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In simple words, NPS helps companies understand who’s happy (promoter), who’s not happy (detractor), and who’s in the middle (passive).
It can more professionally show you who your loyal customers are and who are not, but it doesn’t stop there; if you implement a good NPS, it can give you a lot more information that can help your business grow.
Now, you might be thinking, “What is a good Net Promoter Score?”
Let’s dive into the world of NPS and why you should understand your customer experience to make your business improve and grow.
Understanding the Net Promoter Score (NPS)
Before we dive deep into “What is a good Net Promoter Score?”, we should understand the basics, “What is Net Promoter Score?”.
Net Promoter Score is a powerful tool, but it’s more than just numbers. NPS helps businesses to measure customer loyalty and satisfaction. It asks one key question:
“How likely are you to recommend our company (or product/service) to a friend or colleague?”
Here’s where you see the real power of NPS: it breaks down the complexity of customer feelings into a single number.
How is NPS calculated?
Step 1: Conduct an NPS survey
Create an NPS survey with questions that align with your business goals; not all questions can help you collect useful data. Set the purpose of this survey. For example, you might want to know what your customers think about your new product or whether they are satisfied with its features. This is where you start with your golden NPS question.
Step 2: Categorize NPS responses
Customers respond on a scale from 0 (not at all likely) to 10 (extremely likely). Based on their answers, they are categorized into three groups:
- Promoter (score 9-10): These are your happy, loyal customers who love your products or services and are highly likely to recommend you and promote your brand.
- Passives (score 7-8): These customers are satisfied but not enthusiastic enough to recommend you without hesitation but are unlikely to switch either.
- Detractors (score 0-6): These unhappy customers who have had a bad experience and could potentially damage your brand by sharing their negative experiences.
Step 3: Calculate the NPS score
Here is your net promoter score calculator: Subtract the percentage of Detractors from the percentage of Promoters. The result is your NPS that ranges from -100 to 100, and here’s the NPS formula:
NPS = % Promoters – % Detractors
Pro tip: Remember that the goal is not to have a high score but to understand your customers better, build stronger customer relationships, and improve your products, services, and relationships.
Determine the percentage of respondents in each category:
Detractors percentage:
- Formula: (Number of Detractors / Total Responses) * 100
- Example: (20 / 100) * 100 = 20%
Passives percentage:
- Formula: (Number of Passives / Total Responses) * 100
- Example: (40 / 100) * 100 = 40%
Promoters percentage:
- Formula: (Number of Promoters / Total Responses) * 100
- Example: (70 / 100) * 100 = 70%
Why does NPS matter?
High NPS scores often show stronger business growth, as happy customers are likely to repeat their interactions with your business and bring new customers through positive word-of-mouth.
Customer enthusiasm in business means having a brand advocacy that brings organic growth through referrals.
What is a good NPS survey?
Customer satisfaction and customer loyalty identify a “good” net promoter score NPS. What constitutes a good score can vary across different industries. This variability underlines how important it is to understand your industry NPS benchmark and how it can relate to overall customer satisfaction and business growth.
NPS range
As mentioned earlier, a Net Promoter Score can range from -100, where each customer is a detractor, to 100, where each customer is a promoter. Here’s a general breakdown:
- Below 0: It underscores that your business has more detractors than promoters. This is a warning sign that your customer satisfaction needs improvement, and you must identify the issues.
- 0 to 30: This means a company has more promoters than detractors. It shows that there’s a good foundation for customer loyalty, but there’s still significant room for improvement.
- 30 to 50: This is considered favorably good and shows a healthy customer satisfaction level.
- 50 to 70: This is considered excellent and shows a strong customer base with a high customer loyalty level.
- Above 70: This is exceptional and shows how customers love the company’s products and services. This world-class level shows how actively clients are promoting this company. This level of satisfaction shows you are doing great, and you should keep up the great work.
Industry-standard matter
A good NPS overall can vary for each industry; what is considered a good NPS for one industry might not be a good NPS for another. For example, the hospitality sector might have a higher average score due to the nature of customer service experience. On the other hand, the telecom industry average might face lower NPS due to a large number of customer frustrations with service providers.
Net promoter score benchmarking is invaluable; it helps businesses set realistic goals based on their industry standards and try to achieve scores that surpass average industry NPS. Every company wants to position itself as a leader in customer satisfaction and higher customer retention.
The importance of achieving a high NPS
Achieving a high NPS overall is important; user or customer acquisition costs a lot, but it always costs less to retain customers. As loyal customers bring more customers, businesses should aim to have a higher NPS and align their offerings with their customers’ needs and expectations. This is essential for long-term success in today’s competitive marketplace.
“Grow your loyal promoters base, grow your business.”
5 Strategic insights to boost your NPS
There are many factors to elevate your net promoter score and turn your customers into promoters meanwhile reducing the number of detractors. Taking strategic approaches that focus on customer feedback, engagement, and continuous improvement, can boost overall NPS. Here are some proven strategies that can help you improve your NPS:
1- Customer feedback insights
Feedback forms are goldmines of insights. These forms are NPS surveys that don’t just calculate your score; businesses must analyze the responses. Understand the reasons behind the scores that respondents give. Identify what’s working well and what needs improvement based on promoters, passives, and detractors.
Actionable tip: Creating feedback loop forms can help categorize responses and always identify where you excel and where you need improvement.
2- Enhance customer experience
Improve customer experience to convert passives into promoters and even detractors to the next level. Not only address and solve their specific complaints but also proactively look for ways to delight customers.
Regular training sessions for customer service teams will ensure they have the skills and knowledge to provide exceptional service. Personalizing the customer journey will help them feel more heard; some customer experience technologies could help. Some of the customer experience technologies that could be used are Chatbots, analytics tools, and customer data platforms (CDP).
3- Close detractors’ loop
Reaching out personally to detractors can turn an unhappy customer with a negative experience into a positive experience. This shows how much you value all customer feedback and are committed to improvement.
Always remember to follow up with detractors. The customer service team can reach out to them and discuss their concerns and what can be done to solve their issues. In this way, your customers feel heard and valued, and there’s a higher chance to change them to promoters.
4- Reward your promoters
Your promoters are your brand advocates. Encourage promoters to share their positive experiences on different platforms or social media. This can amplify your reach and attract new customers at a lower cost.
Pro tip: Referral programs are a must-have for attracting new customers. They incentivize word-of-mouth promotion and will promote a positive feeling toward your brand.
5- Commit to continuous improvement
Continuously gather feedback, make improvements, and measure the impact of those changes on customer satisfaction. Boosting overall NPS is an ongoing process, and so should your improvements.
Review your NPS and the initiatives you’ve implemented to improve it regularly. This should be scheduled to adjust your strategies based on what’s working and what’s not.
Tailored NPS questions for different industries
Here are 15 different industries and the questions you should ask to ease your job:
- Retail: “On a scale of 0 to 10, how likely are you to recommend our store to a friend or family member?”
- Technology/Software: “Considering your recent experience, how likely are you to recommend our software/app to a colleague or industry peer?”
- Hospitality: “Based on your recent stay, how likely are you to suggest our hotel to friends and family for their future travels?”
- Healthcare: “How likely are you to recommend our clinic/hospital to someone who needs medical care or advice?”
- Banking/Finance: “How likely are you to recommend our banking services to a friend or colleague looking for financial advice or services?”
- Automotive: “Considering your last visit/service, how likely are you to recommend our dealership to a friend or family member in the market for a vehicle?”
- Education: “Based on your experience, how likely are you to recommend our educational institution to a friend or family thinking about further education?”
- Telecommunications: “How likely are you to recommend our telecom services to a friend or colleague based on your satisfaction with our service?”
- Real estate: “Given your recent experience with us, how likely are you to suggest our real estate services to someone looking to buy or sell property?”
- E-commerce: “Considering your recent purchase, how likely are you to recommend our online store to others for their shopping needs?”
- Restaurants/Foodservice: “Based on your recent dining experience, how likely are you to recommend our restaurant to friends and family?”
- Entertainment/Media: “Given the content/services you’ve experienced, how likely are you to suggest our platform to others looking for entertainment options?”
- Professional services (e.g., legal, consulting): “Considering the quality of service you received, how likely are you to recommend our firm to a colleague or friend in need of [specific service]?”
- Travel and tourism: “Based on your recent trip with us, how likely are you to recommend our travel agency to those planning their vacation?”
- Fitness and wellness: “Given your experience at our gym/spa, how likely are you to suggest our facilities to friends or family looking to improve their wellness?”
Create an NPS survey with no code
We just explored what makes a good Net Promoter Score (NPS), why it matters, and how you can improve it.
Now, it’s time to use our NPS template, which is actually an NPS calculation tool, to enhance customer retention and grow your business.
If you would like to personalize it more, simply create your form on Formaloo. Increase your response rate with your creative designs.
Join Formaloo for free today and create your NPS survey with no code. Embed it on your website, send it directly to your customers, or simply share it on your social media.
