Net Promoter Score (NPS) Calculator
Your Net Promoter Score (NPS):
Understanding and Calculating Your Net Promoter Score (NPS)
The Net Promoter Score (NPS) is a widely used management tool that can be used to gauge the loyalty of a company's customer relationships. It serves as a strong indicator of customer satisfaction and potential for growth, as loyal customers are more likely to repurchase and refer others.
What is NPS?
NPS is based on a single question: "On a scale of 0 to 10, how likely are you to recommend [Company/Product/Service] to a friend or colleague?" Based on their response, customers are categorized into three groups:
- 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.
How to Calculate NPS
The NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters. Passives are included in the total number of respondents but do not directly factor into the score itself.
The formula is:
NPS = (% Promoters) - (% Detractors)
The score can range from -100 (if every customer is a Detractor) to +100 (if every customer is a Promoter).
Why is NPS Important?
NPS provides a simple, clear metric that can be easily understood across an organization. It helps businesses:
- Measure customer loyalty and satisfaction.
- Identify areas for improvement in products, services, or customer experience.
- Benchmark performance against competitors or industry standards.
- Predict future growth and customer retention.
Interpreting Your NPS Score
Generally, an NPS score above 0 is considered "good," above 20 is "favorable," and above 50 is "excellent." Scores above 70 are rare and indicate world-class customer loyalty. However, the interpretation can vary by industry, so it's often best to compare your score to industry benchmarks.
Example Calculation
Let's say you surveyed 100 customers and received the following responses:
- 60 Promoters (score 9-10)
- 20 Passives (score 7-8)
- 20 Detractors (score 0-6)
Total Respondents = 60 + 20 + 20 = 100
Percentage of Promoters = (60 / 100) * 100 = 60%
Percentage of Detractors = (20 / 100) * 100 = 20%
NPS = 60% – 20% = 40
In this example, your NPS would be 40.