Source | The Happiness Index : By JOE WEDGWOOD
You’ve probably come across Net Promoter Scores (NPS) in some shape or form. Many of you perhaps even get pressure from the board to ensure that yours is better than your competitors’ – no doubt making you overly familiar with NPS.
For those of you going a bit cross-eyed at this point allow me to enlighten you:
NPS is a very simple surveying question used to measure your customer experience and potential for business growth by asking a single question – e.g. “How likely are you to recommend us to a friend or colleague?“
All answers are based on a 0 -10 scale and the scores are broken down into three groups – Promoters, Passives and (the infamous) Detractors.
- Promoters are loyal and happy customers who scored between 9-10. They are likely to refer your company and become advocates for your brand.
- Passives are satisfied but not blown away by your company or service; your competitors could potentially woo them. They scored between 7-8.
- Detractors are unhappy campers who are highly likely to bad-mouth your company. They scored 6 and below.
To work out your NPS score you calculate the % of all three groups, then subtract the % of Detractors from the % of Promoters – the final sum is your NPS. Don’t panic, it sounds a lot more complicated than it is! Let’s say you have 70% Promoters and 20% Detractors, then your NPS is 50 (the score is typically displayed as a whole number without the percentage sign.)
Now you know what it is, we will examine if it is worth it.
Why use it?
Simplicity: The beauty of the NPS is anyone can measure it; which means you don’t have to hire a statistician to walk you through the results – even if one of them tells you otherwise! You can easily send out your survey question to your customers via email, or even a website post. The calculation is very intuitive and therefore only requires a basic spreadsheet to work out your results.
Usability: A typical multi-question survey can be very laborious for your customers. By delivering one question and an open-ended follow up question, “Care to tell us why?” – you are providing your customers with a platform to quickly provide a score and elaborate on it. They can quickly answer the question and go into detail, before going back to their duties only a few minutes later. This simple and effective system is great for customer experience.
Benchmarking: NPS is widely adopted by companies worldwide; which means you can benchmark your score and see how you shape up to your competition. This is vital, as your score only gains any real relevance or context when compared to other NPS within your sector – e.g. if your NPS is 60 but your industry average is 70 then you need to buck up your ideas…