I recently stumbled upon a customer loyalty measurement scale termed Net Promoter Scale (NPS in short) via a conversation with a businessy friend of mine who was researching on it. I was truly amazed by the simplicity yet brilliance of NPS. Moreover, this is ideal for someone like me who wants to get honest customer feedback without harassing them with poorly designed questionnaires regarding a product.
The pith of NPS lies in the question:
“How likely is it that you would recommend our company/product/service to a friend or colleague?”
Those who respond with a score of 9-10 are called Promoters, and are considered likely to show positive behaviors like repeat purchase and positive referrals. Those who respond with a score of 0-6 are labeled Detractors, and they are believed to exhibit the negative behaviors like driving away from the brand, negative referrals. Responses of 7 and 8 are labeled Passives, and their behavior falls in the middle of Promoters and Detractors.
The NPS Calculation formula
(Number of Promoters — Number of Detractors) / (Number of Respondents) x 100
NPS ranges from -100 to 100 (inclusive).
With me doing the charting part and my friend doing the result implication and significance part we developed a simple NPS calculator app that takes total detractors, passives and promotors to output NPS. Refer to the screenshots below to identify what different NPS score signify.
Visit my friend's blog post on same topic for more information about NPS including it's pros and cons.