What is a Net Promoter Score and how do you use it?

July 14, 2020
By Adam

 

A Net Promoter Score (NPS) is a key business performance metric from 0 to 10, which can be used to predict future business growth based on the likelihood of current customers referring you to new prospects.

How to calculate NPS

To calculate your NPS all you need to do is ask each customer how likely would they be to recommend you to another business in their network from a scale of 0-10.

If you’re doing this in a B2C setting, you’d ask how likely they’d be to recommend you to a friend or colleague.

Once you’ve got your responses together you can sort your customers into three groups based on the rating they gave:

 

Score 9 -10 = Promoter: These customers are very loyal to you and happy with the service they get. They’d happily recommend you to other people or businesses

Score 7 - 8 = Passive: These customers are satisfied with your service but could be easily convinced to go elsewhere if the right offer presented itself

Score 0 - 6 = Detractors: These customers are not happy with your service and in danger of leaving. But more than that, detractors can further damage your brand by not recommending you to others and spreading bad word of mouth to others about your company.

 

Once you’ve worked out the percentage of respondents who fit into each category you then just need to detract the percentage of detractors from the percentage of promoters you have, and that’s your Net Promoter Score.

Obviously the closer to 100 your score is the better you’re performing and the happier your customers are.

 

What to do with your NPS

Now that you’ve worked out your NPS what are you going to do?

Sit on the results? Pat yourself on the back if you scored highly? Fall into a pit of despair if the result was lower than you imagined?

No.

Like all the data you collect in your marketing and sales measurement, you’re going to take your NPS number and put it to good use improving your customer service.

Jumping ahead a little bit, we've done this blog on customer service tools you can use to better manage the customer experience.

Don’t forget, the bigger the number of promoters you have for your business the lower the cost of acquiring new business will be because these promoters will do a lot of your marketing and sales for you.

According to Esteban Kolsky, CEO of thinkJar, 72% of customers will share a positive experience with six or more people.

On the other hand, 13% will share a poor experience with 15 or more people.

If that's the case, can you really afford not to invest in better customer service today?

Within your NPS surveys, you should take note of any specific issues that customers raised which might show why they voted so low.

You can go on an ego stroking mission of just looking at the responses of people who voted nine or 10 - but it’s not going to do any good in the long run.

Take your detractors’ comments (and even negative comments from passive responders or suggestions from promoters) and start to map them out into trends.

This will help you identify recurring problems much quicker and if you have a larger number of customers complaining about the same things, you should prioritise fixing those problems as soon as possible.

Don’t discount the single issues that only one customer has raised.

Remember even one unhappy customers has the potential to cloud opinions of you within a much wider group.

 

Grow using your promoters

While it’s easy to focus on the bad things with NPS results, don’t forget that you’ll also end up with a number of active promoters of your company who are happy with your service.

This group can be hugely beneficial to the future growth of your company.

For a start, ask them to provide you with a case study of the work you’ve done with them for your website and ask them to promote it.

We've gone into a bit more detail how customer service is the new growth market in this blog.

Ask them to leave reviews for you on third party sites.

HubSpot for instance carries reviews and ratings of all HubSpot Partner agencies on its partner directory site.

You can also look for opportunities to up sell your promoters and increase the number of services they use with you.

I hope it goes without saying here not to just up sell them anything you think you can.

If you do you’ll soon see that NPS come crashing down.

But if you put some thought into a strategy you could implement for them beyond what they’re doing, the fact they’re happy with you and have a high level of trust in your ability means they’ll be likely to spend more with you.

 

 

Six & Flow Sales Comparison Tool