What Is NPS
Based on a rating scale, Net Promoter Score or NPS was ideated by Fred Reichheld, a partner at Bain & Company, in 2003. This metric was devised to measure the level of customer satisfaction. NPS helps companies understand the impact they have on their customers. It allows businesses to take measures to enhance the customer experience.
Net Promoter Score is primarily obtained through surveys. A typical NPS survey looks like this:
The customer is asked to give a rating from a mark of 0 (not at all likely) to 10 ( extremely likely).
In general, the low rating is assumed to be negative feedback, middle rating is taken as average feedback, whereas high rating is touted as the positive feedback.
For easy scheduling and management of recurring surveys, companies are actively using the best net promoter score survey software. NPS survey software like ProProfs Survey Maker helps companies to manage multiple campaigns to identify unsatisfied customers/employees as well as brand advocates.
Using the tool, marketers can share NPS surveys via numerous channels in just a click. That’s not all. The powerful insights given by smart reporting allows marketers to assess the results quickly. Hence, you are able to see if you have got good NPS, bad NPS, or average NPS on a dashboard. To learn more about why you need a NPS software, visit the link.
How Is It Calculated?
As already mentioned, NPS surveys require respondents to give the rating from a range of 0-10. The rating tells how much they liked the product and how much they would like their family and friends to give it a try too.
Based on the ratings given by them, the respondents are grouped as follows:
- A-Score 9-10: Promoters: These are loyal customers who will stick to the brand and help in business growth.
- B-Score 7-8: Passives(Fence Sitters): These are customers who are satisfied but are open to trying offerings made by competition.
- C-Score 0-6: Detractors: They are the unsatisfied customers who didn’t like the product/ service. They are most likely to do bad publicity and impact the bottom line.
Once you have received the ratings from the respondents, Net promoter score is then calculated by subtracting the total % of detractors from the total % of promoters.
|Net Promoter Score = % Promoters -% Detractors|
To calculate the percentage of promoters, the number of respondents who gave the score 9-10 are divided by the number of total respondents. A similar formula is used to find the percentage of detractors.