What is Net Promoter Score?

The calculation of the NPS involves asking customers: “How likely are you to recommend our company/product to a friend or colleague?”. Customers rate their answers on a 0 to 10 scale, with 0 being “not at all likely” and 10 being “extremely likely”. Based on their answer, they are then categorized into three groups: Promoters, Passives, and Detractors.

Promoters are those who answer with a 9 or 10, indicating they are extremely likely to recommend the brand. They are usually loyal customers who will repeat their purchases.

Passives are those who answer with a 7 or 8, indicating they are satisfied with the brand but not enthusiastic enough to recommend it or return for a repeat purchase.

Detractors are those who answer with a score of 0 to 6, indicating they are unlikely to recommend the brand. They are customers who usually have negative feelings about the brand, product, or service and they share their negative experiences with other peers.

To calculate the NPS, you subtract the percentage of Detractors from the percentage of Promoters. The resulting score ranges from -100 to +100, with a higher score indicating a more satisfied and loyal customer base.

Your likelihood of organic growth also increases with your score. Anything above 0 on the NPS scale is seen as positive, with scores over 50 being considered a good NPS.

However, an NPS below 0 can indicate that your client base contains more detractors than supporters. If you find yourself in this situation, your priority should be to raise customer satisfaction levels.

Different campaigns work best for each group.

• Promoters can be leveraged for positive word-of-mouth marketing, such as referrals or social media endorsements.
• Passives can be targeted with retention campaigns and promotions to turn them into Promoters.
• Detractors, on the other hand, should be addressed immediately through customer service efforts to resolve their issues and prevent negative reviews.

The importance of NPS in eCommerce and online marketing lies in its ability to measure customer satisfaction and loyalty over time. By regularly measuring and analyzing NPS, companies can forecast business growth, identify trends, and improve their products and services.

Following up on a sale is just as important as promoting your items and getting new customers to buy them. Hence, your company's profitability is heavily influenced by customer experience management. Happier customers result in a lower churn rate and new leads for the company through peer-to-peer recommendations, which in return will mean higher revenue and lower costs. Happy customers are more inclined to spread the word about your business, promote it and create growth opportunities.

NPS also provides a benchmark for comparison against competitors and helps to identify areas for growth and development.