Net Promoter Score® or NPS® is a tool used to gauge customer loyalty for a shop/brand’s products. It’s a simple one-question survey with an open-ended answer.
“How likely are you to recommend our product or service to a friend?”
The customer gives an answer between 0 and 10. 0 being very unlikely, and 10 is very likely they will recommend your shop. The responses are then broken down into three categories; Detractors (0-6), Passives (7-8) and Promoters (9-10).
A detractor is a customer who will most likely not shop at your store anymore, but might also tell others to avoid your shop.
A passive customer is one who generally liked the experience, but usually won’t go out of their way to promote your shop.
A promoter customer is highly likely to shop at your store again, and tell others about it as well.
Net Promoter Score vs Net Promoter System
Both are abbreviated as NPS which can get confusing, so let’s break down what each one is.
Net Promoter Score
This is a simple number that is calculated using the responses from customer surveys. NPS is calculated by taking the percentage of promoters and subtracting the percentage of detractors. The number itself is important, but the score by itself doesn’t mean much.
Net Promoter System
The system is much more than the score itself. The Net Promoter System also asks customers to give a reason to why they chose the score they did. This feedback is incredibly valuable as you learn what your customers think about your shop and products and can address any concerns that come up, as well as increase your positive efforts. Following up with customers after receiving feedback is known as closing the loop. This helps you clarify any feedback you received and lets your customers know you are listening.
How does it work?
1. Ask one simple question.
NPS is a single question “How likely are you to recommend [Your Shop] to a friend?” Followed by a 0-10 rating. 0 is not likely at all, and 10 is very likely. insert image
Collect open-ended feedback
After selecting a number on the scale, the customer is then asked an open-ended follow up question, “Tell us more about why you chose [number]” This allows the customer to give a non-bias answer.
2. Calculate your NPS
After collecting feedback, you can start by grouping your responses into three different categories. Detractors, Passives and Promoters. NPS ranges from -100 to 100 and serves as an overall metric of your customer’s experience. To find your NPS, you subtract the percent of detractors from the percent of promoters. show example of formula
3. Track your NPS over time.
The number itself is a good indicator of where you stand, however the better metric is how that score moves over time. Is your score increasing or decreasing? If it’s decreasing, it might mean something is off. By digging into the feedback you receive, you should be able to see why that might be happening, make adjustments and work on increasing your score.
4. Close the loop
“It’s not the score that matters; it’s what you do with it to make promoters that really counts.” -Fred Reichheld, Bain & Company
This is the most important part of using NPS. As the quote above says, it’s what you do with your feedback that matters the most. Following up with your customers after receiving feedback, not only helps you get more information on why they chose the score they did, but also helps your customers know that you are listening to them. The more information you have, the better improvements you can make, and therefore the happier your customers are.
Why should your shop measure NPS?
Unlike traditional product ratings, NPS gives you information about the bigger picture. While the product itself might be 4/5 stars, the customer might be upset that the shipping took too long, or that your site didn’t work correctly. Most of that feedback goes unnoticed and therefore you can’t make improvements on it. On the flip side, you can also work with your promoters and turn them into brand advocates, asking them to tell their friends about your store, review you on social media, etc..