Net Promoter Score® (NPS) is a metric that tells companies how happy and loyal their customers are. Organizations use it to determine whether the services, products, and customer service they provide meet customer standards and expectations. But what does NPS mean, exactly, and how can you use it in your company to improve customer experience (CX)?

Customer Video

SiriusXM Uses Data from CallMiner to Drive Sales, Marketing & Programming Decisions

Learn how this customer Uses CallMiner data for sales, marketing & programming decisions

We’ll dig into the answers to those questions in this guide. In this article:

• What does NPS mean, and why is it important?
• How to leverage NPS to appeal to customers
• Balance NPS With other metrics for deeper CX insights
• Frequently asked questions

What does NPS mean, and why is it important?

Have you ever taken a survey for a company after buying a product or service with the following question using a scale from 0-10?

“How likely are you to recommend our product to someone you know?”

If so, your score will help make up the company’s Net Promoter Score®, or NPS, a metric established by Bain & Company. NPS comes from this one question that helps brands determine whether their customers are happy with the product or service they bought and are likely to stick around.

NPS identifies three kinds of customers: promoters, passives, and detractors. Promoters are those who answer with a 9 or 10—they help boost the NPS. Passives choose 7s or 8s. They’re in the middle; they don’t dislike your product, but they don’t necessarily love it either. Detractors can reduce NPS by answering 6 or below on their surveys.

To calculate your NPS, add the number of promoters, passives, and detractors separately. Divide each one by the total number of survey respondents to get a percentage. Then, subtract the percentage of detractors from the percentage of promoters.

Here’s an example of a survey of 1,000 respondents:

• The survey has 500 promoters, 300 passives, and 200 detractors.
• Turn these into percentages by dividing each number by 1,000, the total number of respondents: 50% promoters, 30% passives, and 20% detractors.
• Subtract the detractors from promoters: 50% — 20% = 30%.
• In this example, the NPS is 30.

An NPS of 30 would be considered okay, but not great. The closer you are to 100, the better, but earning a perfect NPS of 100 is nearly impossible. Generally, a score of 20-49 is considered acceptable, while 50 and above is excellent.

However, NPS can vary significantly among industries and competitors, so it’s important to consider it with a wide lens. For example, if you have a 50 NPS – typically considered an excellent score – but your competitors hover closer to 60, your score indicates that you might be falling behind your competition in key areas.

How to leverage NPS to appeal to customers

NPS is designed to give you insight into your customers’ overall feelings about your products and services. Use that information to your advantage to build loyalty and improve customer experience.

Use NPS to build and improve your VoC program

Voice of the Customer (VoC) programs gather insights from customer feedback, giving you opportunities to make adjustments to your products and processes to meet customer needs.

To deliver great omnichannel #CX, you need to gather the right intelligence. Understanding what your customers are saying is the first step to improving loyalty and driving company growth and revenue.

Our recent blog breaks down 4️⃣ VoC methodologies: https://t.co/H26XEvynQy

— CallMiner, Inc. (@CallMiner) August 30, 2022

NPS provides an excellent opportunity to get even more feedback from your customers simply by adding a question after the rating: “Why did you give this score?” This question provides space for customers to explain their rating and gives you more context behind the rating to drill down specific issues or things you’re doing well.

Continue engaging promoters

Promoters can increase your NPS, so it’s important to continue engaging promoters to encourage them to keep sharing positivity about your brand.

For example, you might create a referral or loyalty program that rewards them for positive interactions with your brand, like sharing their favorite products with friends or leaving a product review. You might also tag them for a shoutout on social media or update them via email when you’ve made changes using their feedback.

Turn detractors into promoters

Detractors take away from your NPS, so swapping them from detractors to promoters can significantly increase your score. Acting quickly on their feedback can help, like being diligent about following up with customers who leave negative reviews or respond negatively to your customer survey. Ask for more detailed feedback and offer a solution you can manage right now before promising to use their feedback to improve your products or services in the future.

Then, follow up with detractors after implementing changes, just like you would with promoters.

Personalize your marketing efforts

Not all customers want and need the same things from your company, and your marketing should reflect that. Your NPS can tell you that you have different types of audiences that may respond to different marketing techniques and messaging. Use the feedback you gather to cater to the right audiences, whether it’s marketing on different platforms or using varied messaging to personalize campaigns.

Compare your NPS with your competitors

While your NPS might seem low, it could be higher than your top competitors—a good sign that you’re heading in the right direction. Instead of focusing solely on your number, do some market research to see how your NPS compares to the companies closest to yours in terms of products or services, audience, and revenue. Look for NPS benchmarking services to see how you compare.

Balance NPS with other metrics for deeper CX insights

NPS is just one piece of the puzzle that helps you transform your company to meet your customers’ wants and needs. Combine it with other metrics, like customer acquisition cost, churn rate, and customer lifetime value, to understand the full CX picture.

The CallMiner platform gathers insights from every customer interaction across the buying journey and multiple channels, providing the actionable insights you need to improve CX and boost business performance. Request a demo today.

Frequently asked questions

What is NPS used for?

NPS helps businesses determine how well their products or services meet the needs of their customers. It can be used to personalize marketing efforts, follow up with both loyal and unhappy customers, and improve products and services.

What is a good NPS score?

A good NPS score of 20-49 is generally considered acceptable, and 50 or above is an excellent score. However, a good NPS score can vary by industry. For example, Delighted reports that the average NPS in the banking industry is 32, while 33 is considered high for the internet service industry.

How is NPS measured?

Measure NPS by asking customers to rate their satisfaction with or how likely they are to recommend your company from 0-10. Promoters score 9s and 10s, and detractors score 6s and below.

Add all promoters and divide that number by the number of total respondents. Do the same for detractors. Then, subtract the detractor percentage from the promoter percentage. The result is your NPS.