Defined as the measure of the loyalty that exists between a supplier or business and its customers or consumers, Net Promoter Scores can also be used as a measure of employee loyalty. It’s a great way to measure the ‘stickiness’ and brand advocacy of a company’s biggest asset – its people.
Essentially it is a measure of how willing someone is to recommend you to other people and it has become a popular method of measuring customer loyalty, mainly because it is really simple. NPS will provide a metric that you can use to compare your company with others. It also allows you to measure your success in trying to improve your NPS over time.
NPS will provide a clear measure of an organisation’s performance, viewed through its customers’ or employees’ eyes and a good score is a strong indicator of long term, sustainable business success.
Your Net Promoter Score is calculated by subtracting the percentage of customers who are considered ‘Detractors’ from the percentage of customers who are ‘Promoters’.
Net Promoter Score =
Percentage of Promoters − Percentage of Detractors
For purposes of calculating a Net Promoter Score, ‘Passives’ count towards the total number of respondents, but their score does not directly affect the overall net score.
“Promoters” are loyal brand followers and enthusiast. They will be repeat customers and will openly refer you to their peer, friends, colleagues and family.
“Passives” are satisfied enough but are generally quiet, unenthusiastic customers who can be easily swayed or lost to the competition.
“Detractors” are the unhappy customers who no longer really wish to be working with a company but may be stuck in a contract. They do not speak highly of your company and may be a reputational threat.
Talk to one of our specialists to find out how you can use The Happiness Index to measure your Net Promoter Score on +44 (0)203 865 0989.