NPS: A Quick and Dirty Primer for the Uninitiated

Unless you’ve been living on Mars, you’ve likely seen how companies have tapped the power of NPS to learn more about the customer experience, drive customer retention, and help create better efficiencies. You may not have even realized what it was at the time, or what you were responding to, but it can be a vitally useful tool for businesses.

Before I get carried away, what is NPS? NPS is short for Net Promoter Score and is one of the best ways to predict a customer’s future behavior. It starts by asking them one question: How likely are you to recommend us to a friend or colleague? (We’ve all gotten those emails, right?) Sometimes there might be some follow-up questions to clarify the reasoning for their response.

The NPS equation. Source: Trust Mary

The customer answers between 10 (extremely likely) and 0 (not at all likely). Anyone who responds with 9-10 is considered a Promoter. They are your rock star customers, actively promoting your service or product. Next, at 7-8 are the Passives. They are satisfied for the most part, but, meh, unenthusiastic and vulnerable to competitors.  Finally, any score from 0-6 is a Detractor, an unhappy customer who can undermine your brand and hinder growth through negative word-of-mouth. Once you’ve figured out your percentage of Promoters and Detractors, subtract your Detractors from your Promoters and *POOF* Net Promoter magic. In other words, you have your NPS.

A Net Promoter Score runs from -100 to 100. Anything above 0 is considered positive for that business, but anything above 50 is good (meaning the company has a solid, supportive customer base). Although, a score above 70 is outstanding, and the company should probably be bottling and selling its secret sauce.

In fact, some well known brands boast some pretty impressive Net Promoter Scores according to Retently.

  • Netflix’s NPS is 68. Instead of Netflix and chill, may I suggest Netflix and NPS?
  • Starbucks’ NPS comes in at a highly-caffeinated 77.
  • Amazon’s NPS towers over the competition at 62.
  • And Tesla puts all others to shame at 96.

At first glance, these companies are very different. What does an online streaming service have in common with a coffee company, an online retailer, and an electric car manufacturer? They all offer quality products/services, a streamlined and simple experience, and they make interactions with their customer service painless. Essentially, their NPS successes serve as lessons for other companies following in their footsteps.

However, NPS doesn’t have to be overly complicated. How likely are you to recommend us to a friend or colleague? It can be as simple as that. And you are on your way to collecting useful data to help retain customers and improve customer pain points.

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