Free Customer Success Tool - Survey Metric: Net Promoter Score (NPS)

How the NPS Survey Works

1. Key Question

Customers are asked a single, straightforward question:

“On a scale of 0 to 10, how likely are you to recommend [Company/Product] to a friend or colleague?”

2. Open-Ended Follow-Up

After the rating, respondents are encouraged to provide reasons for their score in an open-text field.

Example: “What’s the primary reason for your score?”

NPS Calculation

Scores are divided into three categories based on the rating:

• Promoters (9–10): Enthusiastic customers likely to recommend your product or service and contribute to growth.
• Passives (7–8): Satisfied but not enthusiastic customers; they are neutral in their impact.
• Detractors (0–6): Unhappy customers who may discourage others from using your product or service.

The NPS is calculated as:

NPS = (% of Promoters - % of Detractors)

Scores range from -100 (all Detractors) to 100 (all Promoters).

Why NPS Matters

1. Customer Loyalty Insight

• Indicates how likely your customers are to stay, refer, or churn.

2. Growth Predictor

• Higher NPS often correlates with increased referrals and revenue.

3. Actionable Feedback

• Open-ended responses provide insights into areas for improvement.

4. Benchmarking

• Allows companies to compare performance against industry standards.

How to Use NPS Effectively

1. Regularly Conduct Surveys

• Gather feedback at critical touchpoints (e.g., post-purchase, onboarding, renewal).

2. Analyze Trends Over Time

• Track changes in NPS to assess the impact of improvements.

3. Segment Results

• Break down scores by demographics, regions, or customer types to pinpoint issues.

4. Follow Up with Respondents

• Address concerns from Detractors.
• Engage Promoters to create brand advocates.

5. Tie to Business Metrics

• Use NPS alongside retention rates, lifetime value (LTV), and churn metrics.

Limitations of NPS

1. Oversimplification

• A single score may not capture the complexity of customer satisfaction.

2. Subjectivity

• Cultural and personal biases can affect responses.

3. Lack of Detail

• Requires qualitative follow-up to fully understand feedback.

4. Focus on Extremes

• Neutral responses (Passives) are often overlooked despite their value.

NPS Best Practices

• Personalize Communication: Tailor follow-ups based on the customer’s score and feedback.
• Close the Loop: Act on feedback and inform customers about changes made in response to their input.
• Set Benchmarks: Compare your score to competitors and industry averages.
• Combine with Other Metrics: Use NPS alongside CSAT (Customer Satisfaction) or CES (Customer Effort Score) for a more comprehensive view.

Industry Benchmarks

NPS varies by industry. For example:

• SaaS: 30–50
• Retail: 50–70
• Telecommunications: 10–20

A score above 0 is considered positive, while a score above 50 is exceptional.

Tools to Implement NPS

• Survey Platforms: Typeform, SurveyMonkey, Delighted, Qualtrics.
• CRM Integrations: HubSpot, Salesforce, Zendesk.
• Analytics Tools: Tableau, Power BI for advanced data segmentation.

Conclusion

By leveraging NPS, businesses can prioritize improvements, foster loyalty, and drive sustainable growth.