Do you really know how your customers feel about your business? With NPS, you can measure customer loyalty in a way that’s simple, actionable, and effective. You’ve probably heard about this key metric several times so maybe it’s time to learn more about it? Let us guide you through the concept!
NPS (Net Promoter Score)
What is NPS and how does it work?
Net Promoter Score, or NPS, is a simple yet effective way to measure customer loyalty and satisfaction. With just one straightforward question, you can gain valuable insights into how your customers truly feel about your business, products, or services. It’s commonly included in customer satisfaction surveys and sometimes also in employee satisfaction surveys where it’s referred to as eNPS (employee net promoter score).
At its core, NPS revolves around one key question: “On a scale of 0 to 10, how likely are you to recommend us to a friend or colleague?”
Based on their answers, your customers are grouped into three categories:
Promoters (9-10): These are your biggest fans—loyal customers who love what you do and happily recommend you to others.
Passives (7-8): These customers are satisfied but not overly enthusiastic. They might stick around, but they’re also open to switching if a better offer comes along.
Detractors (0-6): Unhappy customers who could damage your reputation by sharing negative feedback.
How to calculate
Calculating your NPS is not that difficult: Take the percentage of customers who are promoters and subtract the percentage of detractors.
NPS = % Promoters – % Detractors
For example: If 60% of your customers are promoters and 20% are detractors, your NPS is 40. Scores range from -100 to +100, and generally, anything above 0 is a good sign.
What is a good score?
This is a common question that we get from companies starting to track their Net Promoter Score. A “good” NPS score can vary by industry, but in general:
A score above 0 is positive, indicating you have more promoters than detractors.
A score above 50 is excellent and shows high customer loyalty.
A score above 70 is world-class, achieved by top-performing companies.
Remember, it’s important to benchmark your score against competitors in your industry to get a clearer picture of where you stand.
How often should I measure?
The frequency of measuring NPS depends on your business and goals:
Quarterly or semi-annually: For a regular pulse on customer satisfaction and loyalty trends.
After key interactions: Such as after a purchase, onboarding, or customer support interaction.
Continuously: In businesses with high customer touchpoints (e.g., SaaS or e-commerce), use a rolling survey approach to capture ongoing feedback.
The key is to measure often enough to identify patterns and act on feedback without overwhelming your customers with surveys.
Why Does NPS Matter?
NPS is much more than just a number—it’s a window into how your customers perceive you. By tracking your score, you can:
- Pinpoint areas where you need to improve.
- Understand what keeps your most loyal customers coming back.
- See how you stack up against competitors and industry standards.
The best part? Businesses with a strong NPS tend to grow faster, keep more customers, and enjoy a better reputation overall.
Start tracking your NPS
Did this make you curious? If you’re looking to create an outstanding customer experience, NPS is an excellent starting point. By leveraging insights from real customer feedback, it allows you to make smarter, data-driven decisions. It also helps strengthen relationships with your customers, fostering trust and loyalty. Ultimately, NPS can be a powerful tool to drive long-term growth and ensure your business thrives.
Ready to see what your customers really think? Get in contact with RAIT today and we’ll help you set up a process that fits your company’s needs.
