Net Promoter Score for Small Businesses: How to Measure It and Where It Falls Short

One question: would you recommend us?

The Net Promoter Score, or NPS, measures customer sentiment with a single question: how likely are you to recommend this product or service to a friend or colleague? Fred Reichheld proposed it in a 2003 article. If you want a simple way to track satisfaction and are unsure how to design a survey, it is a reasonable starting point.

How it is calculated

Respondents answer on a scale from 0 to 10, and the scores fall into three groups:

• Promoters: 9 or 10
• Passives: 7 or 8
• Detractors: 0 through 6

NPS is the percentage of promoters minus the percentage of detractors. Passives are left out of the formula. The result ranges from minus 100 to plus 100.

As a made-up example to show the arithmetic: if 10 people answer and 5 are promoters, 3 passives, and 2 detractors, the score is 50 minus 20, or plus 30.

Using it with few customers

When you have few customers, the reasons matter more than the number. Ask two questions together:

1. How likely are you to recommend us to a friend or acquaintance, from 0 to 10?
2. What is the main reason for that score?

The free-text answer to the second question is the part you can act on. Detractors' reasons are candidates for what to fix. Promoters' reasons are candidates for the wording on your sales page.

Timing matters. Ask after customers have used the product for a while, not right at purchase or delivery. Asking before they have felt the result gives scores that do not match their real view.

Limits

NPS has several weaknesses:

• With a small sample, one person can swing the score. Treat results from fewer than ten people as individual answers, not a trend.
• People score differently. Some habitually rate high and others low, and habits vary across cultures.
• Other researchers have questioned how well NPS predicts future revenue. Keep the claims made for the metric separate from its demonstrated power.
• A score alone does not tell you what to do.

Also, recommending is not a natural act for every product. In areas people rarely discuss, a low likelihood to recommend does not necessarily mean dissatisfaction.

Pair it with other measures

NPS is handy as an entry point, but it is safer to read it next to retention, repeat purchases, and the number of actual referrals. If scores are high and referrals do not grow, the cause may lie in how you ask or in the nature of the product.

Asking well

Keep the survey to two questions. A heavy form lowers the response rate. If you send it by email, replying with just a number is fine.

Also think about the customers who do not answer. People who reply tend to lean toward those who already like you, so a low response rate may mean the score looks better than reality.

When a dissatisfied answer arrives, do not just record the number. Reply individually, ask what went wrong, and fix what you can and tell them. That kind of response can lead to another purchase.

When tracking the score over time, keep the group you ask consistent. New customers and long-term customers can score differently. Before comparing with a previous round, check that you asked the same kind of customers under the same conditions.

Decide how often to ask, too. Asking repeatedly at short intervals burdens customers. A few times a year with the same wording makes changes easier to compare.

What to do next

1. Pick 10 to 20 recent customers and send them the two questions.
2. Sort the answers into promoters, passives, and detractors, and compute the percentages.
3. Read the detractors' reasons and look for ones that appear more than once.
4. Pull wording for your sales page from the promoters' reasons.
5. Ask the same kind of customers again in three months, and compare the reasons as well as the scores.