{"id":94337,"date":"2023-02-28T22:53:07","date_gmt":"2023-02-28T20:53:07","guid":{"rendered":"https:\/\/factorialhr.com\/blog\/?p=94337"},"modified":"2023-03-01T18:27:09","modified_gmt":"2023-03-01T16:27:09","slug":"nps","status":"publish","type":"post","link":"https:\/\/factorialhr.com\/blog\/nps\/","title":{"rendered":"NPS: how and why you should calculate it"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Customer reviews and recommendations have never been so important. In fact, according to BrightLocal\u2019s 2023 consumer survey, <\/span><a href=\"https:\/\/www.brightlocal.com\/research\/local-consumer-review-survey\/?SSAID=314743&amp;SSCID=21k7_10qtgp\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">84% of people trust online reviews as much as personal recommendations<\/span><\/a><span style=\"font-weight: 400;\">. That means that <\/span><b>it only takes a couple of bad customer experiences to potentially damage your brand reputation<\/b><span style=\"font-weight: 400;\">. And that\u2019s why it\u2019s so important to <\/span><b>keep track of customer satisfaction by regularly using tools like the Net Promoter Score (NPS)<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">But <\/span><b>what is NPS?<\/b><span style=\"font-weight: 400;\"> How can you use it to <\/span><b>measure customer satisfaction and loyalty<\/b><span style=\"font-weight: 400;\">? And <\/span><b>what is a good NPS?<\/b><\/p>\n<p><span style=\"font-weight: 400;\">These are just a few of the questions that we\u2019ll be answering in today\u2019s post.<\/span><\/p>\n<p><a href=\"https:\/\/factorialhr.com\/get-started\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" class=\"aligncenter wp-image-89831 \" src=\"https:\/\/factorialhr.com\/wp-content\/uploads\/2023\/01\/05151547\/FREE-TRIAL-2023-300x103.jpg\" alt=\"Free trial\" width=\"746\" height=\"256\" srcset=\"https:\/\/factorialhr.com\/wp-content\/uploads\/2023\/01\/05151547\/FREE-TRIAL-2023-300x103.jpg 300w, https:\/\/factorialhr.com\/wp-content\/uploads\/2023\/01\/05151547\/FREE-TRIAL-2023.jpg 675w\" sizes=\"(max-width: 746px) 100vw, 746px\" \/><\/a><\/p>\n<p><b><div class=\"js-toc toc\">\n<p class=\"js-toc-title toc__title\">Table of Contents<\/p>\n<nav id=\"fac_toc_nav\" class=\"js-toc-nav toc__nav\" aria-label=\"Table of Contents\"><ol class=\"toc__list toc__list--level-1\"><li class=\"toc-heading-level-2\"><a class=\"toc__link toc-link-heading-1\" href=\"https:\/\/factorialhr.com\/blog\/nps\/#what-is-nps\" title=\"What is NPS?\u00a0\" data-target-id=\"what-is-nps\">What is NPS?\u00a0<\/a><\/li><li class=\"toc-heading-level-2\"><a class=\"toc__link toc-link-heading-2\" href=\"https:\/\/factorialhr.com\/blog\/nps\/#how-to-calculate-it\" title=\"How to calculate it\u00a0\" data-target-id=\"how-to-calculate-it\">How to calculate it\u00a0<\/a><\/li><li class=\"toc-heading-level-2\"><a class=\"toc__link toc-link-heading-3\" href=\"https:\/\/factorialhr.com\/blog\/nps\/#what\u2019s-a-good-score\" title=\"What\u2019s a good score?\u00a0\" data-target-id=\"what\u2019s-a-good-score\">What\u2019s a good score?\u00a0<\/a><\/li><li class=\"toc-heading-level-2\"><a class=\"toc__link toc-link-heading-4\" href=\"https:\/\/factorialhr.com\/blog\/nps\/#what\u2019s-included-in-an-nps-survey\" title=\"What\u2019s included in an NPS survey?\u00a0\" data-target-id=\"what\u2019s-included-in-an-nps-survey\">What\u2019s included in an NPS survey?\u00a0<\/a><\/li><li class=\"toc-heading-level-2\"><a class=\"toc__link toc-link-heading-5\" href=\"https:\/\/factorialhr.com\/blog\/nps\/#why-is-nps-important\" title=\"Why is NPS important?\u00a0\" data-target-id=\"why-is-nps-important\">Why is NPS important?\u00a0<\/a><\/li><li class=\"toc-heading-level-2\"><a class=\"toc__link toc-link-heading-6\" href=\"https:\/\/factorialhr.com\/blog\/nps\/#nps-limitations\" title=\"NPS limitations\u00a0\" data-target-id=\"nps-limitations\">NPS limitations\u00a0<\/a><\/li><li class=\"toc-heading-level-2\"><a class=\"toc__link toc-link-heading-7\" href=\"https:\/\/factorialhr.com\/blog\/nps\/#enps-vs-nps\" title=\"eNPS vs NPS\u00a0\" data-target-id=\"enps-vs-nps\">eNPS vs NPS\u00a0<\/a><\/li><li class=\"toc-heading-level-2\"><a class=\"toc__link toc-link-heading-8\" href=\"https:\/\/factorialhr.com\/blog\/nps\/#real-life-examples\" title=\"Real-life examples\u00a0\" data-target-id=\"real-life-examples\">Real-life examples\u00a0<\/a><\/li><\/ol><\/nav><\/div><\/b><\/p>\n<h2><b>What is NPS?<\/b><span style=\"font-weight: 400;\">\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The value of tracking <\/span><b>customer satisfaction<\/b><span style=\"font-weight: 400;\"> is nothing new. However, in the past, <\/span><b>many companies relied on multiple-choice surveys to collect customer feedback<\/b><span style=\"font-weight: 400;\">. These surveys were <\/span><b>biased and restrictive<\/b><span style=\"font-weight: 400;\">. As a result, they usually only provided businesses with the feedback that they wanted to hear, not what they needed to hear.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The <\/span><b>Net Promoter Score <\/b><span style=\"font-weight: 400;\">format for collecting feedback has changed the game. Instead of asking customers to choose from a selection of <\/span><b>pre-defined answers<\/b><span style=\"font-weight: 400;\">, you simply<\/span><b> ask them what they think of you<\/b><span style=\"font-weight: 400;\">. This provides you with much more valuable <\/span><b>critical feedback<\/b><span style=\"font-weight: 400;\"> that you can use to <\/span><b>enhance your customer experience and build a stronger brand<\/b><span style=\"font-weight: 400;\">. Plus, because the NPS format is so <\/span><b>quick and easy for customers to complete<\/b><span style=\"font-weight: 400;\">, you can collect feedback from people who you may not have heard from in the past.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">So, what is NPS, exactly?<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The Net Promoter Score (NPS) was developed by <\/span><b>Fred Reichheld in 2003<\/b><span style=\"font-weight: 400;\"> after analyzing how traditional customer satisfaction survey questions correlate to consumer behavior. The <\/span><b>NPS survey<\/b><span style=\"font-weight: 400;\">, now used by brands all over the world, has been <\/span><b>specifically designed to measure customer satisfaction and loyalty<\/b><span style=\"font-weight: 400;\">. But instead of asking for feedback from a single interaction or purchase, you ask customers to score their <\/span><b>overall experience with your brand<\/b><span style=\"font-weight: 400;\">. This can be a great way to <\/span><b>understand what\u2019s important for your customers and how you can improve your customer journey<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">With an NPS survey, you ask your customers one simple question:<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201c<\/span><i><span style=\"font-weight: 400;\">How likely are you to recommend our company to your friends and family on a scale of 0-10?<\/span><\/i><span style=\"font-weight: 400;\">\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You then use a simple formula to calculate how satisfied your overall customer base is, as we will see in the next section. Then you can <\/span><b>use the benchmark to measure, evaluate, and improve customer loyalty<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<h2><b>How to calculate it<\/b><span style=\"font-weight: 400;\">\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">As we just mentioned, the process for calculating your NPS is simple. You just need to share a survey with your customer consisting of one key question: \u201c<\/span><b>How likely are you to recommend our company to your friends and family on a scale of 0-10?<\/b><span style=\"font-weight: 400;\">\u201d. You can send this survey out by email, as a link via your chatbot, or simply post the survey on your website.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Each customer that completes the NPS survey will submit a single-digit score (between 0 and 10). You can then use each customer\u2019s score to segment them into one of three categories:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><b>Promoters<\/b><span style=\"font-weight: 400;\">: customers who give the company a score of 9 or 10.<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Passives<\/b><span style=\"font-weight: 400;\">: customers who give the company a score of 7 or 8<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Detractors<\/b><span style=\"font-weight: 400;\">: customers who give the company a score from 0 to 6.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The next step is calculating your <\/span><b>overall NPS as a business<\/b><span style=\"font-weight: 400;\">. You can use a free online <\/span><b>NPS calculator<\/b><span style=\"font-weight: 400;\"> for this. But the formula is very simple if you\u2019d rather do it yourself.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">First of all, it\u2019s important to remember that you <\/span><b>don\u2019t include passives in your calculation as these customers are classed as neutral<\/b><span style=\"font-weight: 400;\">: they don\u2019t have a strong positive or negative opinion about your business. Instead, you need to <\/span><b>focus on your promoters and your detractors to calculate your NPS<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This is the formula you need to use:<\/span><\/p>\n<p style=\"text-align: center;\"><b>Percentage of promoters (%) \u2013 Percentage of detractors (%) = NPS<\/b><\/p>\n<p><span style=\"font-weight: 400;\">This calculation will give you a score between -100 (all customers are detractors) and +100 (all customers are promoters).<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For example, let\u2019s say you have collected completed surveys from 100 customers. 80 of them are promoters (80%), 5 are passives (5%), and 15 are detractors (15%).\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Your <\/span><b>NPS calculation<\/b><span style=\"font-weight: 400;\"> would therefore be: <\/span><b>80 \u2013 15 = NPS of +65<\/b><\/p>\n<h2><b>What\u2019s a good score?<\/b><span style=\"font-weight: 400;\">\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">We\u2019ve seen what it is and how you calculate it, but what is a good NPS?<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The first step in evaluating your score is understanding what the three Net Promoter Score categories mean:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><b>Promoters:<\/b><span style=\"font-weight: 400;\"> loyal customers who are most likely to recommend your company to others. They go out of their way to follow your brand and they serve as positive brand ambassadors. For example, \u201c<\/span><i><span style=\"font-weight: 400;\">I love your products\/services!<\/span><\/i><span style=\"font-weight: 400;\">\u201d.<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Passives:<\/b><span style=\"font-weight: 400;\"> neutral customers who are neither particularly happy nor unhappy with your company; they don\u2019t have a strong opinion either way. They are open to other brands and are unlikely to publicly endorse you to their friends or family. For example, \u201c<\/span><i><span style=\"font-weight: 400;\">They\u2019re ok. I had a few issues, but I got what I paid for.<\/span><\/i><span style=\"font-weight: 400;\">\u201d<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Detractors:<\/b><span style=\"font-weight: 400;\"> unhappy and unsatisfied customers that are very likely to move on to your competitors. They have a negative opinion of your brand, and they are more likely to discourage their friends and family from becoming one of your customers. For example, \u201c<\/span><i><span style=\"font-weight: 400;\">The wrong item was delivered, and customer service refused to help!<\/span><\/i><span style=\"font-weight: 400;\">\u201d.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Essentially, <\/span><b>promoters are more likely to become loyal customers<\/b><span style=\"font-weight: 400;\"> whereas <\/span><b>detractors are more likely to churn or spread negative reviews<\/b><span style=\"font-weight: 400;\">. Passive customers can go either way. So, <\/span><b>the more promoters you identify, the better your score is<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, it\u2019s important to consider your industry, too. A good way to calculate how good your NPS score is, is to <\/span><b>compare it to your competitors and industry standards<\/b><span style=\"font-weight: 400;\">. For example, the average score for airlines is <\/span><b>35<\/b><span style=\"font-weight: 400;\">. This is much higher than internet service providers who score an average of <\/span><b>2<\/b><span style=\"font-weight: 400;\">. Context is everything.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Perhaps the best benchmark, though, is measuring against yourself. <\/span><b>If your score improves each time that you measure it, then you are headed in the right direction<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<h2><b>What\u2019s included in an NPS survey?<\/b><span style=\"font-weight: 400;\">\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">As we have already explained, <\/span><b>the primary objective of an NPS survey is to ask a simple question<\/b><span style=\"font-weight: 400;\">: \u201c<\/span><i><span style=\"font-weight: 400;\">How likely are you to recommend our company to your friends and family on a scale of 0-10?<\/span><\/i><span style=\"font-weight: 400;\">\u201d. Customers <\/span><b>respond with their rating which you then combine with all other scores in order to calculate your Net Promoter Score<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, <\/span><b>most NPS surveys also include a follow-up question<\/b><span style=\"font-weight: 400;\"> where customers can expand on their reasons. They can use this open-ended question to explain how they have decided on their score. And this is the most useful part for you in terms of <\/span><b>continuous improvement<\/b><span style=\"font-weight: 400;\">. You can use this part of the survey to <\/span><b>identify pain points in your customer journey and stages of your customer experience that you need to improve<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<h2><b>Why is NPS important?<\/b><span style=\"font-weight: 400;\">\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The main objective of the Net Promoter Score is to <\/span><b>measure how satisfied your customers are and how likely they are to promote your business to others<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Let\u2019s break this down and look at some of the <\/span><b>specific reasons<\/b><span style=\"font-weight: 400;\"> why regularly calculating your NPS is so <\/span><b>valuable for your business<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<h3><b>Insights into customer loyalty<\/b><span style=\"font-weight: 400;\">\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Your NPS can give you a lot of <\/span><b>valuable insights into customer loyalty<\/b><span style=\"font-weight: 400;\">, especially if you collect open-ended feedback too. You can find out what your customers think about your brand and your products or services. Essentially, <\/span><b>whether they have had a positive enough experience to recommend you to a friend<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This is important because <\/span><b>customer satisfaction is everything these days<\/b><span style=\"font-weight: 400;\">. With so many brands competing for the attention of buyers, <\/span><b>it only takes a few unsatisfied customers to damage your reputation<\/b><span style=\"font-weight: 400;\">. And once consumers start seeing you as an unsatisfactory brand, it is very difficult to change their minds.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The only way to continuously build a source of loyal customers is by making them happy. You need to provide your customers with a seamless purchase experience, meet their quality expectations, and go the extra mile with your customer service. <\/span><b>An NPS can help you determine whether you are on track and, if not, what you need to do in order to boost customer loyalty<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<h3><b>Identify customers at risk of churn<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Aside from helping you identify loyal customers, your NPS can also help you <\/span><b>identify customers who are at risk of churn<\/b><span style=\"font-weight: 400;\">. In other words, those who are likely to <\/span><b>leave your brand and reach out to your competitors the next time they make a purchase<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Continuously reducing customer churn is a very important sales strategy. This is because it is <\/span><b>much harder to get new customers than retain your existing ones<\/b><span style=\"font-weight: 400;\">. You get a <\/span><b>much higher ROI from repeat customers<\/b><span style=\"font-weight: 400;\"> as there is no acquisition cost and no marketing efforts required; loyal customers simply return to your brand because they had a good experience last time.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A Net Promoter Score helps you identify how many of your customers are at risk of churn (your <\/span><b>detractors<\/b><span style=\"font-weight: 400;\">). And if you collect follow-up feedback, you can also determine <\/span><b>the most common reasons for customers detracting from your brand<\/b><span style=\"font-weight: 400;\">. You can then <\/span><b>use this feedback to make improvements<\/b><span style=\"font-weight: 400;\"> in your business and hopefully <\/span><b>convert more detractors and passives into promoters<\/b><span style=\"font-weight: 400;\">. For example, if multiple detractors claim that customer service is an issue, then you can offer your CS team training to help them offer a higher standard of care.<\/span><\/p>\n<h3><b>Drive growth<\/b><span style=\"font-weight: 400;\">\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The goal of any business is to grow and evolve. This requires <\/span><b>making your customers happy and meeting their expectations in terms of quality and service<\/b><span style=\"font-weight: 400;\">. By regularly tracking your NPS and using the feedback you collect to make improvements, you can <\/span><b>continuously enhance your customer experience and drive business growth<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">With the right corrective initiatives, you can<\/span><b> address any identified pain points in the customer experience, retain more loyal customers, and build a solid and credible brand reputation<\/b><span style=\"font-weight: 400;\">. All this boosts your market position and helps you generate increased revenue from repeat purchases, referrals, and upsells.\u00a0<\/span><\/p>\n<p><b>Even negative feedback is an opportunity to grow<\/b><span style=\"font-weight: 400;\">, provided you make the right improvements to address identified issues. Do whatever you can to convert as many neutrals and detractors into promoters. <\/span><b>Promoters spend more money and are more willing to try new products. They also recommend you to more people, churn less, and have a much higher lifetime value<\/b><span style=\"font-weight: 400;\">. And this is crucial for long-term sustainable growth.<\/span><\/p>\n<h3><b>Competitor benchmarking<\/b><span style=\"font-weight: 400;\">\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Finally, the Net Promoter Score makes it <\/span><b>much easier to benchmark your level of customer satisfaction so that you can compare it to your competitors and industry standards<\/b><span style=\"font-weight: 400;\">. And this is crucial for brand positioning, especially if you operate in a crowded market.\u00a0<\/span><\/p>\n<p><b>NPS focuses on the bigger picture<\/b><span style=\"font-weight: 400;\">, not specific customer transactions. It provides you with a <\/span><b>snapshot of your reputation<\/b><span style=\"font-weight: 400;\"> that allows you to understand <\/span><b>how the market sees you<\/b><span style=\"font-weight: 400;\">. This is important because, all to often, organizations become inward looking. Instead of comparing their success to their competitors, they <\/span><b>benchmark against past performance<\/b><span style=\"font-weight: 400;\">. These internal benchmarks are obviously very important in business. But it\u2019s just as important to understand<\/span><b> whether your customers are as satisfied with you as they are with their competitors<\/b><span style=\"font-weight: 400;\">. Otherwise, it doesn\u2019t matter how positive their experience with you is; if someone else does it better then you will lose in the long term.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The best thing about the Net Promoter Score is that it is a <\/span><b>standard metric used by companies all around the world<\/b><span style=\"font-weight: 400;\">. This makes it very easy to determine which industry benchmarks you should be aiming for.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In terms of global standards, Survey Money claims that <\/span><a href=\"https:\/\/www.surveymonkey.co.uk\/curiosity\/what-is-a-good-net-promoter-score\/#:~:text=The%20lower%20quartile%20of%20organizations,NPS%20of%20%2B72%20or%20higher.\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">the median NPS is +44<\/span><\/a><span style=\"font-weight: 400;\">. In terms of industries, <\/span><b>the average NPS for professional services is +43<\/b><span style=\"font-weight: 400;\">, for example. Technology companies score slightly lower with +35. <\/span><b>Check your industry and competitor standards and measure your company\u2019s progress against them<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<h2><b>NPS limitations<\/b><span style=\"font-weight: 400;\">\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">There are a few limitations to the NPS. Very few things in this life are perfect, after all. Let\u2019s explore some of these <\/span><b>potential issues<\/b><span style=\"font-weight: 400;\"> and explain <\/span><b>how you can overcome them<\/b><span style=\"font-weight: 400;\">:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">It\u2019s a well-established fact that <\/span><b>customers are far more likely to report a bad experience than a good one<\/b><span style=\"font-weight: 400;\">. This means that fewer loyal customers might score you than dissatisfied customers. Keep this in mind when you send out your surveys. A good way to encourage more people to complete your survey is to <\/span><b>offer them an incentive<\/b><span style=\"font-weight: 400;\">. For example, you could offer customers a 5% discount on their next purchase if they complete your survey.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The Net Promoter Score itself <\/span><b>doesn\u2019t provide you with any actionable insights<\/b><span style=\"font-weight: 400;\">. It\u2019s just a numerical reflection of your reputation. The only way to gather the specific feedback you need to make improvements is to ask customers to justify their scores. That\u2019s why it\u2019s so important to <\/span><b>include an open-ended follow-up question in your surveys<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The NPS<\/span><b> focuses exclusively on your existing customers<\/b><span style=\"font-weight: 400;\">. It doesn\u2019t provide you with any feedback from your <\/span><b>ex-customers or prospective customers<\/b><span style=\"font-weight: 400;\">. And these two customer groups also represent opportunities for growth. Therefore, you should <\/span><b>include the NPS in a wider customer acquisition and retention strategy<\/b><span style=\"font-weight: 400;\">. That way, you won\u2019t just retain loyal customers, you\u2019ll also understand how you can attract new ones to your business too.\u00a0<\/span><\/li>\n<\/ul>\n<h2><b>eNPS vs NPS<\/b><span style=\"font-weight: 400;\">\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The traditional Net Promoter Score is focused on your customers. It\u2019s all about your <\/span><b>external reputation and how your customers perceive your brand<\/b><span style=\"font-weight: 400;\">. But this concept can be applied to <\/span><b>other areas of your business<\/b><span style=\"font-weight: 400;\">, too.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For example, you can use an <\/span><b>Employee Net Promoter Score<\/b><span style=\"font-weight: 400;\"> (<\/span><a href=\"https:\/\/factorialhr.com\/blog\/enps\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">eNPS<\/span><\/a><span style=\"font-weight: 400;\">) to measure employee satisfaction and identify your level of <\/span><a href=\"https:\/\/factorialhr.com\/blog\/organizational-commitment\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">organizational commitment<\/span><\/a><span style=\"font-weight: 400;\">. This can help you determine <\/span><b>how happy and engaged your workforce is and how likely they are to recommend you to others as an employer<\/b><span style=\"font-weight: 400;\">. In fact, the tool is so effective at measuring employee satisfaction that most <\/span><a href=\"https:\/\/factorialhr.com\/blog\/agile-organization\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">agile organizations<\/span><\/a><span style=\"font-weight: 400;\"> now consider it <\/span><b>an essential HR metric<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There\u2019s also <\/span><b>a strong link between your NPS and your eNPS<\/b><span style=\"font-weight: 400;\">. For example, a company with a high eNPS (a high number of happy employees) is much more like to have a high NPS (a high number of happy customers). After all, <\/span><b>happy employees provide a much more positive customer experience<\/b><span style=\"font-weight: 400;\">. By regularly tracking your eNPS and improving your employee experience, you are bound to see a knock-on effect on your customer NPS, too. The two work hand in hand.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">At Factorial, we understand that <\/span><b>measuring employee satisfaction can be a huge challenge for human resources<\/b><span style=\"font-weight: 400;\">. We also know that an eNPS can be a great tool to overcome this. That\u2019s why we\u2019ve created our own <\/span><b>eNPS app<\/b><span style=\"font-weight: 400;\">. You can use the app to prepare and <\/span><b>send out your own employee eNPS surveys and regularly track your employee satisfaction levels<\/b><span style=\"font-weight: 400;\">. You can then analyze your feedback through the Factorial dashboard.\u00a0<\/span><\/p>\n<p><a href=\"https:\/\/factorialhr.com\/templates\/employee-satisfaction-survey\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" class=\"aligncenter wp-image-47789 \" src=\"https:\/\/factorialhr.com\/wp-content\/uploads\/2020\/12\/11173545\/employee-satisfaction-survey-300x145.jpeg\" alt=\"employee satisfaction survey\" width=\"727\" height=\"351\" srcset=\"https:\/\/factorialhr.com\/wp-content\/uploads\/2020\/12\/11173545\/employee-satisfaction-survey-300x145.jpeg 300w, https:\/\/factorialhr.com\/wp-content\/uploads\/2020\/12\/11173545\/employee-satisfaction-survey-768x370.jpeg 768w, https:\/\/factorialhr.com\/wp-content\/uploads\/2020\/12\/11173545\/employee-satisfaction-survey.jpeg 830w\" sizes=\"(max-width: 727px) 100vw, 727px\" \/><\/a><\/p>\n<h2><b>Real-life examples<\/b><span style=\"font-weight: 400;\">\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Let\u2019s finish by taking a look at a few real-life examples of companies that have used the Net Promoter Score to enhance their business:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The media monitoring company <\/span><b>Mention <\/b><span style=\"font-weight: 400;\">used NPS surveys to <\/span><b>reduce its churn rate by 50%<\/b><span style=\"font-weight: 400;\">. After analyzing survey results, the company sent out custom offers to customers in line with their satisfaction levels. Promoters were offered discounted upgrades, passives were offered an extended free trial period, and detractors were asked for suggestions for improvement.<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Magoosh<\/b><span style=\"font-weight: 400;\">, an online standardized test prep site, used NPS data to <\/span><b>identify common customer complaints and suggestions for improvement<\/b><span style=\"font-weight: 400;\">. By acting on these suggestions for improvement, the company managed to <\/span><b>increase its Net Promoter Score by 9 points<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Airbnb <\/b><span style=\"font-weight: 400;\">used NPS data to <\/span><b>predict future rebooking and referrals<\/b><span style=\"font-weight: 400;\">. For example, the accommodation rental company found that promoters were 13% more likely to rebook. Airbnb also found that promoters were 4% more likely to refer a friend than detractors.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Ultimately, the most important thing to remember is that <\/span><b>NPS is not a meaningless vanity metric<\/b><span style=\"font-weight: 400;\">. Provided you include an open-ended follow-up question, you can use this tool to collect valuable suggestions for improving your customer experience. This will enable you to <\/span><b>continuously improve as a business, become more competitive, and build a solid reputation in the eyes of your target market<\/b><span style=\"font-weight: 400;\">. And this is the key to <\/span><b>sustainable long-term growth<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Customer reviews and recommendations have never been so important. In fact, according to BrightLocal\u2019s 2023 consumer survey, 84% of people trust online reviews as much as personal recommendations. That means that it only takes a couple of bad customer experiences to potentially damage your brand reputation. And that\u2019s why it\u2019s so important to keep track<a href=\"https:\/\/factorialhr.com\/blog\/nps\/\" class=\"read-more\"> [&#8230;]<\/a><\/p>\n","protected":false},"author":80,"featured_media":94424,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[348],"tags":[],"class_list":["post-94337","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-culture-engagement-2"],"acf":{"topics":false},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.5 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>NPS: how and why you should calculate it | Factorial<\/title>\n<meta name=\"description\" content=\"Guide to NPS: How to calculate your Net Promoter Score and use feedback to enhance your customer experience. 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