All the things are relative and to measure them we always need a scale of comparison. Net promoter score (NPS) is a similar thing made to judge whether a company is doing good or average or even below average. It is a really simple idea to keep track of how good your initiatives are for the customers, which breeds loyalty among them.
Are Recommendations really important?
Statistics show that verbal referral, especially by trustworthy friends and family members, is the most effective way of marketing. Moreover it shows the loyalty of the customer which in turns increases the turn over for the company, as loyal customers keep buying from the company. NPS can be measured at start and then with different variables in consideration, to adjust the outcome and increase sales.
What NPS can show a business Owner
NPS can show a multitude of things to a company in a really simplified way. It gives a ground value of whether people like your company in general or not. It shows you the type of audience you are attracting and the general feelings of consumers about the brand. Some people argue that it does not show the correlation of recommendation but if it does then it counts as a really helpful index. If you are successful then maybe someone will recommend your company to their followers over the internet and it can reach a lot of followers hence the importance of positive review.
Simplified Picture of NPS Measurement
The first question asked is the likelihood that a person will recommend you to someone else. There are a lot of software to help with the survey. Two scales are used: 0-10 scale and 1-7 scale with latter becoming more popular. The NPS is then calculated by subtracting percentage of detractors from promoters.
The range is from -100 showing all detractors to +100 showing all promoters. Anything positive is considered good and above +50 is excellent.
On a 0-10 scale, people who select
- 9 or 10 are promoters
- 7-8 are passives
- 0-6 are detractors
On a 7 point scale, people who select
- 7 are promoters
- 5-6 are passives
- 1-4 are detractors
Add up the “promoters,” “passives,” and “detractors.” Some software can calculate percentage of each group otherwise it can be calculated by this method
- Export responses from your questionnaire/survey into a spreadsheet.
- Divide respondents into detractors, passives, and promoters.
- Add up the total responses from each.
- Divide the group total by the total survey responses to get the percentage total of each group. Or use a percentage calculator to make it easier.
- Subtract the percentage total of detractors from the percentage total of promoters.
(promoters – detractors) / (respondents) x 100
This is your NPS!
The scale is helpful but not perfect.
Disclaimer: Intellegens Inc is not legally responsible for any damage that may be caused while following the above mentioned steps. If you are part of an organization, please contact our support team at 1-877-575-9961 for further assistance.