Making customer feedback a two-way street delivers a multitude of benefits to you and a better experience for your customers. And how your company communicates internally about NPS is critical too. 

NPS is the brand measure of the total customer journey, the sum of all parts, encompassing both the rational and emotional aspects of loyalty over the life cycle of the relationship. Yet we often say that your actual score may not matter. It is important to keep in mind that NPS is a relative, not absolute, performance measure.  What matters more than your actual score is the score relative to your company and your industry. 

NPS is based on responses to the Likelihood to Recommend question, “How likely is it that you would recommend <brand> to a <friend /family member/colleague>?” 

The score is calculated by subtracting the percentage of Detractors from the percentage of Promoters. While Passives are not directly mentioned, they do play a role in the calculation as the more Passives there are, the percentage of Promoters and Detractors is impacted. Thus, the Passive categorization is extremely valuable in setting customer strategy and focusing action. 

At its core NPS is about separating customers into 3 categories that behave differently and deliver different economic outcomes. Research going back to the origins of NPS continues to validate the distinct behaviors of these 3 designations. The fact that these categories are directionally correct and are easy to understand drives employees at all level of the organization to take appropriate action and monitor shifts in status across the 3 categories, ultimately improving NPS.   

Promoters (scores of 9 -10) These are your most loyal customers.  They are the most profitable, spending more and staying longer. Their cost to serve is low.  The positive word of mouth spread by Promoters reduces acquisition costs and drives growth.  They are open to partnering with you on innovation.  

Passives (scores of 7-8) The risk represented by Passives is often overlooked. While not at immediate risk of churn, their ambivalent connection to your brand makes then highly susceptible to offers by your competition.  They are very price conscious impacting profitability. Passives are unlikely to spread positive word of mouth so provide little value in acquisition efforts.   

Detractors (scores of 0-6) These are your highest risk customers, not only in terms of potential to churn but potential to cause damage to the brand.  Cost to serve is high.  Negative word of mouth impacts acquisition efforts. 

A strong program based on these fundamental NPS best practices will have robust follow up and clear plans for acting on insights, but your follow up and actions are only as good as the data set you have. Plan now to take your program to the next level by expanding your data set so that you have reliable insight on the complete customer base. For that, you’ll need predictive scoring, or Spectrum NPS. To get there, download our guide, take our comprehensive training course, or read about the future of NPS.