NPS Surveys: A Guide to Launching a Net Promoter Score Survey

Introduction to Net Promoter Score (NPS) Surveys 

Imagine a friend asks you, "Would you recommend this coffee shop?" Your answer to them can offer insight into your level of loyalty and satisfaction to that business — just like a Net Promoter Score (NPS) survey can do for businesses.

NPS surveys have become mainstream tools in market research, helping companies understand a customer’s likelihood to recommend them to others on a deeper level. By capturing feedback on how likely customers are to recommend a product or service, businesses can turn these insights into strategies for growth.

In this article, we’ll dive into everything you need to know about NPS surveys, from their purpose to how you can leverage them to make informed decisions.

What is Net Promoter Score? 

Net Promoter Score (NPS) is a simple yet powerful metric that measures how likely consumers are to be advocates for your brand. It’s calculated based on one straightforward question: "How likely are you to recommend our company/product to a friend or colleague?" Respondents answer using a 0 to 10 scale, with their responses categorizing them into three groups: Promoters, Passives, and Detractors.

NPS has become a pervasive metric across industries due to its simplicity and effectiveness. It provides a clear, actionable indicator of customer sentiment. Whether you're a small business or a large enterprise, tracking your Net Promoter Score can offer valuable insights into how your customers perceive your brand.

Proponents of NPS state that its significance lies in its ability to not only measure satisfaction but also predict future growth. A high NPS typically indicates a strong base of loyal customers who are likely to recommend your products or services, driving organic growth. On the other hand, a low NPS can signal underlying issues that need immediate attention.

Conducting an NPS Survey 

Conducting an NPS survey is the first step toward understanding customer loyalty and satisfaction. At its core, an NPS survey is a mechanism for gathering direct feedback from your audience.

Typically, these surveys are conducted with customers to measure their likelihood of recommending your company or products. However, the concept extends beyond customers—businesses also use NPS surveys internally, known as eNPS, to gauge employee satisfaction, loyalty, and advocacy.

An effective NPS survey is straightforward, which is part of its appeal.

The simplicity of the survey encourages higher response rates, making it easier to gather a large amount of valuable data quickly. Despite its simplicity, the insights gained from an NPS survey can be profound, guiding strategic decisions across various areas of the business.

When it comes to collecting NPS feedback, using a reliable survey platform is crucial. Sawtooth Software’s online survey platforms are designed to handle the intricacies of NPS surveys, offering features that streamline the process of creating, distributing, and analyzing your surveys.

Whether you're looking to measure customer sentiment or employee engagement, Sawtooth Software provides the tools you need to make your NPS survey efforts successful.

Net Promoter Score Survey Structure and NPS Questions 

The beauty of an NPS survey lies in its simplicity. Unlike other types of surveys that might require a range of detailed questions, an NPS survey is designed to be quick and easy to answer. This efficiency is one of the reasons why NPS surveys often see high response rates.

Question 1

A standard NPS survey revolves around two key questions. The first question is quantitative:

"On a scale of 0 to 10, how likely are you to recommend our company/product to a friend or colleague?"

This question uses an 11-point NPS scale to measure the respondent's likelihood to recommend, offering a clear and immediate snapshot of customer sentiment.

Question 2

The second question is open-ended, giving respondents the chance to explain their rating. This qualitative follow-up might ask:

"What is the primary reason for your score?" or "How can we improve your experience?"

These responses provide the context behind the numbers, offering deeper insights into what drives customer loyalty or dissatisfaction.

While it’s possible to add more questions to your NPS survey, the core focus should remain on these two. The combination of quantitative and qualitative data creates a comprehensive picture of customer sentiment, making NPS surveys both efficient and impactful.

 Keeping the survey concise ensures that you respect your respondents’ time while still gathering the critical insights needed to calculate your NPS.

Calculating Your Net Promoter Score 

NPS Scale: Promoters, Detractors, and Passives 

Understanding the NPS scale is essential for interpreting the results of your survey. The NPS scale categorizes respondents into three distinct groups—Promoters, Passives, and Detractors—each representing a different level of customer satisfaction and loyalty.

1. Promoters (9-10): These are your brand advocates, the customers who are most likely to recommend your product or service to others. Promoters are highly satisfied with their experience and can drive positive word-of-mouth, helping to fuel organic growth. Their loyalty can also lead to higher customer lifetime value, as they are more likely to make repeat purchases and try new products.
2. Passives (7-8): Passives are somewhat satisfied but not enthusiastic. They might be content with your product or service, but they’re not inclined to sing your praises. This group is considered neutral, and while they aren’t actively promoting your brand, they’re also not likely to detract from it. However, since they lack strong loyalty, they are vulnerable to competitor offerings and could switch if something better comes along.
3. Detractors (0-6): Detractors are unhappy customers who are likely to speak negatively about your brand. They can harm your reputation through negative reviews and word-of-mouth, which can have a significant impact on your business. Identifying and addressing the concerns of Detractors is crucial for improving your overall NPS and preventing customer churn.

The distribution of these three groups in your NPS survey results directly influences your final Net Promoter Score. By understanding where your customers fall on the NPS scale, you can better tailor your strategies to enhance customer satisfaction, convert Passives into Promoters, and address the issues raised by Detractors.

NPS Formula 

The Net Promoter Score (NPS) formula is a simple yet powerful tool that distills complex customer feedback into a single, actionable metric. The formula is designed to be straightforward, allowing businesses to quickly assess their customer loyalty and satisfaction levels.

The NPS formula is as follows:

[ {NPS} = %Promoters - %Detractors ]

Here’s how it works:

1. Calculate the percentage of Promoters: Count the number of respondents who scored 9 or 10 on the NPS question and divide it by the total number of responses. Multiply the result by 100 to get the percentage.
2. Calculate the percentage of Detractors: Similarly, count the number of respondents who scored between 0 and 6, divide it by the total number of responses, and multiply by 100 to find the percentage.
3. Subtract the percentage of Detractors from the percentage of Promoters: The result is your Net Promoter Score.

Let’s consider a hypothetical example. Suppose you surveyed 100 customers, and the results were as follows:

• 70 customers are Promoters (score 9-10)
• 20 customers are Passives (score 7-8)
• 10 customers are Detractors (score 0-6)

Using the NPS formula:

• Promoters: ( 0.70 * 100 = 70% )
• Detractors: ( 0.10 * 100 = 10% )

So, the NPS would be:

[ 70% - 10% = 60 ]

An NPS of 60 is considered a strong score, indicating that the majority of your customers are highly satisfied and likely to promote your brand.

Understanding the NPS formula and how to apply it allows you to gauge the overall sentiment of your customer base quickly. This insight can be instrumental in making data-driven decisions that improve customer experience and drive business growth.

Interpreting NPS Results 

What Is a Good Net Promoter Score? 

Interpreting your Net Promoter Score (NPS) is key to understanding how your customers perceive your brand. But what exactly constitutes a "good" NPS? The answer depends on several factors, including industry benchmarks, regional expectations, and the maturity of your business.

In general, an NPS can range from -100 to +100. Here’s a quick guide to help you interpret your score:

• Negative NPS (-100 to 0): A negative score indicates that you have more Detractors than Promoters, which is a red flag. This suggests significant issues with customer satisfaction and loyalty that need immediate attention.
• Neutral NPS (0 to 20): A score in this range shows a balance between Promoters and Detractors. While not necessarily bad, it suggests that your customers are indifferent and may be vulnerable to switching to competitors. Improving the customer experience should be a priority to convert Passives into Promoters.
• Good NPS (20 to 50): Scores in this range are considered positive and reflect a generally satisfied customer base. You have more Promoters than Detractors, which is a healthy sign, but there’s still room for improvement.
• Excellent NPS (50 to 70): An NPS in this range is a strong indicator of customer loyalty. Your customers are highly satisfied and likely to recommend your brand, leading to organic growth and positive word-of-mouth.
• World-Class NPS (70 to 100): Achieving a score in this range is rare and signifies an extremely loyal customer base. It indicates that your brand is well-loved, with minimal issues affecting customer satisfaction. Companies with world-class NPS typically see robust growth and have a strong competitive edge.

While these general guidelines provide a baseline, it's important to compare your NPS against industry-specific benchmarks. Different industries have different standards for what constitutes a "good" NPS. For example, a score of 30 might be excellent in one industry but below average in another. Regularly tracking and comparing your NPS with industry benchmarks can help you set realistic goals and measure your progress effectively.

What To Do with Your NPS Score & How To Improve It 

Once you've calculated your Net Promoter Score (NPS) and interpreted the results, the next step is to leverage this data to drive improvements. Your NPS is more than just a number; it’s a powerful tool that can guide strategic decisions to enhance customer satisfaction and loyalty.

1. Understand the Why Behind Your Score 

The open-ended feedback from Detractors, Passives, and Promoters is invaluable. By analyzing these responses, you can identify common themes or issues that are influencing your score. For example, if Detractors frequently mention poor customer service, this is a clear area where improvements are needed. Similarly, understanding what Promoters love about your brand can help you reinforce those strengths.

2. Address Detractors First 

Detractors pose the biggest risk to your brand’s reputation. Prioritize addressing their concerns by resolving specific issues they’ve raised. This might involve improving product quality, enhancing customer service, or making the user experience more seamless. Turning Detractors into Passives or even Promoters can significantly boost your overall NPS.

3. Engage with Passives 

While Passives are not actively dissatisfied, they’re also not enthusiastic about your brand. Engage with this group to understand what’s holding them back from becoming Promoters. It could be that they need more value from your product, or they’re seeking additional features. Tailoring your offerings to meet these needs can help convert Passives into loyal customers.

4. Reward Your Promoters 

Promoters are your brand’s advocates, and it’s crucial to keep them engaged and appreciated. Consider implementing loyalty programs, offering exclusive discounts, or even just sending a thank-you note to reinforce their positive experience. By nurturing these relationships, you can encourage even more positive word-of-mouth and ensure that your Promoters remain loyal.

5. Continuous Improvement 

Improving your NPS isn’t a one-time effort; it requires continuous monitoring and action. Regularly run NPS surveys to track your progress over time. Use the insights gained to make data-driven decisions that enhance your products, services, and customer experience.

By actively working to improve your NPS, you can strengthen customer loyalty, reduce churn, and ultimately drive business growth. The feedback loop created by NPS surveys ensures that your business stays aligned with customer needs and expectations, helping you build a more resilient and customer-focused brand.

NPS vs. CSAT vs. CES 

In the world of customer feedback, Net Promoter Score (NPS), Customer Satisfaction Score (CSAT), and Customer Effort Score (CES) are three of the most commonly used metrics. While they all aim to measure customer experience, each serves a distinct purpose and provides unique insights.

Net Promoter Score (NPS) 

NPS measures customer advocacy by asking how likely customers are to recommend your product or service. It’s a broad metric that captures the overall sentiment toward your brand. NPS is particularly useful for understanding long-term customer loyalty and predicting future business growth. It provides a holistic view of customer satisfaction but doesn't pinpoint specific areas for improvement.

Customer Satisfaction Score (CSAT) 

CSAT, on the other hand, is a more focused metric that measures immediate customer satisfaction with a specific interaction, product, or service. Customers are typically asked to rate their satisfaction on a scale, often ranging from 1 to 5. CSAT is ideal for assessing short-term satisfaction and identifying specific touchpoints that may need improvement. For example, after a customer service interaction, a CSAT survey might ask, "How satisfied were you with the support you received?"

Customer Effort Score (CES) 

CES measures the ease of a customer's experience with your brand, typically asking, "How easy was it to resolve your issue?" The idea behind CES is that the easier it is for customers to interact with your brand, the more likely they are to remain loyal. CES is especially useful in service-oriented industries where reducing customer effort can significantly impact satisfaction and retention.

Create NPS Surveys with Sawtooth Software 

Creating effective NPS surveys is crucial for gathering actionable customer feedback, and Sawtooth Software offers the tools you need to do just that. Our platform simplifies the process of designing, distributing, and analyzing surveys, allowing you to focus on gaining insights that drive business growth.

With a user-friendly interface, you can easily tailor your surveys to reflect your brand’s unique style. Once your surveys are live, our powerful analytics tools help you quickly interpret results, and uncover key insights from customer feedback.

Whether you're new to NPS surveys or looking to refine your approach, Sawtooth Software equips you with everything you need to succeed. Start collecting meaningful feedback today and turn those insights into actionable strategies.

Ready to get started? Discover how Sawtooth Software can elevate your market research.