What is a Net Promoter Score?

Updated: Dec 23, 2019

In an ideal world, every company hopes to build a vast number of loyal and satisfied customers who will not only provide them with repeat business, but enthusiastically promote their company to friends and family.


Word of mouth and positive customer recommendations have countless benefits for a business, especially one in the process of establishing itself. It is a known statistic that 83% of consumers are prepared to trust recommendations from their family and friends when making a purchase decision. Just think about how many times have you acted on a recommendation when deciding where to eat, which attraction to visit, or which handyman to hire. The contrary is also true for which businesses or services to avoid based on someone’s negative experience. Therefore, a solid recommendation could be the best way to stand out from your competitors.


So what is a Net Promoter Score (NPS) and how is it relevant? A Net Promoter Score (NPS) is a metric for measuring customer satisfaction and in relation how likely a customer is to recommend a business to a friend or family member. It allows companies to track promoters and detractors, producing a clear measure of an company's performance through its customers' eyes. Bain & Company's analysis shows that companies that have achieved long-term profitable growth have NPS two times higher than the average company.


To calculate NPS, we have to start by asking customers the ultimate question, “How likely are you to recommend us to a friend or colleague?” and score the answers on a zero-to-ten scale. The responses will fall into three groups, each one characterized by different attitudes and behaviors linked to economic value. The Net Promoter Score is simply the percentage of customers who are promoters (those who scored 9 or 10) minus the percentage who are detractors (those who scored 0 to 6).


Promoters (9 to 10)

Promoters are loyal and enthusiastic fans who sing the company’s praises to friends and colleagues. They are far more likely than others to remain customers and to increase their purchases over time. Promoters account for more than 80% of referrals in most businesses.


Passives (7 or 8)

Passives are part of the group that is satisfied at least for how things are presently like. Their repurchase and referral rates are as much as 50% lower than those of promoters. They are ultimately indifferent when it comes to proactively recommending a business. They could be nudged up to the level of promoter with a few more positive experiences or they could even switch to a competitor.


Detractors (0 to 6)

Detractors are unhappy customers. They unfortunately account for more than 80% of negative word of mouth. They have high rates of churn and defection. They are customers that a business is at high risk of losing and they could also damage the brand by spreading the word about their bad experiences.



The Net Promoter System is really much more than just the score. Net Promoter System practitioners have asked customers the reasons for their ratings using an unstructured, open-ended question. This provides companies the opportunity to hear comments from customers every day. By building that feedback into their operating systems, using it both to address customer concerns and to fuel the innovations to generate more promoters.


Two Great Reasons To Track Your NPS:


1. Sets in Place a Quantifiable Goal

Improving customer experience, loyalty and satisfaction might be goals that your business is working towards. By tracking your NPS, you will be able to track your progress with customer satisfaction. It turns a quality that is qualitative into something quantitative and measurable.


2. Get Insights into Customer Behavior

Develop customer personas and find out how they are interacting with your business and the actions they are likely to take such as repeat purchases, recommendations to a friend, trying new product offers, and so on. From there, you be able to predict how different segments of your customer base will act and plan your messaging at each group in order to win them back over, retain them and improve their experience.


Three Ways To Improve Your NPS


1. Provide a Comments Section in Your Surveys

A simple step but crucial step to obtain your Net Promoter Score is by providing a space for customers to leave their comments after asking them to rate your business. This is valuable to obtain actionable feedback from your customers.


2. Be Responsive to All Customer Feedback

Collate the feedback received from your customers and look for trends. Be responsive and attentive to feedback from your customers. You may follow up with your customers in private but ensure that you be visible with your responses if they are posted in public channels. This will not only encourage real customer feedback as they know they are being heard, also it will reassure your customers that you are a proactive and accessible company.


3. Encourage Customers to Refer Your Business

Finally, ensure that your customers have an easy way to refer their friends. You may encourage customers to share their experiences with your brand on social media, leave a review, or invite their friends. Referred customers are more valuable to your business because they may have a higher lifetime value and a lower rate of churn.


Focus on Improving the Customer Experience

At the end of the day, the core of it all is to improve customer experience. By implementing a tracking metrics, we should then consider solutions that we could adopt and aim to build that base of loyal and satisfied customers who enthusiastically promote your business to friends and family.


#insureesolution #nps #customerexperience #howtogetreferrals

© Copyright 2020 Insuree Pte Ltd

100 Amoy Street Singapore 069920

  • Facebook
  • Instagram