NPS Score
The NPS score, short for Net Promoter Score, is a metric that measures the willingness of customers to recommend a product, service or company to others.
It is based on the question: “On a scale of 0 to 10, how likely is it that you would recommend our company to a friend or colleague?” The answers to this question enable companies to classify customers into promoters, passives and detractors.
The NPS score is considered a strong indicator of customer loyalty because it directly measures a customer’s propensity to recommend a company. Research shows that a high willingness to recommend is closely linked to repeat purchases, higher sales and positive customer feedback.
Meaning of the NPS score
The NPS score is crucial for companies for several reasons:
- Customer feedback: It provides direct feedback from customers that shows how well a company is meeting their expectations.
- Early warning system: A low or falling NPS can serve as an early warning sign of problems in customer service or product quality.
- Competitive advantage: A high NPS indicates strong customer loyalty and can set a company apart from its competitors.
Interpretation of the NPS score: promoters, passives and detractors
The NPS score classifies customers into three categories:
- Promoters (9-10): Convinced customers who are likely to buy again and recommend the company to others.
- Passive (7-8): Satisfied but not enthusiastic customers who are more susceptible to offers from competitors.
- Detractors (0-6): Dissatisfied customers who have the potential to damage the company’s reputation.
Industry comparisons and benchmarks
NPS can vary widely across industries, so companies should compare their scores to relevant industry benchmarks to understand their true value.
| Branch | Average NPS |
| Banking | 35 |
| Retail trade | 62 |
| Telecommunications | 24 |
| Healthcare | 52 |
These benchmarks show that a good NPS score is relative and depends on the industry in question.
Calculation of the NPS score
The calculation of the NPS score follows a simple principle:
- Determining the categories: Customers are divided into promoters (9-10), passives (7-8) and detractors (0-6) based on their response.
- Calculation formula: The NPS is calculated by subtracting the percentage of detractors from the percentage of promoters. Liabilities are not included in the calculation as they are considered neutral.
[NPS Promotoren – % Detraktoren]
Example calculation of an NPS score
Suppose a company receives the following customer feedback:
- Promoters: 70
- Passive: 20
- Detractors: 10
Then the NPS would be:
- % promoters = (70 / (70 + 20 + 10)) * 100 = 70%
- % Detractors = (10 / (70 + 20 + 10)) * 100 = 10%
- NPS = 70% – 10% = 60
Common errors and misunderstandings in the calculation
Errors and misunderstandings can occur when calculating and interpreting the NPS score:
- Overlooking passives: Although passives are not directly included in the calculation, they provide valuable insights into the potential for improving customer satisfaction.
- Comparison across different industries: A direct comparison of the NPS between companies in different industries can be misleading.
- Overestimation of the absolute value: The context, such as industry benchmark and customer demographics, is decisive for the interpretation of the NPS.
Advantages of the NPS Score
The NPS score offers numerous advantages for companies that want to optimize their customer management:
- Simplicity and comprehensibility: The NPS is easy to understand and communicate, making it a practical tool for the entire company.
- Action-oriented insights: It provides clear indications of where improvements are needed to increase customer satisfaction.
- Customer loyalty and growth: High NPS scores often correlate with stronger customer loyalty and word of mouth, which promotes growth.
NPS score as a performance measurement tool
The NPS not only serves as a measure of customer satisfaction, but also as a powerful tool for evaluating internal processes and teams. Companies use the NPS to compare the performance of different departments and identify areas that need special attention.
NPS score compared to other customer satisfaction metrics
Compared to other metrics such as Customer Satisfaction (CSAT) or Customer Effort Score (CES), the NPS provides a more comprehensive picture of customer loyalty and willingness to recommend. While CSAT and CES focus on specific interactions or transactions, NPS measures the general relationship between customers and companies.
- Comparison table:
| Metrics | Focus | Advantage |
| NPS | Long-term customer loyalty | Measures willingness to recommend |
| CSAT | Short-term satisfaction | Measures satisfaction with an experience |
| CES | Cost of customer interaction | Identifies barriers in the interaction |
Application of the NPS score
The NPS score is used in various areas of the company to strengthen customer relationships and promote growth:
- Customer service: Identify opportunities for improvement by analyzing feedback from detractors and passives.
- Product development: Using customer feedback to prioritize product features and improvements.
- Marketing: Use of promoters as brand ambassadors to increase word of mouth.
Integration of the NPS score into the corporate strategy
Successful integration of the NPS score into the corporate strategy requires:
- Regular survey: Continuous measurement of the NPS in order to track trends and react promptly to changes.
- Cross-departmental collaboration: Involvement of different teams (e.g. customer service, marketing, product development) to work together on improving the NPS.
- Action plans: Development of specific measures for promoters, passives and detractors to increase customer satisfaction and loyalty in a targeted manner.
Case studies and best practices
Successful companies use the NPS score to achieve impressive results:
- Company A has increased its NPS by 20 points within one year through targeted improvements in customer service.
- Company B uses promoter feedback to create successful marketing campaigns that support customer acquisition.
These examples show how the NPS score can be used in a targeted manner to improve customer satisfaction and promote company growth.
Conclusion
The NPS score is a key metric for measuring customer loyalty and willingness to recommend. Its simplicity and informative value make it a valuable tool for companies in all sectors. By classifying customers into promoters, passives and detractors, the NPS score provides action-oriented insights that can be used to improve products, services and customer experiences. Regularly measuring and analyzing the NPS enables companies to evaluate their performance, adapt their strategies and ultimately strengthen their customer relationships.
Outlook for the future of the NPS score
In an ever-changing business world, the NPS score remains relevant by proving to be a robust indicator of customer loyalty and business growth. Advancing digitalization and the increasing importance of customer experience offer new opportunities for the application and further development of the NPS score. Companies that integrate NPS into their data-driven decision-making processes can improve their competitiveness and build lasting customer relationships.
