What do customers really think of your brand or products? Do they like you enough to recommend you to their friends? How likely are they to purchase from you again?
As a customer experience (CX) professional, these are crucial topics. After all, if customers aren’t satisfied with the service they received or don’t like your products, chances are, they won’t be repeat customers.
To top it off, with the ease of social media reviews, they could instantly share a negative experience with hundreds or thousands. As you’re probably already well aware, it’s definitely in your best interest to understand your customers' opinions and quickly address gaps that are causing dissatisfaction.
That’s where the Net Promoter Score® (NPS) comes in. In this article, we’ll explore the pros and cons of NPS and touch on the following areas:
A simple way to understand your customers’ level of loyalty is to send out a Net Promoter Score (NPS) survey to your customers. The NPS system measures customer satisfaction and gauges whether customers like your company—and if they’d tell their friends about it.
It does this by asking one core question: “How likely are you to recommend [Organization X] to a friend or colleague?”
Customers rate their answers on a 0-10 scale. You then divide this scale into three categories: “detractors,” “passives,” and “promoters.”
You can figure out your NPS by using the simple Net Promoter Score calculation, NPS Calculator, or using this formula:
When you use our NPS Survey Template, we calculate your Net Promoter Score so you can file away that spreadsheet or track it in Salesforce and put your energy into a follow-up plan.
Related reading: NPS surveys: Best practices for high response rates
The NPS gives you the tools necessary to track customer satisfaction and implement strategies to improve it. The NPS question essentially asks customers if they have a positive experience with your brand. Those who respond highly have had a wonderful time with your business and are more likely to recommend you to a friend.
While all forms of marketing have their place, one that’s constantly overlooked is word-of-mouth. In fact, 57% of customers say they would stop doing business with a company if a friend told them they had a bad experience. Understand your audience with NPS, create a better customer experience, and iterate upon it time and time again.
Customer loyalty and satisfaction are two leading aspects of running a successful business. Yet, quantifying something as abstract as enjoyment can pose a challenge for many companies. That’s where NPS comes in.
The NPS demystifies customer satisfaction with an incredibly simple question. Instead of collecting hundreds of various responses to try and understand what your customers feel, the NPS condenses everything down into a single question.
Businesses can use the NPS to get a simple, quantifiable, and benchmarkable figure that represents customer loyalty and satisfaction. Once a company has this initial figure, it can begin to implement changes and measure their impact on CX.
As you repeatedly measure NPS, you can see how internal changes impact your customers. Over time, you’ll be able to create a winning customer experience across every touchpoint.
Let’s start off by examining the positive aspects of the NPS system and look at ways it can help your company if you apply the findings to your business practices.
One leading advantage of the NPS is how simple it is to create, send out, and understand.
The NPS online poll does not require a statistician to administer it. The example survey question uses one main idea—whether your customers like your company enough to recommend it. It often includes a few follow-up questions to help you understand why people would recommend/would not recommend your brand.
You can easily send it out to customers through email or post it on your website, and the calculation formula is intuitive and only requires a basic spreadsheet to calculate. Or, if you use the SurveyMonkey NPS template, we’ll handle the math for you!
Related reading: Learn how to calculate your Net Promoter Score
A key component of the NPS program is that it’s a standard measurement used by companies worldwide—so you can easily benchmark your Net Promoter Score and see where you stand against your biggest competitors. Your score gains relevance in the context of other scores within your industry.
For example, if your NPS is 61, but your industry average is 70, you know that, relative to your competition, you have work to do. Alternatively, if your score is 70, but your competitors all have scores in the low 60s, you know your customers enjoy your company.
Having a high score doesn't mean it's time to get comfortable. On the contrary, achieving a high NPS is an opportunity to send out another survey and ask your promoters how you can improve your business.
This approach shows customers you care about meeting their needs even after they've purchased your product or service. It also inspires your promoters to remain promoters and not slip into the passive category.
Related reading: Improve customer loyalty and retention
When you ask for additional information to outline why a customer responded to your NPS in a certain way, you unlock a range of data that can provide powerful, actionable insights.
NPS feedback offers actionable insights that pinpoint areas your business can improve upon. For example, maybe customers show lower satisfaction with a specific product. By investigating this relatively lower NPS, you can find out how to improve that product.
Over time and with continuous improvement, you can enhance every aspect of the customer experience. The actionable insights that you can draw from the NPS can chart your course toward success.
The NPS isn’t just a great measure of customer loyalty—having high marks can also lead to business growth. Numerous studies have found that there is a strong correlation between high Net Promoter Scores, repeat purchases, and increased revenue.
SurveyMonkey research shows that 40% of CX professionals use the NPS to prove their revenue. The research suggests that when companies use NPS as a key metric, it helps drive business growth as the company becomes more focused on improving the score.
NPS is a great way to monitor your business's health regarding customer satisfaction and internal operations. A high NPS score closely correlates to:
When you focus on improving NPS, you’re actively improving the customer experience and winning customers for life.
As you can see, there are many pros of the NPS. But, several disadvantages are important to acknowledge.
Let’s visit some of the Net Promoter Score cons.
Critics of the Net Promoter Score say that, while it may help you understand customer loyalty, it doesn’t specifically identify why your customers may be detractors.
To understand why your customers don’t like certain aspects of your company, make sure you follow up with more specific market research surveys or customer satisfaction surveys. Sending out the NPS survey is a great first step to understanding customer loyalty. But to really make the NPS system effective, you need to have a follow-up plan.
Say that your scores come back really low. What’s your next step? Will you send out more detailed surveys to pinpoint the issues? Do you have the resources in place to fix the broken logistics that may be leading to customer dissatisfaction?
You can always find solutions when you ask the right questions. Equally, you can also create more specific, transactional NPS surveys that ask whether a customer would recommend:
Research sample survey questions and examples to help build your next NPS survey. By providing as much additional context as possible and coupling the NPS with further questions, you can overcome this disadvantage.
Related reading: How to follow up with NPS detractors, promoters, and passives