How to Calculate Net Promoter Score

Net Promoter Score (NPS) is a powerful metric used to gauge customer loyalty and satisfaction. It measures the likelihood that your customers will recommend your product or service to others. A high NPS indicates that you're doing an excellent job of meeting and exceeding customer expectations. In this blog post, we'll explain how to calculate a Net Promoter Score and how to use it to drive business growth.

Understanding Net Promoter Score (NPS)‍

The Net Promoter Score is a customer loyalty metric developed by Fred Reichheld, Bain & Company, and Satmetrix in 2003. It's based on a single question: "On a scale of 0 to 10, how likely are you to recommend our product/service to a friend or colleague?" Customers' responses are grouped into three categories:

• Promoters (9-10): Loyal enthusiasts who will continue to buy from you and refer others
• Passives (7-8): Satisfied customers who might be swayed by competitive offerings
• Detractors (0-6): Unhappy customers who could damage your brand through negative word-of-mouth

How to Calculate Net Promoter Score‍

To calculate your Net Promoter Score, subtract the percentage of Detractors from the percentage of Promoters. NPS = % promoters - % detractors. For example, if 70% of respondents are Promoters, 10% are Detractors, and 20% are passives, your NPS would be 70-10=60.

Follow this three-step process:

Step 1: Collect survey responses: 

‍Distribute the NPS question to your customers through email, in-app surveys, or other feedback collection methods. Ensure you reach a representative sample of your customer base to obtain accurate results.

Step 2: Categorize respondents

Group respondents into Promoters, Passives, and Detractors based on their ratings.

Step 3: Calculate the NPS

Subtract the percentage of Detractors from the percentage of Promoters to calculate the Net Promoter Score. The formula is:

NPS = % Promoters - % Detractors

The score can range from -100 (all Detractors) to +100 (all Promoters). A positive NPS indicates that you have more Promoters than Detractors, which is a good sign.

Analyzing and Acting on Your NPS Results‍

Once you have calculated your NPS, it's important to analyze the results and take action to improve customer loyalty and satisfaction.

• Segment the data: Break down the NPS results by customer demographics, product lines, or other relevant factors to identify patterns and areas for improvement.
• Address customer feedback: Reach out to Detractors to understand their concerns and take corrective actions. Turn Passives into Promoters by addressing their needs and enhancing their experience.
• Benchmark against industry standards: Compare your NPS to industry benchmarks to understand how you're performing relative to your competitors.
• Track NPS over time: Regularly measure and track your NPS to monitor the impact of your efforts on customer loyalty and satisfaction.

Conclusion

The Net Promoter Score is a valuable tool for businesses to measure and improve customer loyalty. By understanding how to calculate and analyze your NPS, you can make informed decisions to enhance customer satisfaction, drive referrals, and ultimately grow your business. Start implementing NPS today to stay ahead of your competition and foster long-lasting relationships with your customers.

Please visit our website to schedule a no-obligation review of your current NPS program.