Net Promoter Score (NPS) Calculator
Understanding the Net Promoter Score (NPS)
The Net Promoter Score (NPS) is a widely used metric for gauging customer loyalty and satisfaction. It's a simple yet powerful tool that helps businesses understand how likely their customers are to recommend their products or services to others. This simple question can unlock valuable insights into customer sentiment and drive improvements.
How NPS Works
The NPS is calculated based on a single question: "On a scale of 0 to 10, how likely are you to recommend [our company/product/service] to a friend or colleague?" Customers are categorized into three groups based on their responses:
- Promoters (Score 9-10): These are loyal enthusiasts who will keep buying and refer others, fueling growth.
- Passives (Score 7-8): These are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
- Detractors (Score 0-6): These are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.
Calculating Your NPS
The NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters. The formula is:
NPS = % Promoters – % Detractors
The result is a score that can range from -100 (all Detractors) to +100 (all Promoters). A positive NPS is generally considered good, with scores above 30 often seen as strong.
Interpreting Your NPS Score
- +70 and above: World Class – Indicates exceptional customer loyalty.
- +30 to +69: Great – Shows a strong base of loyal customers.
- 0 to +29: Good – You have more promoters than detractors, but there's room for improvement.
- -1 to +29: Okay – You have more detractors than promoters; significant improvement needed.
- -100 to 0: Poor – A large number of unhappy customers, requiring urgent attention.
Why NPS Matters
Tracking your NPS over time allows you to monitor the health of your customer relationships. By understanding the "why" behind your scores (often through follow-up qualitative questions), you can identify areas for improvement, address customer pain points, and ultimately foster greater customer loyalty and business growth.
Example Calculation:
Let's say a company surveyed 100 customers:
- 70 customers rated 9 or 10 (Promoters)
- 20 customers rated 7 or 8 (Passives)
- 10 customers rated 0 to 6 (Detractors)
Percentage of Promoters = (70 / 100) * 100% = 70%
Percentage of Detractors = (10 / 100) * 100% = 10%
NPS = 70% – 10% = 60
An NPS of 60 is considered "Great" and indicates a strong base of loyal customers.