Tag Archive for NPS

How to Calculate NPS

 

Net Promoter Score

 

Net Promoter Score (NPS) can be a helpful snapshot of satisfaction and to learn more about consumers who are detractors, promoters, and passives. If you are collecting NPS data from multiple sources, you may be wondering how to calculate this score manually.

If you’re not familiar, NPS is a score that measures satisfaction. It’s based on one question you may see often on customer feedback surveys, asked on phone interviews, or even see on mystery shopping reports.

The question is quite simple: “On a scale of 0 to 10, how likely are you to recommend this company’s product or service to a friend or colleague?”

There are two data points to look at – the actual score given and the NPS score.

The actual scores, of course, range from 0 to 10, with 10 being the most satisfied. This is a helpful data point to look at for determining which customers, or how many customers, are detractors, promoters, or passive. This is how each category is defined:

Detractors are those giving ratings 6 and below. They are not particularly thrilled by the product or the service. They, with all likelihood, won’t purchase again from the company, could potentially damage the company’s reputation through negative word of mouth.

Passives are those giving ratings of 7 or 8. They are somewhat satisfied but could easily switch to a competitor’s offering if given the opportunity. They probably wouldn’t spread any negative word-of-mouth, but are not enthusiastic enough about your products or services to actually promote them.

Promoters are those giving ratings of 9 or 10. They love the company’s products and services. They are the repeat buyers, are the enthusiastic evangelist who recommends the company products and services to other potential buyers.

The second data point is the actual NPS score, which can range from -100 to 100. This is calculated by subtracting the detractors from the promoters – sounds easy, right? But what happens when you are collecting NPS data from multiple sources and end up with a spreadsheet of data? It could take all day to try to calculate manually. There is an easy formula to calculate this in Excel, and it only takes a few minutes.

Once you have your column of NPS data, you’ll want to add a formula to calculate your score.

The formula is: =100*(COUNTIF(BU2:BU27,”>8″) COUNTIF(BU2:BU27,”<7″))/COUNT(BU2:BU27)

In the example above, it assumes that your NPS scores are located in column B, rows 2 through 27. To make this formula work for you, all you need to do is change out BU2 and BU27 to the column and row numbers that contain your data.

Let’s take a look at a quick example of how the formula would change based on your data. If this is what your spreadsheet looks like, with the last column (E) being the data for NPS, which goes from row 2 through row 43:

 

 

Then your formula would look like this:

The formula is: =100*(COUNTIF(E2:E43,”>8″)-COUNTIF(E2:E27,”<7″))/COUNT(E2:E27)

All it took was a quick replace of BU with E.

NPS is a great tool to get a quick snapshot of satisfaction levels; it’s no longer a chore to calculate it manually across multiple touch points, so make sure you’re asking that very important question at every opportunity possible!

 

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CEI is the new NPS

 

You’re likely very familiar with the NPS score – Net Promoter Score. This tool asks one simple question: “How likely is it that you would recommend us to friends or family?”Using a 0-10 scale rating, with 0 being “not at all likely” and 10 being “extremely likely” businesses use it as a gauge of customer satisfaction – after all, if customers are rating this question as a 10, it’s likely they had a good enough experience to want to recommend to others.

 

The newest tool that is emerging no longer focuses on the NPS rating. Instead, we’re seeing the focus shift to CEI – Customer Effort Index.

 

Simply put, customers are asked to rate the effort that was put into their interaction with your company on a similar scale as the NPS rating; however, with CEI, businesses want to see a lower rating, meaning that the effort was minimal.

 

How can you ensure your customers do not have to go through significant effort to do business with you?

 

1. Ensure your telephone system is simple, gets customers where they need to go quickly, and don’t ask customers to repeatedly enter information, such as a customer number, every time they are taken to the next step of the interaction.

 

2. For online purchases, make sure all costs related to the purchase, including shipping and tax, are spelled out early in the process. Waiting until the last step of the process can frustrate customers and lead to abandoned carts. Make sure your website allows for easy navigation so there is not a lot of effort put into finding what customers are looking for.

 

3. Is your return process simple? Ensuring that customers are not spending a lot of time in line, or filling out multiple forms to make a simple return can go a long way in customer satisfaction.

 

4. Are your registers well staffed? Long lines at the point of purchase can frustrate any customer – make it easy for them to complete the transaction. Some POS systems seem to have customers confirm information more than once, or answer feedback questions. Some even ask if you’d like to make a donation to a specific charity. This is the final step in their interaction with your business; make it simple and efficient.

 

There are many other ways to decrease customer effort, and taking the time to look at your operational procedures and reviewing interactions from the customer’s point of view will help you learn what takes the most effort. From there, you can find ways to make it easier on your customer base.

 

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