Net Promoter Score

A net promoter score (NPS) is a metric presented as a single question asking customers to assess the likelihood of recommending a company on a scale of 0-10. Once a company receives the results, it divides customers into groups based on their rate: promoters (9-10), passives (7-8), and detractors (6-0).

In this article, we’ll unveil how to calculate a net promoter score. We’ll also review how to measure and improve this indicator.

Why is it important to measure a net promoter score?

A net promoter score enables marketers to identify problems in their businesses. With its help, entrepreneurs can gauge customer experience and loyalty. After calculating an NPS, you can figure out the opportunities for future business and revenue growth. A two-minute survey allows you to receive customer insights on customer loyalty. After measuring customers’ willingness to recommend your brand, you can unveil whether consumers like and appreciate your product and company as a whole.

If your NPS is 9 and higher, it means that consumers are loyal to your brand and have a positive customer experience. If your net promoter score amounts to 7 and lower, it indicates that you should consider some improvements to increase customer satisfaction. For example, you can make some alterations to customer service, user experience, product features, etc. Asking respondents open-ended questions about the reason for their rating can provide insights into customer dissatisfaction, and it helps you identify problems and eliminate them.

NPS estimations prevent you from having your brand reputation damaged. This short survey allows you to identify problems within your company. If you see that consumers give you low ratings, ask them about the reasons. It is necessary to improve your product or service and make customers happy.

Now that you know why assessing an NPS is crucial, let’s discuss some essential calculations. The next section will help you estimate the metric for your company.

How to calculate a net promoter score?

You need to get the indicator whether you have a large business or a small family company. It will help evaluate the experience with your business and assess customer loyalty. Let’s figure out the process step-by-step.

To estimate a net promoter score, you need to create a short survey asking customers to rate the likeliness that they will recommend your company to their family, friends, and colleagues. They should provide you with a rating on a scale of 0-10. After, calculate the percentage of detractors and promoters. Then, subtract the percentage of detractors from the percentage of promoters.

Now let’s have a closer look at the formula to make everything clear for you.

NPS = (Promoters/Total Number of Respondents) - (Detractors/Total Number of Respondents)

For instance, if you decide to send a survey to 100 respondents and receive 60 promoters, 10 passives, and 30 detractors, your net promoter score would be 30 (60% - 30% = 30%).

Simply put, you need only four steps to get your NPS and work towards its improvement.

1. Send a survey to customers. You can ask whether customers are likely to promote your company to friends on a scale from 0 to 10 in different ways: surveys, social media pools, or pop-up notifications. Provide customers with a 10 numeric scale to select the rating. Don’t forget to ensure a blank field so that clients could explain their scores if they wish. Their open-ended answers will help you make alterations to your service faster.
2. Organize responses into three groups. Once you receive the answers, split them up into three groups: detractors (0-6), passives (7-8), and promoters (9-10). It will help you count the number of satisfied, neutral, and unsatisfied customers.
3. Estimate the percentage. The next step is identifying the percentage of detractors, passives, and promoters. Divide the number of people in each group by the total number of respondents. Afterward, convert your indicators into percentages.
4. Calculate the NPS metric. Once you finish estimating the percentage, subtract the detractor percentage from the promoter percentage to get your net promoter score. As a result, you’ll be able to see the eagerness of your customers to promote your product.

Now that you know how to calculate an NPS, it’s time to proceed to the next section. It will help you figure out whether the metric shows positive results and high customer satisfaction.

How to interpret a net promoter score?

After estimating the metric, you need to interpret it right. In this section, we’ll unveil the scores that are considered satisfactory for your business and indicate that people are happy with your product.

Every NPS above zero is a positive metric. It indicates that you have more promoters than detractors. It shows that you have more satisfied customers than unsatisfied ones. If your score is 50, your customer service, customer experience, and product are excellent and customers are happy. When you have an NPS of 70+, it shows that consumers rate your company as the best. They eagerly recommend your product to friends, family, and colleagues.

Since a universal standard for an NPS doesn’t exist, most businesses use competitors' scores as a comparison. This way, they find out whether it’s necessary to improve the measure. If the metric is lower than your rivals’, then you should explore their customer service approaches and adapt their methods.

Now that you know how to interpret your score, let’s see how to measure it.

How to measure a net promoter score?

After exploring the ways to calculate and interpret the metric, it’s essential to know how to measure it. Let’s now review the example to figure it out.

Let’s say you’ve already sent a short survey to consumers asking whether they will recommend your company to others. Once you’ve collected the results, you identify the number of respondents, the promoters, passives, and detractors. You have 100 respondents, including 70% of promoters, 10% of passives, and 20% of detractors. It’s time to estimate your net promoter score. To do it, subtract the percentage of detractors from promoters.

NPS = 70% - 20% = 50.

Your net promoter score is 50, which is an excellent result. It shows that people enjoy your product and will promote it to their closest people. Since the metric doesn’t have universal standards, you can also measure your NPS the other way. You need to see the NPS of competitors and compare it with yours. This way, you’ll know what actions you should take next. If your net promoter score is lower, consider conducting research. Identify the top performing companies in your industry and analyze their strategies. Do everything possible to make your business a better place for consumers.

Now that you know how to measure an NPS, let’s uncover how to improve it. If you’ll have a low NPS, you’ll be able to eliminate the problems and increase the indicator.

How to improve a net promoter score?

After receiving the results of the survey, you might wonder how to use this information. In this section, we’ll unveil the strategies that will help you increase your net promoter score.

• Show customers that you hear their feedback. During or after the short NPS survey, asking open-ended questions, conducting interviews, and sending follow-up emails are essential. It will help you identify the reasons for high or low scores. This information is crucial for your company since it helps increase satisfaction and customer loyalty. Once you gather the necessary feedback from customers, you can focus on providing them with the best experience. When improving customer service, product, or user experience, pay attention to customers’ input. Consumers will be happy to see that you care and strive to improve. First, start with consumers who are not likely to recommend your company (a group with a 0-6 rating). Assign a person who will contact these customers and understand their problems and complaints. Afterward, direct your efforts on improving the situation and eliminating these issues.
• Make sure that your team works towards better NPS. Conduct meetings to explain that the net promoter score is crucial for attaining the brand’s major goals and reaching growth. Every team member should understand that they need to do all in their effort to get new promoters. Promoters help establish brand recognition, trust, brand awareness, and new customers. Explain the NPS’s peculiarities and ways to track, calculate, measure, and improve it. Moreover, you can reward your team for receiving positive net promoter scores and feedback.
• Conduct regular meetings. These interactive meetings will help you make sure that everyone strives to provide customers with the best experience. Besides, you can discuss the main problems and try brainstorming to find the best solutions. You can also talk about the alterations to your company to increase customer satisfaction.
• Use open-ended customer responses. NPS surveys often include open-ended questions. Marketers use them to find out the reason for a high or low score so that they can instantly remove the issue. Customer feedback serves as a guide for departments. It points out the areas that need their close attention.

Congrats, now you know what an NPS is and why it’s essential. Make use of our instructions to calculate the opportunities for future business growth.

References:

1. This article helps figure out how to calculate and measure an NPS.
2. In this article, you’ll find a net promoter score formula.

Last Updated: 22.03.2023