The result of a survey questioning your customer’s likelihood to recommend your brand to a friend or colleague is the Net Promoter Score (NPS). NPS measures your customers’ overall satisfaction with your company’s product or service and even their potential to advocate for it on your behalf.
First developed by the consulting firm Bain & Company, the score attempts to distill the evaluation of a company’s overall customer experience program into one metric, helping to focus budget, resources and time on those that can help drive lasting loyalty. To help refine the results of the question or assist in the earlier stages of customer segmentation, customers can also be presented with two or three demographical questions, such as their age range, sex or income level, before selecting their rating or be prompted with a text field to further describe why they chose the score or what could be done to improve their overall experience.
Why is the NPS important?
NPS scores can be an indicator for an individual customer’s brand loyalty and, in turn, is often considered to be the gold standard when it comes to customer experience metrics. Additionally, NPS can be used to determine the level of customer satisfaction at the brand level or even of an individual product, service or webpage. The question can even be used following an interaction with customer service, evaluating how NPS can change with individualized attention.
However, NPS should not be used alone; it should be collected and analyzed along with other data and customer experience metrics, such as churn. The data can also be used to generate trends or find patterns that could improve a customer’s experience along their journey map.
How do I calculate NPS?
NPS is calculated by customers selecting a rating in response to the “How likely are you to recommend our brand to a friend or colleague?” question, using a scale of 1 (not at all likely) to 10 (extremely likely). The result then puts that customer – and those compiled from across a customer’s organization – into three groups:
- Promoters (9 or 10)
- Passives (7 or 8)
- Detractors (0 to 6)
While promoters are very loyal, will gladly recommend your brand to others and can be relied upon to keep buying your products and services, detractors are very unhappy and will likely spoil your reputation with others that may be in the exploratory phase themselves. On the other hand, passives are satisfied customers, but they may be open to hearing about other options, especially if there is a better deal offered for similar services.
To calculate the score for an organization or a customer segment, subtract the percentage of detractors from the percentage of promoters. While benchmarks can vary across industries and the overall maturity level of a company, generally a score above zero is considered good while anything above 20 is considered favorable.
No matter where your company is along the path toward delivering superior customer experiences, Gainsight’s Customer Cloud platform was designed to give B2B SaaS companies the tools they need to orchestrate personalized engagement at the critical points of a customer’s journey. You can learn more about how Gainsight can impact your business here.
