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Net Promoter Score is a metric that provides insight into the loyalty and enthusiasm that consumers have for a particular brand. Customer experience satisfaction is statistically calculated in order to develop a companies’ Net Promoter Score.
Net Promoter Score Survey Design
To calculate an organization’s NPS, the brand must dispatch a one question survey to previous customers. The question that determines the score is, “how likely is it that you would recommend to a friend or colleague?” The participating customers are asked to respond on a scale of 0 to 10, with 0 meaning “very unlikely” and 10 meaning “very likely.”
Before moving into the formula for calculating Net Promoter Score, it is important to understand how consumers will be categorized during the calculation process. During calculation of Net Promoter Score, the customers who responded to the one question survey are divided into three categories: promoters, passives, and detractors.
Categorizing Consumer Perceptions through NPS
Promoters are loyal to the brand and are excited about sharing their positive experience with others. They responded to the survey that they are very likely to recommend the brand to friends and colleagues. Respondents who are considered promoters must have responded to the one question survey with either “9” or “10.”
Passives are happy customers but not wildly enthusiastic about sharing their experience with others. These customers may be more vulnerable than promoters to flee to competing brands for their future purchases. Respondents that fall into the passives category reported a “7” or “8” when asked to complete the one question survey.
Detractors are not happy with the product or service they received from the brand in question. These customers are at risk for speaking negatively about the brand to their network of friends and colleagues, which could stunt or inhibit brand growth. Detractors answered the one question survey with numbers between 0 and 6 on the varying scale.
The image below shows where promoters, passives, and detractors fall along the 0-10 numerical scale.
Calculating Net Promoter Score
In order to calculate the actual Net Promoter Score, the percentage of promoter respondents and detractor respondents must be found. Once this is accomplished, the percentage of detractors is subtracted from the percentage of promoters. The difference between the two is the brand’s Net Promoter Score.
The score will fall somewhere between 100 and negative 100. A positive numeral NPS would indicate that the majority of respondents were enthusiastic promoters and a negative numeral NPS would indicate that consumers are generally not enthusiastic about promoting the brand. In very general terms, any positive Net Promoter Score is considered “good,” 50 or above is “Excellent,” and 70 or above is considered “world class.”
Based on global NPS standards, any score above 0 would be considered “good.” This simply means that the majority of your customer base is more loyal. However, it is always advisable to benchmark yourself with players in your industry and industry norms to get a good perspective of how well the company is doing.
Utilizing NPS for your brand
Net Promoter Score serves as a straightforward, quantitative measurement of brand perception and should be conducted periodically for comparison over time. Although the insight that is provided by a Net Promoter Score is incredibly valuable to a brand, it is still a single metric for measuring overall brand health. In order for a brand to truly understand their standing within the space of a particular market, a diverse set of metrics should be selected for regular review.
Today, businesses have the ability to gather overwhelming volumes of information on their consumers and their consumer’s behavior. The recent increase in available information has been revolutionary yet has come with challenges. It is increasingly important for marketers to be aware of the opportunities and challenges associated with data in order to fully understand brand standing within a market and thoughtfully navigate decision making.
A few weeks ago, we discussed the value of data for brand health tracking. In that post we outline the importance of using data collection and analytics to maintain an eye on key performance metrics, which is an ongoing process that is essential for maintaining a strong brand.
It is a best practice to intermittently analyze data to watch out for potential problems for the brand within the market. One of the keys to maintaining a profitable and well received brand is to actively combat a dip in metrics before that dip becomes a significant issue in overall performance. As soon as there is concern regarding the perception of a brand, action should be taken to combat the problem.
Net Promoter Score may be only a single metric yet it is an important measure and should be calculated periodically to tack consumer perception. GeoPoll works with leading brands to provide them with fast, high quality data on Net Promoter Score and general brand health tracking. Using our unique mobile survey methodology, GeoPoll can reach extremely targeted audiences and survey them weekly, monthly, or quarterly to demonstrate the health of your brand over time. Don’t wait until it is too late; contact GeoPoll to set up regular, custom surveys today.