What is NPS?

Net Promoter Score™ (NPS) is a globally recognised customer satisfaction metric that is used to rate your customer’s experience with your business.

NPS™ was pioneered in 2003 by Friedrich and Bain to find a better way of understanding customer satisfaction than the usual, and often lengthy, customer surveys. Working alongside data provided by Satmetrix, they were able to establish a question which allowed them to best understand and predict customer behaviour: 

What is the likelihood that you would recommend X to a friend or colleague?

People who responded highly to this question were most likely to contribute further to a
company’s growth, whether through referral, repurchasing or any other positive act.

How does NPS work?

Your customers are asked one question and asked to rate the likelihood of recommending your company out of 10. Your customers are then separated into three categories:

Detractors (0-6)

These are unhappy customers. They’re likely to actively tell between 10 and 20 people about their poor experience.

Passives (7-8)

These customers have had a neatural experience; they’re satisfied with the service you have provided, but are not considered to be loyal.

Promoters (9-10)

Your promoters are exactly that; they’ll shout about the service that they received and recommend you to their friends and family.

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The advantages of NPS™

Relevance

NPS™ provides you with a score between -100 and +100, making it simple to understand and easy for your entire organisation to get behind. 

A strong NPS™ score indicates strong business performance, from frontline staff to marketing and finance.

Big picture

Other methods of measuring customer satisfaction are based on their last interaction; asking for an opinion after the service has been provided.

NPS™ provides an opportunity for you to understand your customer’s experience across their entire journey with you.

Actionable insight

NPS™ is based on one question, but the crux of getting actionable insights is with the all important follow up question; why?

Asking this allows you to ascertain areas for improvement and areas of strength within your service provision.

Benchmarking

NPS™ is a globally recognised metric, providing you with a framework that is widely used and the ability to benchmark your performance against that of others.

There’s internal benchmarking, too; you can discover the areas that offer better customer service within your business.

Point-in-time analysis

Beyond offering the ability to see an overall score, NPS™ allows you to understand how your business performs over time.

You may notice that your organisation performs better at certain periods by comparing year-on-year performance.

Repeat business

Beyond measuring satisfaction; NPS™ helps you to understand customer loyalty and the likelihood of new and repeat business.

NPS™ can be used to help forecast your business growth, cash-flow and assess the overall health of your brand.