NPS – Measuring Customer Satisfaction

NPS – Measuring Customer Satisfaction

NPS – Measuring Customer Satisfaction

The Net Promoter Score is a technique that is widely used to measure your customers’ satisfaction with a product offered by you or your company. It’s also a practical and straightforward calculation. As the name implies, the result is the percentage of people who promote your brand/product or, in other words, the percentage of people who would recommend it to other consumers.

How to use it?

First of all, an NPS survey always begins with a standard question:

“On a scale of 0 to 10, how likely would it be for you to recommend a [Company X or Product X] to a [friend, colleague or relative]?”

Based on the result, the customers can be classified as:

Promoters (people who answered 9 or 10);
Passives (people who responded 7 or 8);
Detractors (people who answered below 7).

Using our customers’ scores, we can calculate the NPS using the formula:

NPS = (% promoters) – (% detractors)

Therefore, notice that the result can vary from -100% (all the customers may speak poorly about your product) to +100% (all of them would recommend your product).

Ask for feedback

The technique alone might not always help us as much as we would like. But since the primary survey question can be answered very quickly, you can use the opportunity to ask your customers a second question. It should be based on the score they gave to the first question. For example, when applying NPS to products, one usually asks:

To Promoters: “Thank you! Have you recommended us to anyone yet?”
To Passives: “Thank you! What could we do to earn a 10?”
To Detractors: “Your opinion is important to us. Could you tell us how we can improve?”

Certainly it is crucial to provide an open text field for the feedback answer. In contrast, an usual error is trying to predict the answers, offering the ready-made client answers to choose from. By doing that, you’ll be leading them to a specific response, and you won’t get useful feedback.

Margin of error and tools

Above all, it’s a common challenge to figure out how many answers are necessary for the score to be reliable – It is usually said that any answer is better than no answer. However, keep in mind that if you use the score, it’s important to know its margin of error. You can easily find tools and formulas to estimate your margin of error on the internet. Another way not to get bogged down with too many answers is to do the survey periodically, keeping it available for a limited amount of time. For example, you could install an NPS survey which is available on your website for one week, every two months. This would provide you with enough comparative metrics to gauge your level of service.

What makes a good NPS?

First of all, that depends on your industry, and on your competitors’ NPS. In this case, comparing is better than focusing on an absolute figure. An NPS above 20 is great in some markets. And, in others, an NPS below 60 will put you behind the competition. However, a positive NPS will at least indicate that you have a healthy product, unlike a negative NPS, which probably signals that soon nobody will be using your product – after all, who wants to buy something that most people wouldn’t recommend?

Want to know more?

If you want to dive deeper into this topic, see the article by Bain and Company – the ones that developed this survey model. Similarly, there are many other resources on NPS available on the internet.

Did you enjoy this? Would you like us to write more about survey models? Please, leave your suggestion in the comments’ section. 😉

By | 2017-12-20T18:18:34+00:00 November 3rd, 2017|Marketing, Product Owner|0 Comments

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