NPS (Net Promoter Score)
What is NPS (Net Promoter Score) and how is it calculated?
NPS, short for Net Promoter Score, is a key indicator that reveals how satisfied a company’s customers are, its image, and the loyalty they feel toward it. In other words, NPS is an indicator of our customers’ satisfaction, and it can be measured by asking customers just one question.
1. How to calculate NPS (Net Promoter Score)
Calculating NPS isn’t complicated at all – you only need to ask customers a question where they can rate their satisfaction on a scale from 1 to 10. Such as:
How likely are you to recommend our service? How much would you recommend our brand to someone else? Would you recommend our product? How likely are you to recommend us to a friend or family member?
Once customers respond, three groups are created based on the score they gave:
- Detractors. These are users who gave a rating between 0 and 6. This shows clear dissatisfaction, so they won’t recommend us. In fact, they’re likely to do just the opposite: tell their friends and family not to buy our products/services.
- Passives. These are users who gave a score of 7 or 8. This means they’re unlikely to recommend us – they might, but they also won’t become detractors or take any negative action against us.
- Promoters. These are users who responded with a rating of 9 or 10. That’s why they’re very likely to recommend us to family and friends, since their experience with us has been excellent.
To find our NPS, we convert the number of promoters and detractors into percentages, then subtract one from the other (passives are left out). The result of that subtraction is our NPS percentage.
Let’s look at an example to make it clearer. In our survey, a total of 200 customers responded, and these are the results:
- Detractors: 20 out of 200. So, (20/200) *100 = 10%
- Passives: 60 out of 200. So, 60/200 = 30%
- Promoters: 120 out of 200. So, 120/200 = 60%
With that data, we apply the formula:
NPS = Porcentaje de promotores (%) - Porcentaje de detractores (%)
Based on the example, that would be: NPS = 60% – 10% = 50%
An NPS of 50%.
2. Advantages of NPS
Knowing our customer satisfaction percentage is an excellent starting point for improving our business. It offers many advantages:
- It provides a clear, direct, and real indicator of how customers perceive our business/company.
- Based on the feedback received, we can take action to improve how customers perceive us.
- Running a survey takes almost no effort and is very cost-effective to implement.
- You can offer detractors a personal, satisfactory response to try to turn them into passives or even promoters.
- Using it over time lets you spot trends and effectively improve customer satisfaction.
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