Chances are you’ve heard of Net Promoter Score or NPS for short. If you’ve taken a survey that asked “How likely are you to recommend product/service/company to a friend or colleague?” then you have answered the quintessential NPS question.
According to Fred Reichheld, who developed the concept of NPS, measuring and analyzing the “likelihood to recommend” is a simple yet effective way to gauge customer loyalty, which ties in with how likely they are to purchase again and bring referrals. Customer satisfaction, repeat business and referrals are all metrics that translate to business growth.
In short, the higher your Net Promoter Score is, the more likely your business will succeed.
To better understand how this simple question can predict whether your business will thrive or dive, let’s breakdown the details.
How NPS works
First, you must ask the NPS question “On a scale of 0 to 10, how likely are you to recommend [product/service/company] to a friend or colleague?”. You can use the question as is and simply replace the enclosed term with your own product, service or company. You can also use variations of this question, depending on the nature of your business. But ultimately, the goal is still to measure the likelihood of a recommendation.
Next is the rating. You must allow your customers to choose only one score from 0 to 10, with 0 being the least likely and 10 being the most likely to recommend. This 11-point rating will determine your NPS.
Lastly, you can add an open-ended question that asks your customers why they gave that score: “What is the primary reason for your score?”. The last question is quite flexible and you can personalize it as much as you want. In fact, it’s recommended that you make it as specific and related to your business as possible. And it’s okay to add more than one question if you want to get a deeper understanding of your customers’ feedback.
How to calculate your NPS
Your customers can be grouped into three customer types based on the scores they gave in the NPS question:
- Promoters if they gave 9-10
- Passives if they gave 7-8
- Detractors if they gave 0-6
Promoters are your loyal customers who speak highly of your business to their friends. They usually give glowing reviews and keep buying from you. In some cases, promoters will even defend your brand and argue with the reasons why you are better than your competitors.
Passives are customers who are somewhat happy but not entirely enthusiastic about your business and will likely switch to a competitor if they think it’s better.
Detractors are customers who are not satisfied with your business, won’t likely recommend or refer you to others and may even spread negative reviews about you and scare potential customers away.
With these customer types, we can compute the NPS based on the formula:
In words, it simply means:
Percentage of Promoters - Percentage of Detractors = NPS
What is a good NPS score?
Your Net Promoter Score can range from -100 to +100. Your aim is to get a high score. But what is considered a high score?
Based on the formula above, we can say that an NPS below 0 is generally bad. This means that you have more detractors than promoters. NPS above 0 is safe, but it depends on what your score is for you to be able to say if it’s good, very good or can be better.
Some say that an NPS of 30 is average, 50 is considered good and 70 and over is an excellent score but is rarely achieved.
Some say it depends on the industry you’re in. A number of companies came up with NPS benchmarks per industry by compiling NPS of known brands and businesses. You can compare how your business fared against these benchmarks.
But keep in mind that these benchmarks are relative points of comparison and are influenced by different factors such as location and market demographics. And it’s not an indication of the maximum NPS that you can get. It doesn’t mean that if your industry’s NPS benchmark is 20, you shouldn’t aim to get an NPS above 20. Ideally, your goal should be to improve your NPS over time regardless of your industry’s NPS.
How to create an NPS survey and calculate your score using a Marketing Automation Tool
Creating an NPS survey seems simple. All you need is one quantitative NPS question and one or more qualitative follow-up questions.
But the actual computation is not as straightforward. This is probably the reason why a lot of good NPS software programs that offer more customized NPS surveys and sophisticated visual representation of scores are charging premium rates.
But if you already have a marketing automation tool like SharpSpring, you can set up your own NPS solution for a fraction of the cost.
How it works:
1. An email will be sent to a customer list, asking them to take a survey.
2. The link in the email will redirect to a landing page with a form.
3. In the form, the NPS question is asked along with other questions.
4. Once the form is submitted, it will redirect to another landing page with another form. But the set of questions on this landing page will depend on the score they gave in the NPS question.
If you score from 0-6 in the NPS question, you will get these follow-up questions:
If 7-8, this is the follow-up question:
And if you score 9-10, this is the follow-up question:
5. Once the second form is submitted, it will redirect to the thank you page.
How we implemented it in SharpSpring:
For this implementation, we used 4 forms, 1 funnel with 3 pages and 1 email. We also used Google Sheets, Google Data Studio and a connector tool like Zapier.
In the email, we linked to the first landing page (let’s call it NPS LP) with the first form (let’s call it NPS form).
In the NPS Form, we added our NPS question and the other questions we wanted to ask our customers.
In the NPS form settings, we added the second landing page (let’s call it Follow-up LP) as the Thank You page URL.
In the Follow-up LP, we used the dynamic web content feature of the landing page to display different forms based on the score that was given in the NPS form. We created one form for each customer type (Promoter form, Passive form, Detractor form).
In the Promoter, Passive and Detractor forms settings, we added the third landing page (let’s call it Thank You LP) as the Thank You page URL.
Doing it this way allows us to fully personalize the questions that we will ask our customers and ask different follow-up questions depending on whether they are promoters, passives or detractors.
How the scores are tracked, calculated and visualize:
When a customer submits the NPS form, the data is sent to Google Sheets which is integrated with SharpSpring via Zapier.
In the Sheet, we added formulas that will automatically compute the NPS per customer.
If a customer takes the survey for the first time, a new record will be added to the Sheet. If a customer takes the survey more than once, the record will be updated each time.
Because we have full control over the data that we send to Google Sheets, we can send other information about the customer that we already have in the database, which will enable us to compute NPS of different segments. For example, we can send the City if we want to know the NPS per city.
Then we use this Google Sheet as a data source in Google Data Studio and create different charts to visualize the data.
What to do with your NPS
The real power of the Net Promoter Score is in the analysis that should come after the survey, the calculation and the visualization. NPS is just a number unless you analyze what this number is telling you.
With a fully flexible and customizable NPS solution, you can definitely do a lot more.
You can see the breakdown of respondents per rating and not just per customer type. For example, you can see how many scored 8 and ask yourself what you can do with these customers to gain the 1 point that will make them promoters.
You can define your respondents better and calculate scores per market segment. This might explain why your business is doing great in some segments and not so good in others, and what you can do to homogenize the scores across all markets.
You can summarize their answers to your follow-up questions to gain a deeper insight into your customers’ experience and take the necessary steps to improve based on this feedback.
Don’t think of NPS as simply a score you need to reach. Rather, the quantitative NPS score and the qualitative feedback should serve as a guide on how you can turn detractors into promoters by providing more value and better business to your customers.
If you are interested in setting up a Net Promoter Score (NPS) survey and reporting dashboard for your business using a marketing automation tool such as SharpSpring feel free to get in touch with us.