NPS
Net Promoter Score (NPS), measures customer loyalty and works by understanding how likely customers would be to recommend a company’s products or services to others – friends, family, colleagues etc.
It is used to measure customer experiences and to predict business growth.
NPS is calculated using a single question, often positioned as: Using a scale of 0 to 10, how likely are you to recommend this company’s product or service to a friend or a colleague?”
Based on their answers, customers are placed into 1 of 3 categories: promoters, passives and detractors.
Promoter.
Those answering 9 or 10
These are the people loyal to your brand who love the company’s products and services. They are repeat purchasers and actively recommend your company’s products and services to others, helping to drive growth.
Passive.
Those answering 7 or 8
These customers are satisfied but are at risk of switching and taking up competitor offers. They are unlikely to be recommending your company to others, but equally they’re unlikely to be talking about it negatively either.
Detractor.
Those answering 0 - 6
These are the customers who are not happy with your products and services. They can have a detrimental impact on your brand, by sharing negative experiences with others, and are likely to switch from your brand.
To calculate the Net Promoter Score (NPS) for a brand, the percentage of Detractors is simply subtracted from the percentage of Promoters. This can be a score ranging anywhere from as low as -100 if all customers are Detractors, to as high as 100 if all customers are Promoters.
tNPS + bNPS
Net Promoter Score (NPS) can be used in different ways and measured at different stages in the customer lifecycle. This typically breaks down into two distinct forms. Firstly, NPS can be measured following specific interactions customers have with your brand. This is known as transactional NPS (tNPS).
The other form of NPS is not driven by a specific event, but looks more broadly at customer relationships with your brand, often referred to as relationship or brand NPS (bNPS).
These two forms of NPS can support with identifying tactical and strategic business improvement initiatives. tNPS. Combining the measures across research programmes can be used to evidence the impact individual transactions have on overall brand perceptions, whilst allowing you to understand the wider factors that contribute to overall brand perceptions and drive customer advocacy.