What is Net Promoter Score (NPS)?

Atlassian By Atlassian
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NPS, or net promoter score, is the standard measurement for gauging customer loyalty and satisfaction. It is highly effective for assessing satisfaction anywhere in the customer journey.
The concept behind the NPS is straightforward—aim for a great score. Think of it this way: Without a net promoter score, it’s harder to pinpoint where a company stands with its customers.
To discover how to calculate your net promoter score — and find out what your NPS means — use this guide. You will also learn NPS best practices, benefits, and strategies for success.

NPS score definition

Bain & Company devised the NPS in 2003 and it quickly became the standard KPI for measuring customer satisfaction, enthusiasm, and loyalty.

But what is NPS? A net promoter score comes from customers who answer the survey question, “How likely is it that you would recommend (a specific product, service, or company) to a friend or colleague?” Customers then rate their experiences on a scale of 0 (not likely to recommend) to 10 (extremely likely to recommend).
Your NPS has countless use cases that can help refine your customer journey mapping.

Why should teams track NPS?

 Tracking NPS helps teams:

  1. Identify opportunities for improvement. An NPS provides businesses with a roadmap: Businesses can use aggregate NPS scores to improve their service, customer support, delivery, and other areas. Low scores call for improvement, and high scores point to inherent strengths.
  2. Benchmark goodwill and standing against competitors. Every industry has a third-party-assigned benchmark score. Are you above or below that benchmark? You can also look for trends in your NPS data. If positive responses increase, the company is likely on the way up. A downward trend could point to customer churn.
  3. Monitor customer satisfaction and support customer retention. Top companies, such as Apple and Amazon, continuously track their performance and reduce friction throughout the customer journey. Use NPS best practices to identify strengths and weaknesses and prioritize easing friction points the team discovers in gathered data.

Pro tip: Net promoter scores are invaluable, but they aren’t the only necessary data points. Keep NPS data alongside other metrics, such as the five Agile KPI metrics

How to calculate NPS

Businesses calculate NPS as a percentage. Suppose there were 1,000 responses from a survey. Two hundred responses were from “detractors,” who scored the product from 0–6. Another 200 were “passives,” who scored the product or service 7–8. An additional 600 were “promoters,” who scored the product or service 9–10.

If you divide each group’s total by the sum of all survey responses and then subtract the percentage of total detractors from the sum of promoters, you receive your NPS. In our example, there were 1,000 responses. 20% were detractors. 20% were passives. 60% were promoters. This means the NPS is 40.

Interpreting your NPS score

Your NPS can range from −100 to 100. If your score is negative, that means you have more detractors than promoters. The reverse is true if your score is zero or above. While you should score as close to 100 as possible, getting a high score is surprisingly difficult. But what does it mean if an NPS is a low-sounding 7 or 8? It could actually be good news, depending on the industry.

In the software industry, for example, the 2022 benchmark is 14.1, according to Qualtrics XM Institute. In the car rental industry, the standard is 2.9. Knowing an industry’s NPS benchmark gives your score context. Specific industry benchmarks change yearly and are available online.

How to collect NPS feedback

Businesses typically use surveys to get their NPS. They may ask customers for feedback right away. Or they may ask for feedback after the customer’s interaction with them. Common surveying methods include:

  1. Email surveys: While there can be a delay in receiving email data, responses tend to be less rushed and more considered. Email surveys can also complement other survey methods when following up with respondents for further information.
  2. Website surveys: NPS surveys can appear on conversion pages as part of the thank you page. Or, they can pop up as an exit survey. 
  3. SMS surveys: You can ask the standard NPS survey question through text message. Expect brief responses, but follow up with: “Tell us a bit more about why you chose that score.” 
  4. Phone surveys: Phone surveys are useful for initial NPS scoring. They also work well for follow-ups with detractors to learn what’s wrong with a product or service.

Pro tip: Don’t send out surveys to all your customers simultaneously. Instead, send one NPS survey to 1/90th of the users each day for 90 days, so by the end of your data-gathering period, you gain a sense of all customer interactions over time.  For example, if you have 10,000 users, send 111 surveys to different users daily for 90 days.

Best practices for NPS surveys

When sending NPS surveys to customers, you want to yield the most accurate results possible. Follow these best practices for NPS surveys: 

  1. Always follow up. After respondents answer your questions, follow up with additional queries for clarity. You can also proactively reduce churn when you give customers a chance to speak.
  2. Ask open-ended questions. Start with specific customer experience questions, but leave a space in the NPS survey for open-ended feedback with the question, “Can you tell us a bit more about why you chose that score?” Aside from the potentially valuable information you may receive, you can learn more about the mindset of the person filling out the survey.
  3. Automate the process. Using an automated platform eases labor. Automated platforms also tend to improve responses through consistent, rules-based behavior.

Build better products with Jira Product Discovery

Measuring your NPS can improve the customer experience by pointing out where problems lie. But fixing the issues requires the right tools and team practices.

Jira Product Discovery enables product teams to gather and organize product ideas, opportunities, features, and solutions in a centralized tool and prioritize which ideas or features will drive the most impact.

Product teams can use their NPS as a valuable data point to measure customer satisfaction with a product. They can then use those insights to help inform the prioritization process. This can impact where they should focus their attention on improvements and shape their product roadmap.

Pro tip:  Use can use this customer service management template to address issues or complaints from customers. Over time, using the template should improve your NPS.

NPS score: Frequently asked questions

What is a good NPS score?

Perfection is impossible regarding an NPS. No company has achieved a perfect 100 score, and benchmark numbers differ by industry. Because of how the NPS works (percentage of promoters minus percentage of detractors), companies above zero have more supporters than detractors. Any score below zero indicates that a business has more detractors than promoters.

Are NPS scores important?

Net promoter scores give companies essential data that allows them to improve the customer experience. NPS data, however, is more valuable when you follow up with respondents with additional questions to get more context behind their answers and to discover the mindset of the respondent. When you follow up, you also get the chance to reduce customer churn and head off negative online reviews because you are giving detractors an opportunity to voice their concerns.

Whether your team uses an OKR vs. KPI framework, calculating your NPS is only the first step. There is the Customer Effort Score (CES), for example, that measures how easy it is for customers to resolve issues. Another data point is the Customer Satisfaction Score (CSAT). It is similar to NPS in approach but you can adjust it to include qualitative metrics on customer sentiment throughout the customer lifecycle. If customer satisfaction should drop at any point, you understand what aspect of the lifecycle to fix. Customer experience metrics such as these and NPS can make your company more responsive and better able to compete.

How do you improve a low NPS?

Improving a low NPS differs for every company, as there are different benchmarks for each industry. But in general, to improve a low NPS, you can do the following:

  1. Ensure your company understands that the customer experience is vital to success.
  2. Use the gathered NPS data to discover customer pain points.
  3. Use Jira Product Discovery to give your product teams a centralized tool to prioritize which ideas or features will drive the greatest impact on your NPS.
  4. Use Jira Software to address actions and track progress. 
  5. Keep up your dialogue with customers and use NPS throughout the company.