Written by Tom Doodson, Sales Account Manager, Fitronics
What Is Net Promoter Score®?
NPS®, formally known as ‘Net Promoter Score’, is a widely recognised way of assessing the loyalty of an individual or group of customers. Using just one simple question, Net Promoter Score allows you to gauge how likely someone is to recommend your business to a friend, family member or colleague.
How Do I Measure My Business’ Net Promoter Score?
The NPS Question
To discover an individual’s Net Promoter Score you ask them the following question:
The member gives a score from 0 to 10, with 0 not at all likely and 10 extremely likely to recommend.
It is best practice to follow the NPS question with a ‘why?’ question, to help establish the reason behind the score and how to go about improving it (if it is not already a 10!). It is also a great way to gain valuable testimonials about why people are such fans of your business, for use in your marketing messaging!
Detractors, Passives and Promoters
The score that the respondent gives will dictate which NPS category they are placed in.
Customers giving a score between 0 and 6 (inclusive) are called Detractors.
Not impressed with your offering, Detractors are unlikely to recommend you to a friend, colleague or family member. In fact, based on their perceived bad experience/s, they are more likely to warn people not to join your club. If you don’t do something about their ill feelings, they are heading towards canceling their membership.
Customers giving a score of 7 or 8 are called Passives.
Passives are best described as ‘sitting on the fence’. They are indifferent to your service. They think you are good, but they are not enamored. Whilst not a high-risk of cancellation, a Passive could easily be tempted elsewhere by a ‘better’ offer – whether that is a new club opening up slightly closer to home or just a different way of spending their leisure time.
Customers giving a score of 9 or 10 are called Promoters.
Promoters are great! They are the loyal, raving fans of your business who cannot wait to tell everyone how fantastic you are. They are like a giant sales force that you do not have to pay – organically spreading the word far and wide and building your reputation for you! The more Promoters you have the better, as we shall see when calculating organisational NPS, below.
The NPS Equation
To calculate your overall business or departmental NPS you need to look at the proportion of your members who fall into the categories of being a Detractor or a Promoter (Passives are consciously left out of the calculation).
The NPS equation is as follows:
% Promoters – % Detractors = NPS
So, for example:
|NPS Category||Number of Customers||Percentage of Overall|
60% – 30% = 30
NPS = 30
Your goal should be to move as many of your members as possible up the Net Promoter scale by using the feedback they provide you in answer to the Net Promoter Score question to inform improvements.
The higher your NPS the better.
NPS is a fantastically simple and tangible measure of member satisfaction and loyalty that could revolutionize your business.
To learn more about Net Promoter Score and how it will improve member satisfaction, loyalty, and, ultimately, retention in your business, contact us today at email@example.com for a free consultation.
Net Promoter, Net Promoter System, Net Promoter Score, NPS and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.