How is NPS® Calculated?
Trying to work out the calculation to your Net Promoter Score® survey can seem a little daunting at first, but with the right explanation, tools and formulae, you’ll soon understand how to calculate this and get the answers you need.
What is a Net Promoter Score?
Essentially the NPS is a metric you can use to measure how happy customers are with your business.
It’s based on the idea that the key indicator of satisfaction with your company, product or service is how likely a customer will recommend a friend, family member, or colleague to use or purchase it.
The NPS survey question
The Net Promoter Score is built around asking your customers the following NPS survey question –
How likely is it that you would recommend [our company] [our product] [our service] to a friend or colleague?
– and getting them to rate their response on a scale of 1 to 10.
Based on their answers, respondents are then placed into three groups, with those providing a rating of between 1 and 6 labelled as “detractors”, those between 7 or 8 “neutral” and those answering 9 or 10 “promoters”.
Having identified your total number of promoters and detractors, the responses are then collated and calculated to provide the overall score.
Calculating your NPS
Your Net Promoter Score is calculated by working out the difference between the proportion of promoters and detractors, to generate a score of between -100 and 100.
How you calculate NPS will depend on the size of your data set, as there are number of approaches you can take:
A simple manual calculation:
You need to subtract the number of detractors from the number of promoters, which will leave you with a positive or negative number.
You then need to divide that answer by your total number of survey responses and multiply that by 100.
The number you get, rounded to the nearest whole number, should be between 100 and –100.
NPS excel formula:
For a larger data sets, which would be more time consuming to calculate manually you can work out your NPS with the following single spreadsheet formula:
Paste this into Excel or Google Sheets (or other spreadsheet), and just replace [Data] with the data range in your response spreadsheet that has the NPS answers in it.
Then simply run the formula and your score should appear right in front of you.
Net Promoter Score tool:
With more survey providers offering tools to work out your NPS, it’s becoming easier than ever to calculate. For our customers we’ve built a tool into our Net Promoter Score question that will collect data that’s automatically processed to show you the correct score via our reporting tools.
What is a good Net Promoter Score?
Technically any value above zero will represent a good NPS, since this implies that you have more promoters than detractors – with scores above 50 viewed as excellent and those above 70, outstanding and rare. However, given that there isn’t a universal standard for NPS, most companies will compare their scores to other businesses in their industry.
Advantages of Net Promoter Score
The comparative advantages that a healthy Net Promoter Score can bring to your business can be wide ranging, from helping to grow your customer base, to increasing the number of products and services that existing customers choose to buy from you.
A strong NPS translates into higher customer satisfaction
Whatever customer surveys you’re running, whether it’s a client satisfaction survey or a customer service questionnaire, collecting NPS data can be an extremely useful part of your strategy, enabling you to better track your customers overall contentment levels.
A great NPS example is provided by one of our case studies, which highlights the work that our client IKEA did to better engage and improve their customers’ satisfaction levels. Following the deployment of their strategy IKEA’s Net Promoter Score jumped from 25 to 70.
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NPS®, Net Promoter® & Net Promoter Score® are registered trademarks of Satmetrix Systems, Inc., Bain & Company and Fred Reichheld.