How to Calculate Net Promoter Score (NPS)
Net Promoter Score (NPS) is a popular metric used to measure customer satisfaction and loyalty. It is calculated based on responses to a single question: “How likely are you to recommend our product/service to a friend or colleague?” Respondents answer on a scale of 0 to 10.
Survey Your Customers
Ask customers to rate their likelihood to recommend your product/service on a scale of 0 to 10.
Group the respondents into three categories:
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- Promoters (score 9-10): Loyal enthusiasts who will keep buying and refer others.
- Passives (score 7-8): Satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
- Detractors (score 0-6): Unhappy customers who can damage your brand through negative word-of-mouth.
Calculate the Percentage of Promoters, Passives, and Detractors
- Promoter Percentage: (Number of Promoters / Total Number of Respondents) x 100
- Passive Percentage: (Number of Passives / Total Number of Respondents) x 100
- Detractor Percentage: (Number of Detractors / Total Number of Respondents) x 100
Compute the NPS Score
- Subtract the percentage of Detractors from the percentage of Promoters.
- NPS = Promoter Percentage – Detractor Percentage
Example Calculation
Imagine you conducted an NPS survey and received responses from 100 customers. The responses are as follows:
- 40 customers are Promoters (score 9-10)
- 30 customers are Passives (score 7-8)
- 30 customers are Detractors (score 0-6)
Interpreting NPS Scores
- Positive NPS (0 to 100): Indicates more promoters than detractors, which is generally a good sign.
- Negative NPS (< 0): Indicates more detractors than promoters, suggesting issues with customer satisfaction or loyalty.
- High Positive NPS (> 50): Indicates strong customer loyalty and satisfaction.
Net Promoter Score is a straightforward yet powerful metric for gauging customer satisfaction and loyalty. By understanding how to calculate and interpret NPS, businesses can gain valuable insights into customer perceptions and identify areas for improvement to foster loyalty and drive growth.
