If you’re in business, you know keeping your customers happy is critical to success. But how to know if customers are delighted with your products or services? One way to measure vital customer satisfaction metrics and loyalty questions is through the Net Promoter Score (NPS).
In this blog post, we’ll define NPS, provide examples of its use, and explain how it’s measured. Whether new to NPS or looking to improve current customer satisfaction tracking, this post will provide the background needed to get started.
What is Net Promoter Score (NPS)?
Net Promoter Score (NPS) is a metric used to gauge customer satisfaction and loyalty. Introduced in 2003 by Fred Reichheld, a consultant at Bain & Company, it has since become a popular tool for businesses to better understand how likely their customers are to recommend products or services to others.
The answer to the question “What is Net Promoter Score?” is:
Net Promoter Score (NPS) is a customer loyalty metric that measures the willingness of customers to recommend a company’s products or services to others
It is based on the idea that customers can be categorized into three groups: promoters, passives, and detractors.
Net Promoter Score scale: Promoters, passives, and detractors
Promoters are customers that are extremely satisfied with a business’s products or services and likely to recommend them to others. Passives are satisfied customers that probably won’t actively promote the company but are likely to speak positively about it. Detractors are unhappy customers that may actively discourage others from using the company’s products or services.
The Net Promoter Score scale is based on a simple question: “How likely are you to recommend [company/product/service] to a friend or colleague?” Respondents are asked to rate this on a scale of 0 to 10, with 0 being “not at all likely” and 10 being “extremely likely.”
Based on their responses, customers are divided into already-defined categories:
- Promoters (score 9-10): Highly satisfied, loyal, and likely to recommend the company to others.
- Passives (score 7-8): Satisfied but could be more loyal and may switch to a competitor if offered a better deal.
- Detractors (score 0-6): Unhappy and may spread negative word-of-mouth feedback about the company.
NPS Calculator: How to calculate NPS
Net Promoter Score calculation relies on a simple formula. All that is required is to subtract the percentage of detractors from the percentage of promoters. The resulting score can range from -100 to +100, with higher scores indicating greater customer loyalty and satisfaction.
For example, if 50 percent of respondents are promoters, 20 percent are passives, and 30 percent are detractors, the NPS would be +20 (50 percent - 30 percent).
NPS can track customer satisfaction over time and compare a company’s performance to its competitors. However, it’s important to note that NPS is just one metric and should be used with other customer satisfaction and loyalty measures.
An NPS calculator is a tool that helps businesses measure their NPS score based on customer feedback. It is an uncomplicated tool that can be used to quickly compute customer data and infer how likely customers are to recommend a firm’s product or service.
To use an NPS calculator, companies first need to collect data from customers through surveys or other feedback channels. The data is then analyzed to determine the percentage of promoters, passives, and detractors—and that’s when SurveyPlanet’s online survey builder can help.
NPS usage in different industries
NPS can be used in various industries and contexts where customer satisfaction and loyalty are crucial for success. Here are a few examples of NPS usage in different industries:
- Retail: Used to measure customer satisfaction and loyalty and to identify areas where retailers can improve the customer experience. For example, a clothing retailer would use NPS to see how likely customers are to recommend their store to others, then compare their score with those of other retailers in their industry.
- Healthcare: Providers can use NPS to measure patient satisfaction and identify areas for improvement in services. For example, a hospital could use NPS to gauge how likely patients are to recommend their facility to others and compare this with other hospitals in their region. Explore our healthcare surveys to gather valuable feedback and better provide patients with top-notch medical care.
- Tech: Measure customer satisfaction with products and services. For example, a tech company might use NPS to see how likely customers are to recommend their software solutions and compare their outcomes with other computer companies.
- Hospitality: Businesses like hotels can use NPS to measure guest satisfaction and brand loyalty, then identify areas that can be improved.
Overall, NPS can be used in any industry or context in which customer loyalty and satisfaction are essential. Businesses should want to track and improve their performance.
NPS examples in different industries
Here are a few specific NPS examples from different companies and industries:
- Apple: In 2021, Apple had an NPS of 72, considered excellent in the technology sector. Apple has consistently had high NPS scores, which reflects its loyal customer base and reputation for quality products.
- Amazon: In 2021, Amazon had an NPS of 69, which is also considered excellent for the retail industry. Amazon’s NPS score reflects its focus on customer satisfaction and its ability to provide a seamless online shopping experience.
- Delta Airlines: In 2021, Delta Airlines had an NPS of 41—above the industry average for airlines. Delta has invested heavily in customer service and amenities, which has helped it maintain a loyal customer base and competitive NPS score.
- Netflix: In 2021, Netflix had an NPS of 52, considered reasonable in the entertainment industry. Netflix has been able to maintain a strong NPS score by focusing on producing high-quality original content and providing a user-friendly streaming experience.
- Hilton Hotels: In 2021, Hilton Hotels had an NPS of 44, above the industry average. Hilton has focused on providing personalized service and amenities to guests, which has helped the brand maintain a loyal customer base and competitive NPS score.
NPS scores vary widely depending on the industry and company—though higher scores generally indicate greater customer loyalty and satisfaction.
What is a good NPS score and how does it vary from industry to industry?
Scores can vary significantly from industry to industry—even from company to company within the same industry. Customer expectations and experiences deviate widely depending on the product or the nature of the service.
For example, industries that provide essential services—such as healthcare or insurance—may have lower NPS scores than industries that provide nonessential goods and services, like luxury goods or entertainment.
This is because customers in essential industries usually have fewer purchasing options and may only sometimes have positive experiences, whereas customers spending in nonessential industries might be more likely to have positive experiences—and subsequently recommend the product or service in question.
Additionally, customer demographics can also impact NPS scores. Younger customers often give high NPS scores to companies prioritizing sustainability or social responsibility. In contrast, older customers may prioritize factors such as reliability and quality.
Overall, there is no uniform answer to the question of what is a good NPS score, which can vary widely depending on the industry and customer demographics. Therefore, comparing scores within the same industry and from similar customer demographics is indispensable. This can help companies identify areas to improve and stay competitive.
Net Promoter Score and SurveyPlanet
NPS is a metric used with customer satisfaction surveys to measure how likely customers are to recommend a company’s product or service to others. Surveys are a vital tool in collecting the data needed to calculate NPS.
What is an NPS survey? Read our blog and learn everything about it.
Companies can use various survey methods—such as email, phone, or online surveys—to gather customer feedback. Responses can then be used to calculate the company’s NPS score and identify areas where they need to improve their customer experience.
Overall, NPS scores and surveys are closely connected, since surveys provide the data needed to calculate NPS and monitor customer satisfaction over time.
Use SurveyPlanet’s online survey builder to utilize all the potential NPS can bring. Use our premade templates and question examples or make a survey with a touch of branding from scratch with our white label tools.
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