Net Promoter Score: The Complete Guide
The Contact Center KPIs that Matter Most – TechSee Data Sheet Collection Part 1: NPS
What is Net Promoter Score?
Net Promoter Score (NPS) is an easy-to-calculate management tool that is widely used to gauge customer loyalty. It is a core metric that helps measure customers’ overall perception of a brand and the likelihood of them recommending the product or service to a friend. Respondents are segmented into three customer types: promoters, passives and detractors.
As reported by Bain & Company to Bloomberg, more than two-thirds of Fortune 1000 companies use Net Promoter Score to evaluate the likelihood of customers churning. The evaluation determines the need for proactive activities to prevent customer churn by targeting the unhappy customer and addressing any negative issues before they abandon ship or worse, damage your brand with negative word-of-mouth. According to consultant Estaban Kolsky, 11% of customer churn can be avoided if the business simply reached out to the customer.
How to Calculate NPS
Measuring Net Promoter Score is based on a simple 0-10 point scale. Customers are asked a single question about their satisfaction with the company’s product or service.
- Promoters (score 9-10) are loyal customers who will keep buying and referring others.
- Passives (score 7-8) are satisfied but unenthusiastic customers who may consider the competition.
- Detractors (score 0-6) are unhappy customers who can damage your brand via negative word-of-mouth.
Subtracting the percentage of Detractors from the percentage of Promoters yields the Net Promoter Score, which can range from a low of -100 (if every customer is a Detractor) to a high of 100 (if every customer is a Promoter).
What is the NPS Survey Question?
It is important to get the NPS question wording right. It must be clear and simple. Some common examples of the Net Promoter Score question:
“How likely is it that you would recommend our company to a friend or colleague?”
“How likely are to recommend (product name) to a friend or colleague?”
“How likely are to recommend (service name) to a friend or colleague?”
What Is a Good NPS?
A good Net Promoter Score is one that is positive, and an NPS of over +50 is considered excellent.
Here are some examples of NPS benchmarks by industry:
How to Improve your Net Promoter Score
While a wide range of factors can affect NPS, there are common elements that directly impact the metric and the overall customer experience. One such area is the contact center. According to Deloitte, 62% of companies view customer experience delivered by the contact center as a competitive differentiator. When a customer contacts a call center with an issue, the agent has a small window of opportunity to either impress the customer with a good experience or frustrate him with a negative one.
Turning a customer into a promoter is about more than providing a satisfactory customer service experience. Today’s customers have come to expect good service. If customers receive service in line with their initial expectations, that customer is likely to default to the ‘passives’ category. In order for a customer to become a promoter, a call center must over-deliver, providing service that is out of the ordinary or exceeds customers’ expectations.
Want to learn how your company can over-deliver? Click here to learn about the benefits of Visual Support and the impact it can have on the elements that influence NPS.