Net Promoter or Net Promoter Score is a popular market research metric usually presented to candidates as a single survey question, asking them how likely they are to recommend a company, product, or service to a friend.
Aggregate NPS scores can help businesses improve services such as customer support and delivery to enhance customer experience and boost their loyalty. NPS can also predict business growth by giving you an estimate of how popular your brand is among existing customers.
But is this a necessary step to take for market research?
Why Is NPS Important?
For starters, NPS can be used as a predictor of business growth. When your company’s NPS is high, it shows that you have a healthy relationship with customers and that they have no problem promoting your brand to others. It would be an excellent sign to get such a positive response because it would imply your customers love what you’re offering them.
However, even though NPS is a valuable metric, it’s sometimes not sufficient on its own. Therefore, you can add to the basic NPS question and create an overall system that helps you get consumer feedback.
A collected NPS effort can enable you to:
Ask follow-up questions as part of the standard NPS survey. By asking customers why they've given a specific score, any kind of brand can understand what they're doing well and where they could be improving
Track and quantify a score over time and create internal benchmarks
Motivate your entire team towards one mission-critical objective: earning more loyal or enthusiastic customers
The resulting data can help you immensely in choosing to move forward with your brand, what you decide to prioritize, and what changes you may want to make.
How to Calculate NPS
You can calculate your NPS by evaluating the answer to a critical question, using a 0 to 10 scale. For instance, let’s suppose you ask your audience: “How likely are you to recommend this brand to a friend or family member?”
Then, after collecting the responses, you can categorize them as follows:
Promoters (score 9-10): These are loyal enthusiasts who make more purchases in the future and recommend your products to others, fueling growth.
Passives (score 7-8): These people are satisfied but generally unenthusiastic customers and might be vulnerable to competitor products.
Detractors (score 0-6): These are unhappy customers who can damage your brand and hinder growth due to negative word-of-mouth.
So, to calculate your NPS, all you have to do is subtract the percentage of Detractors from the percentage of Promoters. The result or total NPS can range from a low of -100 (if every customer is a Detractor) to a high of 100 (if every customer is a Promoter).
How Can NPS Help You?
You can measure almost anything using an NPS score. Because you have the freedom to direct any sort of survey question to your audience, you have a lot of room for data collection.
You may track individual products (or prototypes), stores, website experience, or even employees. By incorporating NPS into your marketing strategy, you can compare your scores against industry NPS standards and understand your relative performance in the market.
Also, you can use it to gain insights into your target market and see how they respond to different products or services. The end goal can be to gain loyal customers who can also act as natural brand evangelists for you.
Thus, measuring NPS can give businesses deeper insights into their customers’ preferences and whether they’re satisfied with the brand so far. It can also be an indicator of potential business growth and can help brands take customer feedback into account to fix issues or improve the overall experience.