Net Promoter Score (NPS) Calculator
Understanding the 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 proxy for customer satisfaction and is a strong indicator of growth potential.
How NPS is Calculated
NPS is derived from 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 responses, customers are categorized into three groups:
- Promoters (Score 9-10): These are loyal enthusiasts who will continue to buy 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.
The NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters:
NPS = (% Promoters) – (% Detractors)
The score can range from -100 (if every customer is a Detractor) to +100 (if every customer is a Promoter).
Why NPS Matters
A high NPS indicates strong customer loyalty, which often correlates with higher customer retention, increased word-of-mouth referrals, and ultimately, business growth. It provides a simple, actionable metric that can be tracked over time to assess the impact of customer experience initiatives.
Interpreting Your NPS
While there's no universally "good" NPS, scores are generally interpreted as follows:
- -100 to 0: Generally considered a poor score, indicating significant customer dissatisfaction.
- 0 to 30: A good score, suggesting a healthy balance of loyal customers.
- 30 to 70: An excellent score, indicating strong customer loyalty and advocacy.
- 70 to 100: World-class, achieved by very few companies.
It's often more valuable to compare your NPS against industry benchmarks or your own historical scores to track improvement.
Example Calculation:
Let's say you surveyed 100 customers and received the following responses:
- 60 Promoters (60% of total)
- 20 Passives (20% of total)
- 20 Detractors (20% of total)
Using the formula:
NPS = (60% Promoters) – (20% Detractors) = 40
This means your Net Promoter Score is 40. You can use the calculator above to quickly determine your NPS based on your own survey data.