What is Net Promoter Score?
Net Promoter Score is a measurement of customer experience and is often used to predict business growth. It ranges from -100 to 100 and measures how willing customers are to recommend a company’s products or services to others.
It was once a highly regarded score assigned to businesses on customer experience and can be used to predict a customer’s loyalty and satisfaction to the overall brand.
How do you calculate Net Promoter Score?
Net Promoter Score is calculated based on asking customers, “On a scale of 0 to 10, how likely are you to recommend this company’s product or service to a friend or a colleague?” When responses come in, they are classified into three categories.
- Promoters: (score of 9-10) These are loyal, satisfied customers that will keep buying from a business and refer others to the company. They are enthusiastic about how they feel about the business’s products and services.
- Passives: (score of 7-8) Customers scoring in this range are somewhat satisfied but they could easily switch to a competitor. They will not talk negatively about your business, but they are likely to not bring in more business.
- Detractors (score lower than 6) These are often unhappy customers that can spread negative comments about your company through word-of-mouth. They will not purchase from your business again.
The overall Net Promoter Score is the difference between the percentage of customers who are detractors from the percentage that are promoters.
What is a good NPS score?
-100 is the score of all customers who report a score of 6 or lower and 100 is the score if all customers choose 9-10. So, a score of 70 and over is exceptional and means that most customers are satisfied with your business. The goal is to have more satisfied customers, so they far outweigh the detractors.
How can I improve my Net Promoter Score?
If your business net promoter score is low, that means your business has more detractors than promoters. To improve NPS, your entire business needs to make a commitment to improving customer experience. All departments from marketing, sales, operations, and especially customer service need to work together within an accountable system to see lasting improvements.
Employees that interact with the public need to be aware of feedback from customers and internal staff. Everyone can learn insights from the customer’s point of view.
Finally, the business must have a way of collecting data from feedback and analyzing it, looking for trends that could explain why there are more detractors than promoters. These patterns can help a business evolve and improve its Net Promoter Score.
Why is Net Promoter Score Important?
- Businesses can learn which customers are detractors. Learning who is a detractor is not enough; next, it is important to ask what areas a business can improve on. A low NPS means that there is a gap that needs to be filled.
- Businesses can learn which customers are promoters. It is extremely important to learn about promoters as businesses can immediately ask for a public review or referral. The testimonial can be useful to post on social media, marketing materials, or business websites. Word of mouth referrals is some of the most trusted, according to our recent 2021 study, so more positive reviews result in more business.
- It shows that businesses care about what their customers think. Many businesses say they care but using the NPS is a way to show how customer-centric a company is.
- There is an open channel of feedback for customers. By using the NPS and a field for open feedback, businesses can gain new ideas for improvement. You can also learn if customers are open to more business in the future.
- Customer service analytics are useful for bringing in new customers. The overall number tells whether your company has more detractors or promoters, and open-ended feedback can be traced for patterns of sentiment.
Is Net Promoter Score useful?
The Net Promoter Score is useful because it provides depth. The 11-point system (0 to 10) covers a wide range and with notes for specific feedback, it can provide excellent feedback to a business.
The Net Promoter Score has become a popular way to evaluate customer experience in recent years, but it is important to realize that it has flaws. According to Research World, the Net Promoter Score can result in more positive feedback collected than is accurate due to the timing of asking and people wishing to be consistent with their answers. In addition, the great range of the system may display false complexity, as people may be too overwhelmed to choose an accurate number. It is also hard to display all 11 numbers on a mobile device.
We decided to put the Net Promoter Score to the test. In February 2021, we conducted a survey asking over 3,000 U.S respondents, “When rating your experience with a company or business, which of these rating methods would you prefer to use?”
Survey respondents overwhelmingly chose the Five-Star Rating System over the Net Promoter Score and the Emoji Rating System. The Five-Star Rating system was chosen by 56.8% of respondents, while the Net Promoter Score only received 17.7%.
We conducted the same study in April of 2018 and while overall consumers prefer the Five-Star Rating System by almost 60%, the Net Promoter Score is showing small gains in 2021. Now nearly 18% of consumers chose the NPS, while over 20% chose the Emoji System
Men Prefer NPS
Compared to 2018, women’s preference for the Net Promoter Score increased over 2%. Men’s preference decreased but only slightly. Women still prefer the Five-Star Rating System more than men. Men also prefer the Emoji System more than women, although it seems that the gap is closing.
NPS Growing in Popularity with All Generations except Ages 55-64
Although there is still a very high preference for the Five-Star Rating System among Millennials (over 50%), the Net Promoter Score is growing as a preferred method once again. Over 20% of survey respondents who chose Net Promoter Score were Millennials and Generation X members between the ages of 35-44, up over 6% from 2018.
Respondents 65 and over were the next highest to choose the Net Promoter Score at 19.6%. Gen Z also rose slightly in preference for the Net Promoter Score. Interestingly, respondents between the age of 55-64 dropped almost 3% in choosing the NPS.
In conclusion, according to our survey, most consumers prefer the Five-Star Rating System over the Net Promoter Score, although it is gaining in popularity again. Check out the advantages and disadvantages of the Five-Star Rating System and Emoji System in our 2018 post. When asking for feedback, we recommend using a system that can accommodate both the Five-Star Rating System and the Net Promoter Score to capture an accurate picture of feedback.
Improve Customer Experience with ReviewInc
ReviewInc software can help identify, analyze, and improve customer experience which affects business net promoter score. ReviewInc calculates your NPS with charts. All the feedback gathered is difficult to manage and measure alone to discover insights behind the score.