What's Net Promoter Score (NPS) & How to Improve It?

Net promoter score (NPS) is a metric that helps businesses understand how satisfied customers are with the customer experience. It’s one of the most valuable customer experience metrics because it relates the quality of customer experience to growth potential. In this article, we’ll explain how net promoter score works, why it’s so important, and answer some questions like “ what is a good net promoter score?”

Net promoter score hinges on just a single (very important) question: how likely are you (the customer) to recommend the brand (or a specific product) to someone else? To measure net promoter score, customer success teams distribute this simple survey question to customers and ask them to respond with a number between 0 and 10. A customer who responds with a 0 is very unlikely to recommend the business or product and a customer who responds with a 10 is very likely to recommend the business or product. Customer’s responses are gathered and then divided into three categories:

Detractors are customers who respond with any score from 0 to 6. These customers are not likely to purchase from your business again. Even worse, they could potentially harm your brand’s reputation with negative comments about your brand to other people.

Passives are customers who respond with a score of 7 or 8. These customers are more or less satisfied with your brand or product, and probably will not do anything to harm your brand’s image. However, they also are not very likely to go out of their way to promote your business or product.

Promoters are customers who respond with a score of 9 or 10. Promoters are very happy with your brand or product and are usually loyal repeat purchasers. More importantly, they are likely to tell other people about how happy they are with your business or product.

What's NPS?

After a customer success team has gathered their NPS survey responses and segmented all respondents into detractors, passives, or promoters, they have all the information they need to calculate the business’s net promoter score. The next step is to use the net promoter score formula, which is actually very simple:

Net Promoter Score = % of promoters – % of detractors

For example, say you distribute a net promoter score survey with the question: “how likely are you to recommend this business to a friend, family member, or co-worker?” and collect 500 responses from customers. You segment the data and end up with 300 promoters, 100 passives, and 100 detractors — which means your respondents are 60% promoters, 20% passives, and 20% detractors. To find out your net promoter score, you would subtract 20 (percent detractors) from 60 (percent promoters), resulting in an NPS score of 40. 

A business’s net promoter score can range from -100 (if every customer is a detractor) to 100 (if every customer is a promoter).

The history of net promoter score begins in 2003 when the metric was developed by Bain and Company. Two decades later, nearly every business tracks it to help them monitor customer satisfaction and growth potential. But if you’re wondering specifically: “what is NPS in customer service?”, the answer is that net promoter score can help customer service teams predict a variety of other crucial metrics like customer churn. 

NPS Survey

A net promoter score survey usually only consists of one question that asks customers to rate how likely they are to recommend a business or product to other people like friends, family, or people in their professional network. NPS surveys are typically planned, executed, and analyzed by whichever team is in charge of customer experience. Net promoter score is a key metric for evaluating customer experience and determining how to improve it.

Many businesses use NPS survey tools to help them collect or analyze net promoter score data. There are multiple free NPS survey tools available online. Selecting an effective tool for distributing net promoter score surveys and collecting responses can help customer success teams gather more reliable data.

If your net promoter score is lower than you’d like it to be, there are several ways you can improve it. One method is to invest in better customer education. You can use a learning management system like Northpass to power a robust academy of customer training content, which can not only help customers get more value out of your brand but also give them more ways to spread the word about it. Top-quality customer education content can be shared by promoters and help attract new customers. Plus, you can use Northpass’s powerful analytics features to help you interpret your net promoter score and use the data to drive positive changes to customer experience.

Net Promoter Score Question

The most common NPS question wording is some variation of “how likely are you to recommend [insert product or brand name] to someone else?” By collecting responses to this question and ranking them into tiers of likelihood, customer success teams can get an impression of how many of their customers are promoting their brand and how many customers are actively detracting from it with negative word-of-mouth. With just this one question, customer success teams can gain insight into the company’s growth trajectory.

There are many reasons why customers might choose the NPS ratings they do. Two customers who give 0s could have very different negative experiences in mind, just as two customers who give 10s could love a product for completely separate reasons. Most net promoter score surveys give customers the opportunity to share why they responded with the rating they did to help tie ratings to concrete causes. The answer to the question “how many questions in an NPS survey” is technically “one,” but it’s also good practice to include a second part to the question where you allow the customer to elaborate if they want to.

It’s essential to combine net promoter scores with other metrics to reveal the whole story. Tracking other important customer satisfaction metrics like first contact resolution rate alongside net promoter score can help you understand why your net promoter score sits where it does. In other words, net promoter score tells you when your customers are dissatisfied, but you’ll usually need to correlate it with other metrics to determine how to correct the problem.

Net Promoter Score Benchmarks

Net promoter score benchmarks are hard to nail down because the answer depends on multiple complicated factors. One of the strongest distinguishing factors is industry. The question ”what is a good NPS score for SaaS” is a very different matter than the question “what is a good NPS score for consulting.” For the B2B SaaS industry, a net promoter score of around 40 is typical. However, businesses in industries like digital marketing or consulting frequently have net promoter scores of 60 or higher. 

In general, if you can keep your business’s net promoter score above 0, you’re doing well. Obviously, getting your score as high as possible is a good thing — the higher it climbs, the more loyal you know your customers are and the more likely they are to tell other people about your business. If your net promoter score dips below 0 into the negative numbers, you need to consider taking action to improve it because your business could actually be losing opportunities for new customers thanks to unhappy current customers.

Unfortunately, current trends suggest that net promoter scores across all industries are gradually declining. This is likely not due to businesses providing poorer experiences regardless of industry, but rather due to customers having higher expectations than they’ve ever had in the past. There are a few theories for this apparent shift, one of which revolves around the fact that there is much more competition for customers' attention and interest than ever before.

NPS Survey Best Practices

Net promoter score surveys are fairly straightforward, but it is nevertheless important to carefully adhere to the tried and true NPS survey best practices to ensure the most accurate results. Let’s review some of the best practices we’ve covered in this article.

Net promoter score surveys revolve around a single question that asks customers to rate their likelihood of recommending the business or product on a scale of 0 to 10 — 0 being least likely and 10 being most likely. However, it’s also good practice to include an NPS follow-up question that asks customers to elaborate on the reason they chose the rating they did. This can give you deeper insight into not only how satisfied your customers are, but also what’s causing that satisfaction or lack of satisfaction. 

Another NPS best practice that’s used in many of the most successful net promoter score examples is combining net promoter score with other metrics to create a clearer picture of customer satisfaction. For example, you can track other customer satisfaction metrics and look for correlations between those and the fluctuations in your net promoter score.

When interpreting your net promoter score, it’s also crucial to remember that what constitutes a “good” net promoter score is very different depending on the industry your business exists within. It can be helpful to use your industry’s average NPS as a benchmark, but also keep in mind that any score above 0 is usually good news (or at least not bad news). However, businesses in certain industries may want to aim much higher.