale of zero to 10, how likely are you to refer to a friend or colleague?"
The answers customers provide are classified as follows:
- 0 - 6 = "Detractors"
- 7 - 8 = "Passives"
- 9 - 10 = "Promoters"
The NPS is calculated by subtracting the percentage of respondents that are labeled "Detractors" from the percentage of respondents that are labeled "Promoters":
% of Promoters - % of Detractors = NPS
Net Promoter Score can range anywhere from -100 to 100.
To calculate your Net Promoter Score with the SurveyMonkey template, follow these simple steps:
- Download your survey responses into an Excel spreadsheet.
- Within your spreadsheet, identify your respondents as "Detractors", "Passives" and "Promoters" by adding up the total responses from each classification.
- Generate the percentage total of each group by taking the group total and dividing it by the total survey responses.
- Subtract the percentage total of "Detractors" from the percentage total of "Promoters" and this is your NPS.
If you received 100 responses to your survey:
10 responses were in the 0 - 6 range (Detractors)
20 responses were in the 7 - 8 range (Passives)
70 responses were in the 9 - 10 range (Promoters)
Calculating the percentages for each group gives you 10%, 20% and 70% respectively.
Subtract 10% (Detractors) from 70% (Promoters) which equals 60%. Since a Net Promoter Score is always shown as just an integer, and not a percentage, your NPS is simply 60.
Net Promoter Score Advantages:
The greatest advantage to NPS is its simplicity. It's easy to calculate and with the SurveyMonkey Net Promoter Score Template, you can start surveying your customer base in minutes.
Additionally, the NPS makes customer experience quantifiable in the executive suite. Management can see how well departments are performing with one simple metric. This introduces a common language that is easy to understand by everyone: is this customer a Promoter or a Detractor?
Net Promoter Score Disadvantages:
The NPS is not without its criticism. Many academics find it ill advised for a business to operate just off of one number and would recommend that a full customer satisfaction survey might generate more actionable data.
The NPS is simply an outcome metric, and it does not tell management what needs to fixed. A positive net promoter score will not conclusively lead to an uptick in revenue, while corrective actions derived from a traditional survey will have an impact on the bottom line.
However, for a quick, easy method by which to determine whether your customers are more likely to promote or detract from your company, use the NPS.
Net Promoter Score is a trademark of Satmetrix Systems, Inc., F . Reichheld, and Bain & Company.
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