The Net Promoter Score is one of the most widely used methods of gauging customer loyalty, but it can be difficult to know what to do with it if you do not know what the number means. Below is a brief explanation of how the Net Promoter Score is determined and how it applies to your business.
Net Promoter Scores are determined by asking a sampling of your customers one question: “On a scale of 0 to 10, how likely are you to refer a friend?” It seems like such a simple question, but it can tell you so much; word of mouth is one of the best ways to promote your business, so knowing how many of your customers are actively willing to recommend you can help you know if your business is on the right track or not. While more in depth surveys can be helpful in knowing precisely what needs improvement, this question is a quick and easy way of learning where you currently stand.
When you ask the question above, you are asking your customers to answer on a scale of one to ten, so how do you classify those answers? Those who give your company a score of zero to six are labeled as detractors. They are likely frustrated with your company for some reason, and may even be angry. They will either go out of their way to tell others not to do business with you, or will have poor things to say about their experiences with you when asked. They can do a lot of damage to your business or brand through word of mouth. Those who answer seven or eight on the scale are labeled as passive. They have little or nothing bad to say about your service, but they do not go out of their way to say anything good about it, either. Your service or product met their needs adequately, but they are open to being won over by your competitors. Your customers who answer nine or ten on the scale are your promoters! You want as many of these customers as possible; they are as happy as they can be with your service and likely tell their friends and family about their good experience with your company. Their positive word of mouth endorsement is invaluable. Every customer’s response is taken into consideration when calculating your final Net Promoter Score.
Your Net Promoter Score is determined by subtracting the percent of detractors from the percent of promoters. For example, if you polled 100 customers and had 20 detractors, 30 passives, and 50 promoters, your Net Promoter Score would be 30. This number can help you see where you stand in the eyes of your customers. You can find the average Net Promoter Score for your industry and see how you stack up against your competition. Checking your Net Promoter Score over time as you make changes can also help you gauge how your changes are being received by consumers.