Understanding Net Promoter Score (NPS)

Net Promoter Score (NPS) is an often used metric for analyzing brand favorability and brand loyalty. The high level concepts of NPS are simple enough, but understanding how to measure and analyze NPS scores is another matter entirely. As with any brand metric, NPS should not be considered in a vacuum. Higher net promoter scores are a sign of brand synergy. Low net promoter scores may be a sign of any number of problems in the branding process.

With all of this in mind, today we will be defining net promoter score (NPS), reviewing how to calculate NPS, when and how NPS can be used, and finally how to turn NPS results into positive brand action.

What is a Net Promoter Score?

According to netpromoter.com: “Net Promoter Score, or NPS, measures customer experience and predicts business growth. This proven metric transformed the business world and now provides the core measurement for customer experience management programs the world round.” This gives us an idea of the usefulness of the metric, but what exactly is a net promoter score?

Simply put, NPS measures the likelihood that a customer is likely to recommend your product, service, or overall brand to a friend, colleague, or loved one. There are three general categories of respondents:

1. Loyal brand advocates (promoters): customers who are very likely to recommend your brand.
2. Satisfied customers (passives): customers who will likely continue with your brand, but are open to switching brands. These individuals are unlikely to advocate for your brand.
3. Dissatisfied customers (detractors): customers who will actively speak badly about your brand, products, or services to those who will listen.

How to Calculate NPS

Calculating NPS can range from extremely simple to relatively complex. In the simplest terms, calculating NPS can be accomplished by asking a single question: “On a scale of 0-10, how likely is it that you would recommend [brand name] to your friends, family or business associates?” This format allows respondents to give an answer on a sliding scale. Going back to our three categories of respondents, we can use numerical values to assign each respondent to a category:

1. Respondents answering 9 to 10 are considered promoters. Customers who answer the above question with a 9 or a 10 are likely to be both extremely satisfied with your brand and willing to “promote” your brand to anyone who will listen.
2. Respondents answering 7 to 8 are considered passives. This range is generally content with your brand without being too upset or excited one way or another.
3. Respondents answering 6 or below are considered detractors. Obviously, there is a big difference between an answer of 1 and an answer of 6, but these respondents are both extremely unlikely to recommend your products.

To finish the NPS calculation, subtract the total percentage of detractors from the total percentage of promoters. This gives your overall net promoter score. You might notice that passives do not factor into this calculation. That is an intentional choice to remove those who are unlikely to either promote or badmouth your brand.

An Example NPS Calculation

Let’s explore a quick example to understand NPS calculations. In this example, we have the following data:

• 40% of respondents answered 9-10 (promoters)
• 35% of respondents answered 7-8 (passives)
• 25% of respondents answered 6 or below (detractors)

We would take the percentage of promoters (40) and subtract the number of detractors (25), giving us a net promoter score of 15. Note that it is possible to have a negative net promoter score.

How to turn Utilize Net Promoter Scores into Brand Action

All of the brand data in the world won’t help your brand without turning that data into a plan of action. So how can we use NPS to improve a brand? That depends heavily on the nature of the survey and the results of that survey, but there are several key considerations which hold true.

Many NPS questionnaires include either a free form “why did you give that score?” question or additional questions to gain context. Remember that any brand weakness can also be viewed as an opportunity for improvement. If patterns start to emerge with your detractors, that can turn into an opportunity to strengthen your brand.

It is also a great idea to break down respondents into key demographics to understand which groups are promoters, passives, and detractors. Your overall NPS might be 50 but your NPS with women aged 18-35 might be -10. Understanding these variables helps brands get a full picture. Getting a full picture of brand loyalty is the first step towards making positive brand changes.

Brand Metric Analysis from Clock Tower Insight

At Clock Tower Insight, we turn data into business solutions. By maximizing brand positioning, CX management, moments of influence, and more, we help build our clients brands in the short and long term. Clock Tower Insight believes that happy customers equal a happy business. We work closely with clients to tailor their brand from top to bottom in order to maximize positive image, exposure, and sales. 

To learn more about how we may be able to help your business grow, read about our 15 plus years of focused experience working with brands such as Starbucks, Kraft, McDonald’s, and much more.