Net Promoter Score (NPS) Calculator
Your Net Promoter Score:
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 firm's customer relationships. It serves as a key indicator of customer satisfaction and potential for growth, as loyal customers are more likely to make repeat purchases, refer new customers, and provide valuable feedback.
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 your enthusiastic, loyal customers who will likely continue to buy and refer others, fueling growth.
- Passives (Score 7-8): These customers are satisfied but unenthusiastic. They are vulnerable to competitive offerings and could easily switch.
- Detractors (Score 0-6): These are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.
How is NPS Calculated?
The Net Promoter Score 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 contribute to the score itself.
The formula is:
NPS = (% Promoters) - (% Detractors)
The score is always presented as an integer between -100 and +100, not a percentage.
Why is NPS Important?
- Simplicity: It's easy to understand and communicate across an organization.
- Customer Loyalty: Directly measures customer loyalty and willingness to advocate for your brand.
- Growth Indicator: Higher NPS often correlates with stronger revenue growth.
- Actionable Feedback: By understanding who your Promoters, Passives, and Detractors are, you can tailor strategies to improve customer experience.
Interpreting Your NPS Score
An NPS score can range from -100 (if every customer is a Detractor) to +100 (if every customer is a Promoter). Generally, a "good" NPS score varies by industry, but common benchmarks are:
- Above 0: Generally considered "good." You have more Promoters than Detractors.
- Above 50: Excellent. This indicates a very strong customer relationship.
- Above 70: World-class. Achieved by very few companies.
A negative score means you have more Detractors than Promoters, indicating significant customer satisfaction issues that need immediate attention.
Example Calculation:
Let's say you surveyed 100 customers and received the following responses:
- Promoters (9-10): 70 customers
- Passives (7-8): 20 customers
- Detractors (0-6): 10 customers
Using the calculator above with these numbers:
- Total Respondents = 70 + 20 + 10 = 100
- Percentage of Promoters = (70 / 100) * 100 = 70%
- Percentage of Detractors = (10 / 100) * 100 = 10%
- NPS = 70% – 10% = 60
Your Net Promoter Score would be 60, which is generally considered an excellent score, indicating strong customer loyalty.