What is a Net Promoter Score or NPS?

Tara Callinan imageTara Callinan  •  

What is a net promoter score or NPS

According to Satmetrics, a Net Promoter Score, or NPS, is an accurate indicator of customer satisfaction and predictor of business growth. A company’s Net Promoter Score is determined by calculating the sum of total answers to this question: On a scale of 0 to 10, how likely is it that you would recommend [insert company or product] to a friend or colleague?

To calculate the Net Promoter Score, you must group the answers as follows:

  • Promoters (customers who answered 9 - 10): Loyal enthusiasts who will keep buying and refer others, in turn, fueling growth.

  • Passives (customers who answered 7 - 8): Satisfied but unenthusiastic customers who are vulnerable to competitive offerings.

  • Detractors (customers who answered 0 - 6): Unhappy customers who can damage your brand and impede growth through negative word-of-mouth.

Then, subtract the percentage of Detractors from the percentage of Promoters to get the total Net Promoter Score. In some cases, the NPS can be as low as 0 and as high as 100.

How important is a Net Promoter Score?

To understand the importance of a NPS, think of it as a consumer review. For example, a consumer is more likely to purchase a construction app with a 4.7-star rating in the App Store compared to one that has anything less. That's because reviews and referrals are taken very seriously and often persuade final decision making in a buyer's journey. In fact, 92% of consumers trust recommendations from others — even people they don’t know — over branded content. And, as it turns out, these include the good, bad, and ugly recommendations. Groove’s survey found that the average American customer tells nine people about a good experience and 16 people about a bad experience. Therefore, the most successful companies or products with positive customer reviews will, in turn, have a high NPS.

What is a high NPS?

It’s important to note that a ‘high’ NPS differs from industry to industry. For example, the average Net Promoter Score for Software and Apps is 31, compared to 62 for Department Stores. A snapshot of all industry averages can be seen below, and a full list of all industry averages can be found here.

Average NPS by Industry

While it’s important to compare your NPS to competitors in your industry, it’s also important to compare your own NPS overtime to see if customer satisfaction is improving. At Fieldwire, our NPS score is improving, with almost 50 percent of survey respondents giving us a perfect score in 2018 to put us well above the industry average. A snapshot of company-specific Net Promoter Scores can be seen below and a full list can be found here.

nps by company

How to improve your NPS

According to Wootric, there is not a single magic solution, but rather three best practices to improve your NPS:

1. Follow-up with Detractors. Your priority should be conflict resolution.

2. Try to engage with Passives. Use software that is real-time to ensure efficient communication with customers.

3. Always thank Promoters. But not too much. Asking customers to continually provide feedback could make them feel smothered and less inclined to participate in surveys.

We’d like to thank our customers who continually send us feedback and ideas which help us improve our product and service even further. Please don’t hesitate to contact support@fieldwire.com to submit a request at any time.

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