NPS, or Net Promoter Score, is a customer loyalty metric that measures the likelihood of a customer recommending your business to a friend or colleague. It is calculated by subtracting the percentage of detractors (customers who are unlikely to recommend your business) from the percentage of promoters (customers who are very likely to recommend your business).
To calculate NPS, follow these steps:
Once you have collected your data, you can calculate NPS using the following formula:
how is nps calculated
Here are 8 important points about how NPS is calculated:
- Survey customers
- Ask about likelihood to recommend
- Categorize customers as promoters, passives, detractors
- Calculate percentage of each group
- Subtract detractors from promoters
- Multiply by 100
- Result is NPS
- Higher NPS is better
NPS is a valuable metric for businesses to track customer loyalty and improve customer experience.
Survey customers
The first step in calculating NPS is to survey your customers. You can do this through a variety of methods, such as online surveys, email surveys, or phone surveys. The most important thing is to make sure that your survey is designed to accurately measure customer loyalty.
When designing your survey, there are a few things you need to keep in mind:
- Keep it short and simple. Customers are more likely to complete a survey if it is short and easy to understand.
- Use clear and concise language. Avoid using jargon or technical terms that customers may not understand.
- Ask the right questions. The most important question to ask is "How likely are you to recommend our business to a friend or colleague?" You can also ask additional questions to gather more insights into customer loyalty, such as "What are your favorite things about our business?" and "What are some areas where we can improve?"
Once you have designed your survey, you need to distribute it to your customers. You can do this through a variety of methods, such as email, social media, or your website. You can also incentivize customers to complete the survey by offering a discount or other reward.
Once you have collected your survey data, you can start to analyze it to calculate NPS.
The next step is to categorize your customers into three groups: promoters, passives, and detractors.
Ask about likelihood to recommend
The most important question to ask in your NPS survey is "How likely are you to recommend our business to a friend or colleague?" This question is designed to measure customer loyalty and identify promoters, passives, and detractors.
Customers who answer 9 or 10 are considered promoters. These are your most loyal customers who are highly likely to recommend your business to others. They are also more likely to be repeat customers and spend more money with your business.
Customers who answer 7 or 8 are considered passives. These customers are satisfied with your business, but they are not as enthusiastic as promoters. They may or may not recommend your business to others, depending on their experience.
Customers who answer 0 to 6 are considered detractors. These customers are unhappy with your business and are unlikely to recommend it to others. They may even actively discourage others from doing business with you.
The key to calculating NPS is to focus on the promoters and detractors. Promoters are your most valuable customers, while detractors can damage your reputation and drive away potential customers.
By asking customers how likely they are to recommend your business, you can identify your promoters and detractors and take steps to improve customer loyalty.
Once you have categorized your customers, you can calculate NPS by subtracting the percentage of detractors from the percentage of promoters.
Categorize customers as promoters, passives, detractors
Once you have collected your survey data, you need to categorize your customers into three groups: promoters, passives, and detractors.
Promoters are customers who are very likely to recommend your business to others. They are your most loyal customers and are more likely to be repeat customers and spend more money with your business.
Passives are customers who are satisfied with your business, but they are not as enthusiastic as promoters. They may or may not recommend your business to others, depending on their experience.
Detractors are customers who are unhappy with your business and are unlikely to recommend it to others. They may even actively discourage others from doing business with you.
To categorize your customers, you can use the following scale:
- Promoters: 9-10
- Passives: 7-8
- Detractors: 0-6
Once you have categorized your customers, you can calculate NPS by subtracting the percentage of detractors from the percentage of promoters.
For example, if you have 100 customers and 40 of them are promoters, 30 are passives, and 30 are detractors, your NPS would be 10 (40 - 30).
Calculate percentage of each group
Once you have categorized your customers into promoters, passives, and detractors, you need to calculate the percentage of each group.
- Promoters: To calculate the percentage of promoters, divide the number of promoters by the total number of customers and multiply by 100.
- Passives: To calculate the percentage of passives, divide the number of passives by the total number of customers and multiply by 100.
- Detractors: To calculate the percentage of detractors, divide the number of detractors by the total number of customers and multiply by 100.
For example, if you have 100 customers and 40 of them are promoters, 30 are passives, and 30 are detractors, your percentages would be:
- Promoters: 40 / 100 * 100 = 40%
- Passives: 30 / 100 * 100 = 30%
- Detractors: 30 / 100 * 100 = 30%
Subtract detractors from promoters
Once you have calculated the percentage of promoters and detractors, you need to subtract the percentage of detractors from the percentage of promoters.
- NPS: To calculate NPS, use the following formula: NPS = % Promoters - % Detractors
For example, if you have 40% promoters and 30% detractors, your NPS would be 10 (40 - 30).
NPS can range from -100 to 100.
- NPS > 0: This indicates that you have more promoters than detractors. This is a good sign and means that your customers are generally satisfied with your business.
- NPS = 0: This indicates that you have the same number of promoters and detractors. This is a neutral score and means that you need to work on improving customer satisfaction.
- NPS < 0: This indicates that you have more detractors than promoters. This is a bad sign and means that you need to take immediate action to improve customer satisfaction.
Multiply by 100
Once you have subtracted the percentage of detractors from the percentage of promoters, you need to multiply the result by 100 to get your NPS score.
- NPS: To calculate NPS, use the following formula: NPS = (% Promoters - % Detractors) x 100
For example, if you have 40% promoters and 30% detractors, your NPS would be 10 ((40 - 30) x 100).
NPS can range from -100 to 100.
- NPS > 0: This indicates that you have more promoters than detractors. This is a good sign and means that your customers are generally satisfied with your business.
- NPS = 0: This indicates that you have the same number of promoters and detractors. This is a neutral score and means that you need to work on improving customer satisfaction.
- NPS < 0: This indicates that you have more detractors than promoters. This is a bad sign and means that you need to take immediate action to improve customer satisfaction.
Result is NPS
The result of the NPS calculation is a score that ranges from -100 to 100. A score of 0 indicates that you have the same number of promoters and detractors, a score greater than 0 indicates that you have more promoters than detractors, and a score less than 0 indicates that you have more detractors than promoters.
NPS is a valuable metric for businesses to track customer loyalty and improve customer experience. It can be used to identify areas where a business can improve its customer service, products, or marketing.
Here are some tips for improving your NPS:
- Focus on customer satisfaction. The most important thing you can do to improve your NPS is to focus on customer satisfaction. This means providing excellent customer service, offering high-quality products or services, and resolving customer complaints quickly and efficiently.
- Ask for feedback. Regularly ask your customers for feedback on their experience with your business. This can be done through surveys, email campaigns, or social media. Use this feedback to identify areas where you can improve.
- Take action to improve. Once you have identified areas where you can improve, take action to make those improvements. This could involve improving your customer service, launching new products or services, or refining your marketing strategy.
- Track your NPS over time. Track your NPS score over time to see how it is changing. This will help you to identify trends and make adjustments to your business strategy as needed.
NPS is a powerful tool that can be used to improve customer loyalty and grow your business. By following these tips, you can improve your NPS and create a more loyal customer base.
Higher NPS is better
A higher NPS is generally better for a business. This is because promoters are more likely to be loyal customers who will continue to do business with you and recommend your business to others. Detractors, on the other hand, are more likely to churn and discourage others from doing business with you.
There are a number of benefits to having a high NPS, including:
- Increased customer loyalty: Promoters are more likely to be loyal customers who will continue to do business with you.
- Increased sales: Promoters are more likely to recommend your business to others, which can lead to increased sales.
- Reduced churn: Promoters are less likely to churn, which can save you money on marketing and customer acquisition costs.
- Improved reputation: A high NPS can help to improve your business's reputation and make it more attractive to potential customers.
There are a number of things that businesses can do to improve their NPS, including:
- Focus on customer satisfaction: The most important thing you can do to improve your NPS is to focus on customer satisfaction. This means providing excellent customer service, offering high-quality products or services, and resolving customer complaints quickly and efficiently.
- Ask for feedback: Regularly ask your customers for feedback on their experience with your business. This can be done through surveys, email campaigns, or social media. Use this feedback to identify areas where you can improve.
- Take action to improve: Once you have identified areas where you can improve, take action to make those improvements. This could involve improving your customer service, launching new products or services, or refining your marketing strategy.
- Track your NPS over time: Track your NPS score over time to see how it is changing. This will help you to identify trends and make adjustments to your business strategy as needed.
By following these tips, businesses can improve their NPS and create a more loyal customer base.
FAQ
Here are some frequently asked questions about the NPS calculator:
Question 1: What is the NPS calculator?
Answer 1: The NPS calculator is a tool that helps you to calculate your Net Promoter Score (NPS). NPS is a metric that measures customer loyalty and is calculated by subtracting the percentage of detractors (customers who are unlikely to recommend your business) from the percentage of promoters (customers who are very likely to recommend your business).
Question 2: How do I use the NPS calculator?
Answer 2: To use the NPS calculator, you will need to collect data from your customers. This can be done through surveys, email campaigns, or social media. Once you have collected your data, you can enter it into the NPS calculator and it will automatically calculate your NPS score.
Question 3: What is a good NPS score?
Answer 3: A good NPS score is typically considered to be anything above 0. A score of 0 indicates that you have the same number of promoters and detractors, a score greater than 0 indicates that you have more promoters than detractors, and a score less than 0 indicates that you have more detractors than promoters.
Question 4: How can I improve my NPS score?
Answer 4: There are a number of things you can do to improve your NPS score, including focusing on customer satisfaction, asking for feedback, taking action to improve, and tracking your NPS over time.
Question 5: What are some tips for using the NPS calculator?
Answer 5: Here are some tips for using the NPS calculator:
- Make sure you are collecting data from a representative sample of your customers.
- Use a clear and concise survey that is easy for customers to understand.
- Offer incentives to customers to complete your survey.
- Track your NPS score over time to see how it is changing.
Question 6: Where can I find more information about NPS?
Answer 6: You can find more information about NPS on the website of the Net Promoter System.
The NPS calculator is a valuable tool that can help you to measure customer loyalty and improve customer experience.
Here are some additional tips for using the NPS calculator to improve your customer loyalty:
Tips
Here are some additional tips for using the NPS calculator to improve your customer loyalty:
Tip 1: Use the NPS calculator regularly.
NPS is a dynamic metric that can change over time. It is important to track your NPS score regularly so that you can identify trends and make adjustments to your business strategy as needed.
Tip 2: Benchmark your NPS score against your competitors.
Benchmarking your NPS score against your competitors can help you to identify areas where you need to improve. You can find industry benchmarks for NPS on the website of the Net Promoter System.
Tip 3: Use the NPS calculator to identify your promoters and detractors.
The NPS calculator can help you to identify your promoters and detractors. This information can be used to target your marketing and customer service efforts.
Tip 4: Close the loop with your detractors.
When you identify a detractor, it is important to reach out to them and try to understand why they are unhappy. This shows that you value their feedback and are committed to improving their experience.
By following these tips, you can use the NPS calculator to improve your customer loyalty and grow your business.
The NPS calculator is a valuable tool that can help you to measure customer loyalty and improve customer experience. By following the tips in this article, you can use the NPS calculator to create a more loyal customer base and grow your business.
Conclusion
The NPS calculator is a valuable tool that can help you to measure customer loyalty and improve customer experience. By following the tips in this article, you can use the NPS calculator to create a more loyal customer base and grow your business.
Here is a summary of the main points:
- NPS is a metric that measures customer loyalty and is calculated by subtracting the percentage of detractors from the percentage of promoters.
- A higher NPS is generally better for a business because promoters are more likely to be loyal customers who will continue to do business with you and recommend your business to others.
- There are a number of things you can do to improve your NPS, including focusing on customer satisfaction, asking for feedback, taking action to improve, and tracking your NPS over time.
- The NPS calculator can help you to identify your promoters and detractors, benchmark your NPS score against your competitors, and close the loop with your detractors.
By using the NPS calculator and following the tips in this article, you can create a more loyal customer base and grow your business.
Remember, customer loyalty is key to the success of any business. By focusing on customer satisfaction and using the NPS calculator to track and improve your NPS score, you can create a business that customers love.