If you or someone in your organization has received a Net Promoter Score (NPS) survey and isn’t familiar with it, you might hesitate to respond.
For organizations that send out NPS surveys, it’s equally important to understand why they matter and how to use them effectively. Doing so can help you gather more meaningful feedback and improve overall results.
Customer feedback plays a big role in shaping an organization’s reputation. Low participation or poor scores can signal issues with customer experience, which may impact loyalty, retention, and ultimately revenue.
At COEO, we understand how important NPS is as a measure of customer satisfaction and long-term success. If you’re not familiar with how NPS works, it can be difficult to know how to interpret or act on the feedback.
By the end of this article, you’ll understand what an NPS score is, the importance of an NPS survey, the benefits of using an NPS score, and how an NPS score is calculated.
What is an NPS survey?
A Net Promoter Score (NPS) survey is a simple way for organizations to measure customer experience and loyalty. It asks customers how likely they are to recommend a company’s brand, products, or services to a friend or colleague.
Customers respond on a scale from 0 to 10, and based on their answer, they are grouped into three categories:
- Promoters (9–10):
These are highly satisfied and loyal customers who are likely to recommend your organization and help drive growth through positive word of mouth. - Passives (7–8):
These customers are generally satisfied but not strongly loyal. They are less likely to actively promote your business and may consider other options if a better offer comes along. - Detractors (0–6):
These customers are dissatisfied with their experience and may share negative feedback, which can impact your reputation and future growth.
Many organizations follow up NPS surveys with an additional question or outreach to understand the reason behind the score, helping them identify areas for improvement and strengthen the overall customer experience.
The Importance of NPS Surveys
Net Promoter Score (NPS) surveys are one of the most effective tools organizations can use to measure customer satisfaction and loyalty. They provide a clear, easy-to-understand snapshot of how customers feel about your brand, products, and services.
At their core, NPS surveys help identify your strongest advocates, customers who are highly satisfied and likely to recommend your business to others.
These promoters play a critical role in driving organic growth through referrals and positive word of mouth, which can be more impactful than traditional marketing efforts.
At the same time, NPS surveys bring visibility to customers who may be less satisfied. A lower score often signals a higher number of detractors; customers who may have had a poor experience and could share negative feedback or consider switching to a competitor.
Without this insight, organizations may miss opportunities to address issues before they escalate.
By analyzing feedback and identifying trends, businesses can make informed decisions to enhance their products, refine their services, and address pain points that may be impacting customer satisfaction.
Consistently tracking and working to improve NPS can improve customer experience, but also supports sustainable, long-term growth by turning satisfied customers into advocates for your business.
The Benefits an NPS Survey Brings to an Organization
In addition to capturing customer feedback on your brand, products, and services, NPS surveys offer several key benefits for organizations.
One of the biggest advantages is simplicity. The NPS framework is easy to understand across all levels of the organization, from executives to frontline employees, making it easier to align teams around a shared focus on improving the customer experience.
NPS feedback is also highly actionable. The open-ended follow-up question provides direct insight into why customers gave their score, helping organizations identify areas for improvement, refine products and services, and better train employees.
Another major benefit is consistency and benchmarking. Because NPS is a standardized metric, organizations can compare their scores against competitors and industry benchmarks, giving them a clearer understanding of where they stand in the market.
Overall, NPS helps organizations turn customer feedback into meaningful improvements that drive satisfaction, loyalty, and growth.
How NPS Scores are Calculated
A company’s Net Promoter Score (NPS) is calculated by subtracting the percentage of detractors from the percentage of promoters. For example, if 100 customers respond to a survey and 50 are promoters while 25 are detractors, the resulting NPS would be 25.
NPS scores can range from -100 to +100. A positive score (above 0) generally indicates that you have more promoters than detractors, which is a good sign. However, what qualifies as a “good” NPS can vary depending on the industry.
Different industries tend to have different benchmarks. For instance, the average NPS in the insurance industry is 74, while the average in healthcare is 45.
That’s why it’s important to evaluate your score in context, comparing it to industry averages and competitors, to provide a more accurate understanding of performance.
Beyond the number itself, NPS surveys offer valuable insight into customer sentiment. When customers provide feedback explaining their score, organizations gain a clearer understanding of what they’re doing well and where improvements are needed.
By analyzing this feedback and making targeted improvements, businesses can enhance their products and services, increase customer satisfaction, and ultimately drive higher NPS scores over time, leading to a stronger overall customer experience.
Determining if Using NPS Surveys is Right for Your Organization
Now that you understand what an NPS score is, why it matters, the benefits it provides, and how it’s calculated, you can better evaluate whether using NPS surveys is the right approach for your organization.
NPS surveys are a simple yet powerful way to gather direct feedback from your customers. Whether you’ve received an NPS survey or are considering sending one, they can provide valuable insight into how customers truly feel about your products, services, and overall experience.
By collecting and analyzing this feedback, organizations can identify strengths, uncover areas for improvement, and take action to enhance customer satisfaction. Over time, this leads to stronger relationships, increased loyalty, and better business outcomes.
At COEO, we understand how important customer feedback is to continuous improvement. We actively use NPS to measure customer sentiment and guide our efforts, reflected in our NPS score of 82, compared to the industry average of 43.
If you would like to learn more about how NPS surveys can help improve your customer experience, schedule a conversation with our team.
