How to conduct NPS Survey 1

What is NPS®?

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What is NPS® ?

NPS® or Net Promoter Score® is a type of customer satisfaction metric that measures consumer satisfaction and loyalty. Companies use this tool to ask their customer base how likely they recommend them or their products to others. 

NPS® Survey Questions

NPS® surveys usually have just one question, and it is often framed like so; “On a scale of 0 to 10, how likely are you to recommend us to family or friends?”. This question can be changed depending on how a company chooses to frame it, but it will always ask about the customers’ likeliness to recommend the company or its products.

These are a few different ways in which an NPS® question may be framed:

  • On a scale of 0-10, how likely are you to recommend (name of the product) to others?
  • On a scale of 0-10, how likely are you to recommend (name of company) to friends, family, or a colleague?
  • On a scale of 0-10, how likely are you to recommend (name of service) to friends or family?

Following the question is a 10 point scale, 0 being least likely and 10 being most likely. Some NPS® surveys have more than one question; however, this may make the calculation of the NPS® score more difficult.

These are some common additional questions on NPS® surveys that have more than one question:

  • What can we do to improve your experience?
  • What was missing in your experience with us?
  • Which products/services of ours do you enjoy the most?

These questions are helpful in identifying where the company can improve in order to better the experience of their customers and potentially increase their NPS® score.

NPs 2

Types of Respondents of an NPS® Survey

Depending on the score the respondent chooses on the survey, they will be categorized into the following groups:

  1. Respondents who choose a score of 9 or 10 are Promoters.

Promoters are the customers who are most likely to recommend the company or its products/services to other people. These customers are very pleased with their experience with the company and want to spread a good word about it. Promoters help improve brand image and attract new customers for the company.

2. Respondents who choose a score of 7 or 8 are Passives.

Passives are respondents who are rather indifferent toward the company. They aren’t likely to speak badly of the company, nor are they likely to speak well of it; corresponding to the name, these set of customers are passive in regard to spreading the word of their experience with the company. They may like the company but perhaps not enough to recommend it to others.

3. Respondents who choose a score between 0 to 6 are Detractors.

Detractors are the most damaging to a company’s reputation and brand image. These customers are not satisfied with the company or its products, and likely have nothing positive to say about it. Detractors may also dissuade potential customers from purchasing from the company.

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NPS® Score Calculation

After all survey respondents are categorized into the three groups, the following formula is used to calculate the company’s NPS® score:

NPS® = % of promoters – % of detractors

NPS® scores range between -100 and 100. 

What is a good NPS® score?

There are two ways to interpret an NPS® score: the absolute method and the relative method. 

In the absolute method, any positive score (scores above zero) are thought to be good as it means the company has more promoters than detractors. On the other hand, negative scores (scores below zero) are interpreted as bad as the result when the company has more detractors than promoters.

The relative method interprets the score relative to the industry standard/benchmarks. For example, if a tech company has an NPS® score of 45 while the industry standard is 50, then they have a bad NPS® score. However, if they have an NPS® score of 60 while the industry standard is 50, then the company has a good NPS® score.

Types of NPS® Surveys

There are two main types of NPS® surveys: Relationship surveys and transactional surveys.

Relationship surveys are sent to customers on an interval basis, for example, monthly or half-yearly. Transactional surveys, on the other hand, are sent to customers after key interactions with the company. Transactional surveys tend to be more focused on identifying a degree of customer satisfaction, whereas relationship surveys are more focused on identifying a degree of customer loyalty.

Where are NPS® Surveys conducted?

  1. On-site/Website Surveys 

On-site surveys can be put on a website’s exit page (pop up before they close the website) or on a conversion page (for example, right after a completed purchase on the website).

2. Surveys via Email

These are usually sent after a purchase or a key interaction with the company. Relative to on-site surveys, these surveys require more effort on the customer’s part to fill out as they will be redirected to a separate page to fill out the survey.

3. In-app Surveys

In-app surveys are also relatively more convenient for a customer to fill as apps tend to have a smooth user-interface, and respondents can fill out the survey more effortlessly.

Different companies may choose different mediums through which they send their surveys depending on what is best suited for them. This could depend on a number of factors, such as which medium has the biggest reach or on the type of survey they are sending (NPS® relationship survey vs. NPS® transactional survey).

Advantages of conducting NPS® Surveys

  1. It helps segregate the customer base

Segregating the customer base allows companies to identify which customer groups should be focused on to improve their experience. Detractors can be prioritized in order to make them promoters or even passives.

2. Measures customer loyalty

The cost for acquiring a new customer (CAC or customer acquisition cost) is significantly higher than the cost of maintaining an existing customer. This exaggerates the importance of keeping existing customers happy so as to not lose them to competitors.

3. Identifies ways in which the company can improve

By identifying the ways in which they can improve, companies can increase customer satisfaction and loyalty which will positively affect their business.

Net Promoter®, NPS®, NPS Prism®, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld. Net Promoter Score℠ and Net Promoter System℠ are service marks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.

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