The NPS index, acronym for Net Promoter Score, is considered the main metric for measuring customer satisfaction and loyalty worldwide. The question posed by the NPS is not limited to measuring the degree of customer satisfaction but is formulated to evaluate the intention of a customer to recommend a product, a service, a company to others.

The question posed by the NPS is:

How likely is it that you would recommend this product (this service, this company) to a friend or colleague?

 

This question is considered a final question (Americans call it the “ultimate question”) because it tries to figure out how many users are supporters, neutral or critical. Due to this ability to count the people who generate a positive, neutral or negative word of mouth, the index is important for the predictive analysis of the company’s performance.

The consulting firm Bain & Company links the NPS index to the degree of success of a company, highlighting how the top companies are those with the highest NPS index .

 

The steps required to measure NPS are:

1. Prepare a survey
2. Collect feedback
3. Calculate the index

 

Prepare the survey

The NPS is based on a single question that emphasizes the intention to recommend a product, service, or company itself to a loved one. It must be expressed as:

How likely is it that you would recommend our service to a friend or relative?

 

 

Collect feedback.

The answer is a number ranging from 1 to 10.

The answers from 1 to 6 express a criticality on the part of the user, who is considered critical towards the company and therefore generates a negative word of mouth.

Answers 7 to 8 are considered neutral. People who have provided such answers will tend not to generate word of mouth.

The answers from 9 to 10 express great satisfaction from the user, who is defined as a supporter of the company, capable of generating a positive word of mouth.

 

 

Calculate the index.

The index is generated as the difference between the percentage of positive and negative responses obtained on the total number of responses collected.

So the formula is:

NPS = (% Promoters -% Detractors) x 100

 

Calculation example

Suppose an insurance company administered a survey in which it asked:

“How likely would you be to recommend our consultancy service to a friend or acquaintance?”

Let’s assume he got the following results

 

1	2	3	4	5	6	7	8	9	10
2	3	2	5	4	10	8	9	8	10
Detractors						Neutral		Supporters
26						17		18
42%								29%
NPS = -13

 

NPS survey tools are a great way to quickly assess your customer loyalty and find out how you can improve customer satisfaction and experience, support, and more – understanding your NPS provides powerful insights that will surely help you to grow better.

 

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