A guy walks into a bar and asks, “What do you think about NPS?” A woman responds, “Over 327 million people visited National Parks Service locations in 2019, so I guess the NPS must be popular.” Next, a man declares, “I graduated from Naval Postgraduate School and my NPS degree was the highlight of my career.” The bartender calls out, “Did you know our Vienna Lager has a Net Promoter Score of 60, the highest NPS of any of our beers?” Mark Pushinsky, a Hard Yards Certified Scrum Trainer smiled and thought to himself, “I should have these folks sign up for my online Certified Scrum Product Owner course. After all, my last five courses averaged a Net Promoter Score of 90!”
For the purposes of this post, let’s agree NPS = Net Promoter Score. Even if we settle on the meaning of NPS, how do you measure the score and what impact does the score have on your organization? Calculating NPS is surprisingly simple (Figure 1).
Figure 1. Net Promoter Score Survey
You begin with a one question survey: “How likely are you to recommend our business to a friend?” Respondents answer on a scale of 0 (not likely) to 10 (very likely). We group responses into three categories: Promoters (9, 10), Passives (7, 8), Detractors (0 – 6). To calculate the NPS, we ignore the passive percentage and subtract the detractor percentage from the promoter percentage. Here’s an example of a very good NPS score from a fictional company with 100 respondents (Figure 2).
Figure 2. Net Promoter Score Example
As this NPS example indicates, achieving a positive NPS score of 65 requires three-quarters of customers to respond as very likely (9 or 10 rating) to recommend your business to a friend while only one-tenth of customers reply as not likely (0 to 6 rating) to endorse your company. As a reminder, “passive” respondents, who rated your product or service at 7 or 8, will decrease your NPS score. While a response of 7 or 8 indicates your customer was satisfied with your company, this customer will most likely not encourage others to use your product. For example, if you swapped the “passive” and “promoter” percentages in Figure 2 while maintaining 10% “detractors,” your NPS would plummet to 5.
Figure 3. Quick Guide to Net Promoter Score
Let’s explore the range of NPS scores and how high scores can relate to business growth. A quick guide to NPS scores from “usefyi.com” shows how NPS scores greater than 30 indicate a satisfied customer base. On the other hand, NPS scores less than 30 signifies unsatisfied clients whereas an NPS less than zero shows your customers are having bad experiences (Figure 3). According to Retently, a customer satisfaction consultancy, Netflix (68), Starbucks (77), and Amazon (62) are NPS market leaders. On the other hand, a leading cable television provider and large bank embroiled in a recent scandal had negative NPS scores. The connection between high NPS scores and sustainable growth occurs along two separate paths. First, high customer satisfaction leads to repeat use of your product. Second, delighted clients will refer your company to other potential customers.
Retention and referrals will sustain and grow your firm…and if you maintain a laser focus on NPS, you can even enhance your partnerships. Stay tuned for another blog describing how customer feedback broadened and strengthened a partnership between Hard Yards and MURAL.
Picture for Social Media (Curly (Jack Palance) from “City Slickers” who asks Mitch (Billy Crystal): Do you know what the secret to life is? You stick to one thing, and the rest don’t mean s&*t!”