Net Promoter Score: an indispensable tool for measuring customer/user satisfaction

The Net Promoter Score has become an essential indicator of customer satisfaction. Many companies have already adopted it, and for good reason. Known by its acronym NPS, it helps to distinguish between satisfied and dissatisfied customers, and better still, it helps to identify brand ambassadors, understand how to retain them and turn them into powerful acquisition levers.

But then, how and why use an NPS survey? Here's what you need to know.

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1- Net Promoter Score :  Definition

The Net Promoter Score (NPS) is an indicator widely adopted and used by companies. Promoted by Frederick Reiccheld in the early 2000s, it measures customer satisfaction and loyalty to a brand, product or service. It is based on a single question: “Would you recommend this application? The answer is given on a scale from 0 (“Not at all”) to 10 (“Absolutely”).

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Based on their answers, users are classified into three categories:
- Detractors (score of 0-6): They are not particularly satisfied or even disappointed by the product or service. They will therefore share their negative experience with others, which can damage the reputation of the brand, product or service.

- Passives (score of 7 or 8), also known as neutrals, are neither satisfied nor dissatisfied. Passives are convinced by the quality of the product or service, without being enchanted. They can easily change service providers if the opportunity arises. For this reason, they will not speak ill of the brand, but neither will they promote it.

- Promoters (score of 9 to 10) are the brand's most fervent customers. Highly satisfied with the quality of the product or service, they are loyal and even become brand ambassadors. They recommend the brand to friends and family, sharing their own experiences.

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‍2- How to calculate your NPS? 

The NPS score ranges from -100 to 100.
Once you've collected the results of your survey, you first need to exclude the “passive” category and convert the number of respondents in the other two categories (promoters and detractors) into a percentage. To calculate the Net Promoter Score, subtract the percentage of detractors from the percentage of promoters.

For example, out of 1000 respondents, you'll get:

• 250 detractors (25%)
• 450 promoters (45%)
• 300 passives (30%)

The NPS score obtained will be 20

Calculation formula: [Percentage of promoters ] - [ Percentage of detractors ] = NPS ScoreSo: 45-25 = 20

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Once the NPS score has been calculated, how do you know whether it is positive or negative? 

Firstly, to qualify as a good NPS score, it must be positive. As we have already seen, the Net Promoter Score can vary from -100 to 100. To help you understand the score obtained, here is a suggested scoring scale.

• 100: The ultimate and very unattainable score, let's be honest.
• 100% of participants are ardent brand supporters. They're all delighted with the product or service.
• NPS greater than 70: very rare, indicating a fan base and exceptional brand popularity.
• NPS greater than 50: considered excellent, with a majority of very satisfied customers.
• NPS greater than 0: considered good, indicating as many fans (those who recommend the product) as neutral or critical people.
• NPS negative: a majority of participants don't appreciate the product or service and will therefore be unlikely to recommend it positively. This is an important warning to take into account, so that we can quickly make improvements.
• -100 means that nobody likes the product or service. This is the worst-case scenario.

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3- Advantages and limitations of an NPS survey

There's nothing magical about the Net Promoter Score. Like any metric, it offers many advantages, but also has certain limitations.

Advantages

- Simple and easy to use

The NPS is simple to administer, as it is based on a single main question: “How likely is it that you would recommend our product/service to a friend or colleague?” This simplicity means that responses can be collected quickly and without complicating the respondents' experience.

- Clear results

The NPS calculation is straightforward and easy to understand. Based on a scale of 0 to 10, it classifies respondents into three categories, and the final score is intuitive to give a clear indication of the overall health of the customer relationship.

- Comparability

NPS is a standardized indicator that enables customer satisfaction to be compared across different industries, companies or time periods. This facilitates internal and external benchmarking, enabling companies to situate themselves in relation to the competition, or to track the evolution of their performance.

‍- Action-oriented

NPS is strongly correlated with customer loyalty and their likelihood to recommend the company. A low NPS score encourages corrective action to improve the customer experience. In addition, it encourages companies to focus on converting detractors into promoters, thereby increasing growth potential through positive word-of-mouth.

‍- Customer care

NPS surveys often include an open-ended question allowing customers to explain their rating. This provides valuable qualitative insights that can reveal specific issues or opportunities for improvement. This feedback can be used as the basis for further analysis and customer service initiatives.

- Fast feedback

The NPS survey's concise format enables rapid data collection, facilitating near-real-time analysis. Companies can therefore react quickly to problems or capitalize on opportunities identified by respondents.

‍- Impact on strategy

NPS is often used as a key performance indicator (KPI) in organizations. It helps align teams around the common goal of improving the customer experience, facilitating communication and collaboration between different departments.

- Growth forecast

NPS is a good predictor of a company's future growth, as it is linked to the likelihood of positive recommendations and customer loyalty. A high NPS is often associated with better customer retention and lower customer acquisition costs.

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Limits

The Net Promoter Score (NPS) is a commonly used indicator for measuring customer satisfaction and loyalty. However, despite its usefulness, it has certain limitations. Here are some of the main ones:

- Excessive Simplicity

NPS is based on a single question: “How likely are you to recommend our product/service to a friend or colleague?” This simplified approach doesn't capture the full complexity of customer feelings and opinions. Important nuances about the reasons for satisfaction or dissatisfaction can be lost.

- Lack of specificity

NPS does not provide detailed information on the specific aspects of the customer experience that need to be improved. For example, a customer may give a poor rating because of a specific problem (such as customer service or product quality), but NPS alone does not reveal this cause.

- Response bias

NPS responses can be influenced by biases. For example, very satisfied or very dissatisfied customers are more likely to respond to the survey, while those who are neutral or moderately satisfied may not pay attention. This can distort the results.

- Cultural influence

Perceptions of the rating scale can vary from culture to culture. For example, in some cultures, people are naturally more inclined to give high or low scores, which can affect the comparability of results between different countries or regions.

- Temporality of responses

NPS reflects a snapshot of how customers feel at a given moment. Opinions can change rapidly for a variety of reasons (such as a recent bad experience or service improvement), and NPS does not capture these dynamics on an ongoing basis.

- Actionability

Although NPS gives an overall indication of customer loyalty, it can be difficult to translate a score into concrete actions without additional information. It is often necessary to supplement the NPS with qualitative surveys to understand the reasons behind the scores and identify specific avenues for improvement.

- Influence of Context

Answers can be influenced by the context in which the question is asked. For example, just after a recent positive or negative interaction with the company, answers may be biased by that immediate experience, rather than reflecting a general opinion.

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In short, NPS is a useful but limited indicator. It is often preferable to use it in combination with other evaluation methods to obtain a more complete and nuanced view of customer satisfaction and loyalty.

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Conclusion

The Net Promoter Score (NPS) is a powerful and widely adopted tool for measuring customer satisfaction and loyalty. Its simplicity, clarity and action potential make it the indicator of choice for many companies seeking to understand the state of their customer relationships and guide their improvement strategies. However, despite its many advantages, it has several limitations (cultural influence, temporality, complexity of feelings, etc.). Weloop makes it possible to combine an NPS form with a satisfaction survey, to obtain a more complete view of user satisfaction, identify the real levers of loyalty and guide your actions more effectively. Would you like to find out more? Contact us

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