NPS Calculation: Learn All You Need To Know
Updated: 4 days ago
NPS otherwise known as Net Promoter Score is an important and valuable customer experience (CX) measure used by businesses, which is taken from a recommendation question asked of users. This post will give you a better understanding of what it is, how to do a NPS calculation, what is a good score, the value of NPS analysis and how it is applied.
Table of contents:
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What is NPS?
NPS stands for Net Promoter Score, which is a very important loyalty measure that businesses use to evaluate and improve their customer’s experience. This looks at the customers emotion towards the brand overall rather than a perception based on a single purchase or interaction as you have with customer satisfaction (CSAT) and customer effort scores (CES).
How is NPS calculated?
NPS is taken from a likelihood to recommend question, where the counts are converted into percentages leading to subtracting the percentage of Detractors from the percentage of Promoters and the end result is the Net Promoter Score (NPS). So, if 60% of people are Promoters and 20% are Detractors, the NPS is 40%.
Below is an example of a recommendation question, where the wording can be adapted from the consumer based example below to business to business with “recommend to colleagues or clients”.
Q. On a scale of 0 to 10 with 0 being not at all to 10 being extremely likely, how likely are you to recommend BRAND X OR WEBSITE to friends or family?
Manual NPS calculation
The manual NPS calculation is done by adding all those participants who gave a score of 0 to 6 (Detractors) and those participants who gave a score of 9 to 10 (Promoters) separately and turn them into percentages of the total audience then carry out the following calculation:
NPS Calculation Example
1000 people completed your survey and all were asked the likelihood to recommend question
200 gave a score of 0 to 6 (Detractors) – 20% (out of 1000)
400 gave a score of 7 to 8 (Passives) – 40% (out of 1000)
400 gave a score of 9 to 10 (Promoters) – 40% (out of 1000)
So, 400 Promoters minus 200 Detractors equals 200 then divide this by the total audience of 1000 participants and times by 100 gives you a Net Promoter Score of 20.
Note that the Net Promoter Score is not recorded as a percentage.
Also, NPS calculations can be done via Excel by downloading the data exports in .CSV or .XLS formats, which you can then clean and organise the data in order to do the NPS calculation above.
A much easier way is to automatically receive your Net Promoter Score through survey platforms software such as JotForm when running an online survey with the recommendation question included, which you can then track and view visually in chart form over time, if you wish to run the survey at separate time intervals such as quarterly or every 6 months.
As you can see above, the participants who answer this question are split into 3 groups:
Promoters (score 9-10)
Promoters are not only loyal customers who are likely to keep buying but also advocates in being positive and recommending your brand to others that will help your business grow.
Passives (score 7-8)
Passives are only satisfied with your brand and are unlikely to spread positive word of your business to others and are susceptible to moving away to your competitors.
Detractors (score of 0-6)
Detractors are unhappy customers who are much more likely to spread negative word about your brand due to their poor experiences with your business, which could have a damaging effect long term if this is not addressed.
What is a good NPS score?
The range for Net Promoter Scores is from the worst possible scenario of -100 (every customer is a Detractor) to the best scenario of +100 (every customer is a Promoter). So obviously a higher number is desirable but what is a standard benchmark that you should aim for?
To put this into context, the very large brands such as Apple iPhone or Samsung who have amongst the best Net Promoter Scores tend to score over 60, so anything from 30 or more is good, while 20 is around the average mark and a NPS of 0 is poor.
NPS analysis - Value from these key insights
The Net Promoter Score is used by a large number of brands around the world as a measure to guide growth with Promoter customers buying more, staying longer with the brand, recommending the service or product to others and provide feedback such as product or website improvements. A business that actively seeks to grow a greater number of promoters compared to their competitors is likely to have a larger share of the market. Note this should be like for like sector comparison and not versus a brands from another industry sector.
In order to achieve this, its far easier to focus on moving those considered as Passives (7-8) to become happy Promoters (9-10) than those that are Detractors (0-6), although their issues need to be addressed as well.
To delve deeper into results to give more context, you can include open-ended follow-up questions in asking the participant why they gave that score:
So, for Detractors (0-6) is what could the brand improve to make them more likely to recommend?
For Passives (7-8) is what could the business improve for them to give a score of 9 or 10?
Finally, for Promoters (9-10) is why are they very likely to recommend the brand?
In this way you can identify your business’s strengths, weaknesses to improve, threats to tackle and opportunities to possibly exploit to further enhance your customers experience of your product or service.
How NPS can be applied online?
As mentioned earlier you can track your business’s Net Promoter Score online through a NPS online software management system via platforms, where you can track not just the NPS but also the customer journey and setup an automatic cycle of surveys at different periodic intervals to see how well you are doing and compare different customer segments. This can be integrated with your day to day apps such as Slack or Zapier.
If you prefer just to run a NPS or customer survey that you can share via your website, email or social media there are templates available that you can customise to your needs rather than starting from scratch and are accessible from online platforms such as 123FormBuilder.com.
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