How to get started with NPS calculation?
Net Promoter Score seems to be on everyone’s mind. It is one of the most popular customer satisfaction metrics.
This blog introduces three ways of calculating Net Promoter Score, from using just pen and paper to utilizing special tools.
We will also go through how you should interpret the results you get, and what are the best actions to take when you see specific results.
Net Promoter Score (NPS) is widely used customer loyalty and satisfaction metric. Here is a quick overview of how the Net Promoter Score works.
The customer is presented with the question “How likely are you to recommend [company/product/service] to a friend or colleague?”
The customer gives their answer on a scale from 0 to 10.
Based on the answer, they are divided into the following categories:
We will discuss the categories in more detail later in the blog.
The final result is calculated by subtracting the percentage of Detractors from the percentage of Promoters.
In other words, your haters and fans are the ones that matter here. Passives are not taken into account when calculating a total NPS score.
As a result, you get an overall score between -100 and 100.
Here’s an example: If 30% of your customers were Promoters, and 20% were Detractors, your overall NPS score would be 10.
That’s the NPS calculation formula in short. We will go through it step-by-step in an upcoming section.
A good Net Promoter Score result depends on your industry.
Generally speaking, anything over 0 is considered a good result, as it means that you have more satisfied customers than unsatisfied customers.
If you get over 30, you are doing great!
What should you think about your three customer categories?
How do they affect your business?
How should you react to them?
Let’s answer these questions.
Promoters are the most satisfied and loyal customers you have.
When they answer your NPS survey with a score of 9 or 10, they are essentially saying that they are ready to recommend your business.
Don’t miss the chance to let them do so! Let your Promoters promote your company.
There is an easy way to do so.
When you connect your NPS survey with a testimonial request, you can tap into the moment when the happy customer is most likely to follow through with their urge to recommend.
Recommendations from your happy customers help a great deal with acquiring new customers.
Promoters are likely to keep purchasing from you. They might develop brand loyalty and are unlikely to switch their business to another company.
Take good care of your loyal customers, and you will experience a great return on investment in the form of customer lifetime value.
Passives are not exactly unhappy, but they are not loyal to your company, either.
They don’t have great complaints, but they might bring their business elsewhere if they see a better offer or opportunity.
You should aim to keep the passives on your side and listen to their feedback.
There is no long way to go from a passive to a promoter if you can play your cards right.
Just a little bit of personal attention and discussion with these types of customers will have good results.
Special note: Sometimes the line between a Promoter and a Passive can be a blurry one. For example, cultural differences can play a role in how some people answer NPS surveys.
It has been suggested that there should be a different scale for the European NPS results.
Whereas 7 and 8 are considered passive votes in the U.S., a score of 8 might be seen as very good in European countries.
Thus, the EU-NPS would look like this:
Detractors are a diverse group of disengaged and disappointed customers.
There is a great difference between someone who gives you a 6 and someone who gives you a 0.
However, when you get a bad NPS score, it is a sign that you are about to lose a customer if you don’t act fast. In the worst-case scenario, they will spread negative word-of-mouth about your brand.
After all, they are saying that they would not recommend your business. That’s a big sign of distrust.
You still have a chance to turn your unsatisfied customers into promoters, if you do the right things.
Here is a game plan for situations where you get a bad NPS result:
There is no guarantee that the customer will stay with you, but at least you have tried. Reasonable customers will understand that everyone makes mistakes.
Even though you want every customer to be happy, remember to pick your battles.
If someone gives you a 0 because their shipment was delayed by one day (even when it’s not your fault), or because they didn’t like your looks during a sales meeting, is this customer even worth saving?
Let’s move on to the main reason why you are reading this article.
Here are three methods to calculate Net Promoter Score after you have collected the responses.
The first option is to do it all yourself.
If you are a small business owner, this method might work just fine for you. You can keep track of each customer, and truly understand how NPS works.
The very first step is to ask your customers the NPS question: “How likely are you to recommend [company/product/service] to a friend or colleague?”
Regardless of how you conduct the survey (electronically or manually), store the responses so that you can easily access them. Use an Excel spreadsheet or mark them on a post-it. Whatever works best for you.
After you have completed the survey, count how many responses you got in total.
Next, take your responses and divide them into three categories: Scores 0-6 for Detractors, 7-8 for Passives, and 9-10 for Promoters.
Count how many responses there are in each category.
Now you need to count how many percentages of the total responses belong to each category.
In case you need a refresh on percentage calculations, here is a simple formula:
Number of Promoters / Total Responses x 100 = % of Promoters
Number of Detractors / Total Responses x 100 = % of Detractors
Number of Passives / Total Responses x 100 = % of Passives
It is optional to count the percentage of passives, as they do not play a role in the final NPS calculation.
Now, take the percentage of Promoters and the percentage of Detractors. Subtract the latter from the former.
% of Promoters – % of Detractors = your NPS
This is the final NPS calculation result.
If you found the previous option tiring, there are easier ways to calculate your Net Promoter Score.
For example, the interactive NPS calculators that can be found online.
You just have to mark the ratings you have received, and the calculator will count percentages for each category, and provide a final result.
Here’s one example:
Add up the number of responses provided for each score.
Add up the total number of responses provided for each group.
of all responses
of all responses
of all responses
Subtract the percentage of Detractors from the percentage of Promoters.
This is your NPS
This type of calculation still requires some manual work. Compiling an overarching NPS report is your job.
The easiest way to calculate NPS is to use software.
The whole process is automated, starting with the NPS survey and ending with visualizing the results in easy-to-interpret charts.
The only thing that requires some manual work is uploading a contact list to the platform.
See the list of the best NPS software tools we have compiled.
The NPS question alone is not enough to find out why your customers feel the way they do.
To find out how to improve, you must ask more questions.
A good tactic is to place a simple “What is the reason for choosing this score?” after the NPS rating.
You might even create rules and conditions for your next question, and personalize it according to which rating the customer chose.
For Promoters: “Nice to hear you’ve had a great experience! Would you like to tell us what you enjoyed most about the interaction today?”
Additionally, you can ask your Promoters an additional question: “Would you like to leave your comment publicly?”
This way, you get to render feedback into authentic testimonials.
For Passives: “Thank you for your feedback! Would you like to tell us how we could improve and make your experience better next time?”
For Detractors: “Thank you for your feedback! Sorry to hear you are not satisfied with the service we provided. Would you like to tell us how we could improve our service? You can also leave your contact details in case you want us to be in touch with you personally.”
You might feel tempted to ask multiple questions.
While that might bring you more detailed feedback, it can also defeat the greatest advantage of NPS surveys: their easiness and briefness.
The more questions you ask, the lower the completion rate of the survey will be. People will get fed up with the questions and opt out of the questionnaire altogether.
It’s important to conduct regular Net Promoter Score surveys. It is the only way to follow how your overall customer satisfaction is developing, and notice sudden changes.
There are two types of NPS you should be measuring: transactional and relationship NPS.
Transactional NPS is measured in specific touch points of the customer journey. It is prompted by triggering events.
For example, you could ask for an NPS rating after a meeting, after a purchase, or after a website visit.
This way you get to measure the customer experience in each interaction.
You might notice that your follow-up meetings get a high NPS score, while the surveys conducted right after delivery are telling a different story.
Now, you get a chance to investigate why that is and how to improve the delivery process.
Transactional surveys are important for any business.
Relationship NPS is a survey that is conducted in regular intervals, like four times a year. The survey is not triggered by a certain event, but a certain time.
It gives you an overview of the overall sentiment. The customers are not answering based on a set moment or interaction but on their overall opinion about your company.
Not only do you get an overall impression of all your customers, but you also can track the health of each individual customer relationship.
A consistent relationship NPS survey is especially important for B2B companies where collaborations last for a longer period of time.
Combining relationship and transactional survey types gives you a holistic view of the customer experience.
Remember to track the progress of each round of Net Promoter Score. It lets you know if there is room for improvement.
The best way to benchmark your NPS survey results is against yourself.
As the average NPS varies greatly between industries, and even between geographical areas, it makes no sense to compare yourself to just any other company.
If you need to compare yourself to other companies, choose businesses that work in the same industry and are located in the same area.
Another aspect to keep in mind is the response rate.
It makes no sense to compare two surveys when one has a 10% response rate and the other 70%.
There is probably no way for you to know the response rate of your competitors’ surveys, so should you even stress about their results?
What’s the point of doing all this?
Calculating the Net Promoter Score regularly helps you grow your business!
Things that you can avoid when implementing an NPS program:
Things you can gain with NPS:
All the factors combined give us 3 ways in which NPS helps your business growth.
As a business that serves customers, nothing matters more than the opinion of your customers.
When you follow their advice, you can attract even more loyal customers.
Getting new customers is almost always more expensive than retaining existing customers. All the effort and money spent on advertising and different marketing campaigns…
NPS surveys help you identify those who are about to leave and give you a chance to turn them into satisfied customers.
The opinions of your happy customers have an impact on your new potential customers.
Testimonials and recommendations work as social proof that helps you get more clients, and eases the purchase process.
Additionally, they are much more affordable than paid ads.
We have learned three ways to calculate Net Promoter Score, how to interpret NPS results, and how to act on them.
If you don’t want to spend too much time on the NPS program, I highly recommend trying out an NPS software like Trustmary.
When you employ a software tool, manual work is minimized and you can fully focus on implementing changes and actions based on the insights your get from NPS surveys.
Don’t forget to collect authentic testimonials from your happy customers. That can also be easily done with Trustmary’s automatic surveys.
How to calculate Net Promoter Score?
NPS is calculated by subtracting the percentage of Detractors (those who give you an NPS rating of 0-6) from the percentage of Promoters (those who give you a score of 9 or 10).
What tools can I use for calculating NPS?
If you want to do it from scratch, you can calculate NPS by yourself. If you want less work, you can use online calculators or even let a software tool calculate everything automatically.