Why is the NPS question important | Intellexo

The Net Promoter Score question and why it’s so important

Joe at Intellexo Customer acquisition, Customer loyalty, Customer retention 0 Comments

It is common on customer surveys to find a question that is referred to as the Net Promoter Score (NPS) question. It goes something like this:

‘How likely would you be to recommend [this product or brand] to a friend or colleague?’

The respondent is then asked to give a rating on a scale from zero to ten. But why is the question worded like this and why is the scale so important?

The responses to the question are then categorised, as follows:

  • 9 or 10: The respondent is a PROMOTER. They are enthusiastic about the product or brand, likely to remain loyal and also most likely to tell people they know about the benefits of being a customer. These are, as you might expect, the best customers to have. They buy again and they tell other people to buy too.
  • 7 or 8: The respondent is PASSIVE. These customers are satisfied, but not overly enthusiastic. They are at risk of switching to competitive offerings and probably won’t shout about the benefits or your product or brand to people they know.
  • 0 to 6: The respondent is a DETRACTOR. They are not satisfied by the product or brand, probably unhappy and there is a high risk of them switching to an alternative option and potentially saying negative things about your product or brand to people they know.

Looking at your customers in this way helps you to track performance over time and also identify where you need to invest in your product or brand. If you have a large pool of detractors, you need to find ways to transform them into passive or promoter customers. Without this activity, you at risk of decline.

If you have a large pool of passive customers, there is an opportunity to transform these customers into promoters. A promoter customer should be worth significantly more to your business over the long term, as they are more likely to remain loyal and bring in other new customers. This should justify investment in creating more of these customers.

Retail is a good example of an industry where companies have visible policies to create promoters. Most large chains will offer refunds on unused items, even though they are not compelled to. Amazon sellers will often replace faulty items without requiring the customer to return the faulty item. ASOS, the online fashion retailer, allows customers to return items for free, with a variety of delivery options, in pursuit of keeping customers happy.

This approach also allows companies to track their progress over time, using what is called the Net Promoter Score. It is calculated as follows:

% of respondents who are promoters minus % of respondents who are detractors

As an example, if 50% of your customers are promoters and 10% are detractors, your score would be 40 [i.e. 50-10]. The score can be anywhere between -100 and +100. The benchmark for a ‘good’ result can vary by industry and it can often be more useful to to track your own score and how it changes year on year. However, the example above suggests 90% of customers are passives or promoters, which is probably a good result. By contrast, you might find that customers are, in general, less satisfied with energy or broadband suppliers, so a ‘good’ score in these industries might be lower.

If you’re interested to read more around the Net Promoter Score and how it is used, an online search for that term will bring up plenty of useful articles and podcasts to help you better use this approach. In the meantime, the important thing is to keep this question in your surveys, stick closely to the wording above and make sure the most senior people in your organisation buy into the metric, track it and care about it.

If you’re interested to know more about how you can use Net Promoter Scores effectively in your business, why not in get in touch for a chat: hello@intellexo.co.uk.

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