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How to analyze your NPS results

Last updated

4 July 2024

Author

Dovetail Editorial Team

Reviewed by

Hugh Good

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The net promoter score (NPS) provides valuable insights into how users engage with your brand or products.

When you use it consistently over time, NPS output analysis can make a significant difference in determining exactly what your audience wants. It can also show you how to adjust your products and services.

Businesses with an NPS that’s double that of their competitors are “sustained value creators” and “will achieve long-term profitable growth.”

Calculating the NPS is relatively easy, which is surprising considering the weight it carries. However, analyzing NPS results and putting them to good use requires a bit more work and planning.

What is the net promoter score?

The NPS is the keystone metric of the “Net Promoter System,” a market research program developed by a career business strategist Fred Reichheld, of Bain & Company. He was credited with popularizing the importance of customer loyalty.

The equation behind the NPS is surprisingly simple and effective, prompting organizations of all kinds to leverage it in countless creative ways to enhance their value.

The NPS is a score out of 100 that can represent the following:

  • An evaluation of specific products, services, or transactions

  • Your company’s overall reputation (this can also apply to whole industries)

An NPS measures these factors using a simple survey to reveal several important insights:

  • Customer satisfaction

  • Customer loyalty

  • How likely a customer is to recommend your product or service to others

The NPS primarily measures the likelihood of a recommendation, but it indirectly reflects customer satisfaction and loyalty, too. Customers who are satisfied and loyal are more likely to give high scores, indicating a high likelihood of recommending the product or service.

Customers give their ratings on a scale of 0–10. The creators of the NPS chose this range to ensure the system is easy for respondents to understand. It also encourages customers to make a greater distinction between true enthusiasm and mere satisfaction.

In comparison, a 5-star rating may indicate a customer is over the moon—but it could also mean their experience was simply “good enough” and free from problems.

We’ll break down the scoring system in the next sections. For now, know that high, medium, and low scores delineate customers into the following camps:

  • High: customers who are most likely to promote your company

  • Medium: customers who are on the fence, who are not really enthusiastic but have no serious complaints

  • Low: dissatisfied customers who would not recommend your company and actively detract from your reputation

What is NPS analysis?

Your NPS can immediately reveal how your audience is experiencing your brand, product, or service. However, you’ll need to track your NPS over time and analyze the outputs to extract as much value from it as possible.

NPS analysis can reveal numerous actionable insights for adding value to your brand. Here are some examples:

  • Diagnosing the state of the customer–brand relationship

  • Identifying how to reduce negative sentiment

  • Determining how to earn higher customer trust

  • Showing you how to fine-tune your user persona(s)

  • Identifying product features to prioritize

  • Targeting your project development tasks more effectively

  • Optimizing your user experience (UX)

How to calculate your net promoter score

Here are the steps to calculating your NPS score:

Begin with the right tools

Before you can conduct reliable NPS analysis, you need to be sure your NPS score is based on robust customer data. Data collection and analysis become much faster and easier with a streamlined and polished survey automation platform, complete with:

  • A user-friendly interface backed by developer-grade multi-functionality

  • Automated response tagging

  • Robust multi-platform integration

  • Data visualization models, including dynamic tables and integrated formulas

These platforms provide many other helpful features, such as live survey collection methods, automatic speech-to-text, and text analytics.

You don’t need all these features to calculate your NPS, but integrating the results with your overall market and customer research will help you extract the fullest value from it.

Getting started: the NPS survey

Calculating your NPS begins with a simple closed-ended survey question. However, you might decide to use more than one. Customers will provide a rating of 0–10 for any or all of the following:

  • A given product or service

  • Your company as a whole

  • Each brand or business your company owns

  • Individual outlets (such as franchise brick-and-mortar stores)

  • One-time transactions or employee performance

  • Employee satisfaction

In its simplest form, the NPS only requires a rating for one inquiry. It’s dubbed “the ultimate question:”

“How likely are you to recommend us to a friend or colleague?”

Many have expanded on the NPS survey to include slightly more nuance. A common three-part modification involves asking:

  1. “How satisfied are you with [the product/service/company]?”

  2. “How likely are you to use our [product/service/company] again?”

  3. “How likely are you to recommend our [product/service/company] to friends or colleagues?”

You’ll then receive a long list of responses with a single number for each question. From here, you could piggyback any number of other survey techniques onto the NPS survey. For example, some NPS surveys also ask “driver questions,” prompting respondents to clarify what they liked, disliked, and more.

Keep the NPS survey as simple as possible if you are concerned about your response rate. Generally, the easier it is for customers to complete, the higher your response rates will be.

Here are some ways to improve your NPS response rate:

  • Include NPS surveys with customer outreach efforts.

  • Request a 0–10 rating after each transaction or support service.

  • Keep the survey and request short.

  • Incentivize respondents to complete the survey.

  • Send tactful reminders.

  • Personalize the request, showing customers you take their interests to heart.

You also want to ensure non-customers can’t flood the survey system with illegitimate responses. With any survey collection method, consider how to restrict answers to one response per customer.

The scoring system

After collecting your survey data, the NPS calculation is very easy. First, you place each response into one of three categories:

  • Promoters (9 or above): these are your most loyal and enthusiastic customers. A promoter is much more likely to be a repeat customer and recommend your product, service, or company as a whole to their family, friends, and coworkers. Promoters account for over 80% of most business referrals.

  • Passives (8 or 7): these customers are generally satisfied, but that could easily change. While they may make another purchase in the future and provide lukewarm referrals (but at about half the rate as promoters), passives are easily swayed by competitors.

  • Detractors (6 or less): depending on how low the score is, you can expect a certain share of negative feedback about your products, services, or company. Detractors give over 80% of a company’s negative word-of-mouth feedback. While some detractors will account for a certain amount of your revenue, they negatively impact your reputation (and growth as a result).

Calculating your NPS

Now, for the actual equation. Calculate the percentage of respondents who are promoters, and calculate the percentage who are detractors. Then, subtract the latter from the former.

NPS = total % of promoters – total % of detractors

So, if 80% of respondents are promoters and 15% are detractors, you end up with an NPS of 65.

The NPS is a crude but effective view of the effects your most and least loyal customers are having on your reputation. Passives are not involved in the equation.

Examples of the NPS in action

Not all NPS feedback is the same. There are three types of NPS:

  1. Customer experience: scores for specific interactions, which provide telling insights into how particular touchpoints affect your customers’ perceptions. To avoid overwhelming your customers, limit your NPS survey requests to only the most important transactions.

  2. Customer relationships: a customer relationship NPS reveals more of the general sentiment toward your brand. These scores are not for specific interactions. You might gather them once or twice per year.

  3. Competitive benchmarks: these are comparisons between you and your competitors’ ratings, showing how your market base views an overall value proposition, like a general type of product or service. They involve performing an NPS survey about your own competitors.

All three types of NPS offer key advantages. Competitive benchmarks reveal baseline scores common to your industry, while the other two reveal more detailed information specific to company or product performance.

Comparing each type of NPS feedback is the most effective way to gain insights into what and why your customers feel the way they do about your company. For instance, comparing customer experience data with customer relationship data can show whether your appeal is increasing.

What is a good net promoter score?

A higher NPS is better, but be careful not to judge your score without qualification and context.

For instance, different industries usually have very different competitive benchmarks. A low NPS for retail, for instance, may be quite high for a bank. Each market’s competitiveness in a given region can shift baseline scores even further. Numerous factors are involved.

You should also compare a specific experience-based NPS with relationship-based data. This shows how well you’re performing in the context of audience expectations. Most importantly, use your NPS dynamically as a tool for continuous improvement.

In simple terms, there are several important considerations to make before judging how good or bad you think your NPS is:

  • Competitive benchmarks common to your industry, location, and offerings

  • How your relationship NPS compares with that of your competitors

  • The trajectory your experience NPS is taking over time

Is 70% a good net promoter score?

An NPS of 70 is very good in almost all cases. However, context is key. If your competitors all have scores of 80 or more, you’d be behind the pack. Similarly, if your NPS was higher than 70 the year before, a score of 70 may indicate you’ve run into problems.

That being said, generally, the following ratings could be linked to the following scores:

  • Excellent: 70+

  • Great: 50–70

  • Good: 20–50

  • Fair: 1–20 (remember that even 1% means more people are putting out the good word than not)

  • Needs improvement: a negative score, as your detractors outweigh your supporters

Take these figures with a pinch of salt. What the NPS reveals under thorough analysis matters more than any one score.

Pre-analysis: tagging and categorizing your data

Some NPS analysis techniques compare an NPS with several other data points, including other multiple-choice questions and/or open-ended response fields.

For deeper insights and more flexible analysis, compile and track the following:

  • Net promoter score

  • NPS driver questions (qualify a given score)

  • Verbatim comments (if you also collected open-ended comments)

The latter is very difficult (or impossible, at scale) without a dedicated survey analysis platform to automate the analysis process. An automated text analytics platform can also take care of the most time-consuming data-management functions, facilitating faster searches.

The most streamlined platforms also feature easy integration with other business tools, making your NPS analysis more usable in future campaigns.

How to analyze sentiment in NPS

There are numerous NPS analysis methods out there. NPS is just one particular way of measuring customer satisfaction.

Here are some analysis methods that show how simple and far-reaching NPS insights can be:

1. Plot a trend

The simplest NPS analysis method is to conduct the same survey across multiple time series and see if you have improved. Do this consistently to chart your progress.

2. Contextualize your NPS

You’ll need something to compare a given NPS with. Consider which of the three forms of NPS you have (experience, relationship, or benchmark). Then, compare and contrast the different types of scores.

3. Segment your survey responses

You could decide to segment the responses and calculate the NPS of each. For example, you could base segmentation on a customer’s subscription level, total lifetime value, and other metrics.

This is helpful for learning your promoters’ and detractors’ defining qualities—or, in the reverse, how many promoters, passives, and detractors are in a given segment.

4. NPS driver analysis

If you asked qualifying driver questions, you can gauge which drivers/conditions contributed to high or low scores most reliably.

For example, if a detractor selected three answers to a driver question—essentially, their reasons for giving the NPS they did—you’d attribute 33% weight to each. If another detractor gives two driver answers, each carries 50% weight.

Do this for each respondent and tally the results. This shows which factors are driving customer satisfaction rates most consistently.

5. NPS verbatim analysis

Using text analytics, it’s possible (and surprisingly easy!) to automatically determine which words or phrases show up among promoters, passives, and detractors most consistently. This can fulfill the same functions as a driver analysis but in a more open-ended way.

If your promoters frequently comment on a specific feature, for example, you know what your development team should prioritize. Are your detractors constantly complaining about poor customer support? Now you know which department needs extra training or resources.

6. NPS root cause analysis

This method involves setting up an interview. The session begins by asking participants about the highest-ranking driver answers. You’ll then have a chance to learn more about what the customers thought about certain hot-button issues.

Getting to the root cause requires going several layers deep. That’s why Toyota developed their “5 whys” technique. They claim it takes about five separate inquiries framed around “why” questions to get to a problem’s root cause.

How to leverage your NPS analysis insights

The ultimate goal of NPS analysis is to learn how to improve your products or services based on customer sentiment. Think of it as a continuous improvement model, but you’ve set a permanent place at the table for your customer.

Once you have your NPS analysis in hand, brainstorm with your team about how you can best leverage the results. The following are a few ideas to get you started:

  • Identify strengths and weaknesses.

  • Focus on customer engagement (especially based on the most common drivers).

  • Conduct more thorough feedback sentiment analysis (you might use the root cause analysis method).

  • Run open-ended feedback through automated text analysis to identify keywords.

  • Monitor customer satisfaction at each point in the customer journey.

  • Identify which engagement metrics define your customers.

  • Take feedback analysis seriously and act on it.

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