On a scale of 0-10, how likely are you to share this article?
This would be my Net Promoter Score question for you.
These days a lot of the content we come across on the internet contains terms such as customer satisfaction, feedback, and Net Promoter Score.
But what exactly is Net Promoter Score, and how do you calculate it?
Well, let’s find out!
Defining Net Promoter Score
Developed by Fred Reichheld, Bain & Company, and Satmatrix in 2003, NPS is a tool to measure customer experience and loyalty. It involves asking the customer one simple question rated on a scale of 0-10. The question can be as simple as:
“How likely are you to recommend our service to a friend or colleague.”
As in my case “how likely are you to share this article”.
The aim is to measure the loyalty between a consumer and a producer.
NPS has proven itself to be the metric to measure customer experience, which is adopted by many major corporations around the world.
But, with all the theory aside, one question that arises is “how to calculate NPS?”
That’s what we are here to discuss. Let’s get started!
How to Calculate Net Promoter Score
Alright, so now that we know what NPS is, the next question that arises is - how do I calculate NPS Score? Calculating NPS involves three steps:
Create and send a survey
Categorize the responses
Calculate the NPS Score
Create NPS Surveys
NPS surveys are categorized by asking your customers a rating-based question and inquiring them why they gave that specific answer. This question can be sent out to customers in a number of ways: through an email survey, a website pop-up or a poll on social media.
Pro-Tip: Make sure you provide a numerical rating scale and a blank field for them to elaborate on their points.
If I think of a net promoter score calculation example, I’d think of the feedback survey followed by Uber. It’s easy, simple, and accurate!
After every ride, the mobile app asks you to rate the driver and also provide you with a dialog box to mention why you liked or disliked your driver. You can also give them “badges”, showcasing what the driver is really good at. A few badge examples are “6-Star Experience”, “Great Navigation”, “Excellent Conversationalist”, and so on.
Pro-Tip: You can create similar questions and surveys or alternatively use our NPS survey software to help you create and share your survey. Not only that, our tool plays the role of a NPS score calculator that helps you understand and get insight into your customers and how they see your brand.
Pssst... You can also include them in articles like these as well!
Categorize the Responses
Say you have created your survey and now shared it on any platform and have received 100 responses. NPS questions provide points with a range of 0-10 to rate customers. The responses received can be divided into three categories:
Promoters are your happy customers who give you a score of 9-10. These are your most loyal customers and will recommend your products to their family and friends without hesitation.
The customers who rate you 7 or 8 are your passives. While they are satisfied with your products and services, these customers can’t be trusted to be loyal at present. Given an opportunity, they will switch to your competitors instantly.
The customers who rate you between 0-6 are your detractors. They are your most dissatisfied customers and more likely to churn. They are responsible for most of the negative feedback that you receive and as such their concerns should be attended to as soon as possible.
Net Promoter Score Calculation: The Basics
So, how DO you calculate Net Promoter Score?
Calculating the NPS score is not just simply about getting an average number of loyal customers. It involves two main metrics for calculation:
Percentage of Loyals
Percentage of Detractors
Your NPS is decided by the difference between the percentages of loyal and detractors.
Let’s simplify this with an example.
If 20% of readers rate you 9-10 and around 15% rate you between 0-6, then your NPS score is 5 (20-15=5).
While the rating scale exists between 0-10, your NPS score can vary between -100 to 100, as it is decided by the percentage of loyal and detracting customers.
So, while a score of 5 would concern most people, you should not be worried about it.
The scores are classified as:
Danger Zone (-100 to 0):
This refers to scores that lie between -100 to 0. The number of detractors is far greater than the number of promoters and so your customer base is not loyal to you.
Good (0 to 50):
This refers to scores between 0-50. A company is said to have achieved its stakeholder satisfaction threshold if its scores lie between 20-40.
Excellent (50 to 75):
Scores that lie between 50-75 are considered excellent scores. It indicates a loyal customer based whose demands have been met.
World Class (75 to 100):
These are scores between 75-100. It signifies a world-class approach to customer satisfaction.
But what about the passives?
You probably had this question too, why are passives not part of the NPS equation. Simply because they are not influencers.
While they are happy with the business and the products they have zero influence over business growth and standards.
If they don’t impact business there’s no point in counting on them for measuring customer satisfaction levels.
NPS Calculation: Types
In total, there are three ways you can calculate a net promoter score. They are:
Online NPS Calculator
Steps to calculate net promoter score:
1.1. Search the web for an online NPS calculator
1.2. Open a calculator and add your NPS results in it
1.3. Click on the “Calculate” button & you’ll have the results!
Using an Excel or Spreadsheet
Steps to calculate net promoter score:
2.1. Add the promoters - respondents who scored 9 and 10
22. Add the detractors - those with responses 0 to 6 (included)
2.3. Calculate the percentage - Number of Promoters/Total Number of Respondents
2.4. Repeat the process for detractors
2.5. Calculate NPS using the net promoter score formula
NPS Survey Tool
An NPS survey tool does all the work for you. It analyzes the responses and calculates the NPS on its own. For example, in ProProfs Survey Maker, NPS calculation can be done by analyzing the response of the following question:
With the responses of such NPS questions, the NPS survey software calculates your score and gives you valuable insight, including:
The number of passives
The number of detractors
The number of promoters
Now that we know the basics of how to calculate the NPS score, let’s understand how to create the perfect net promoter survey. So, first things first:
Net Promoter Survey: How Should I Start?
Just as you create plans for customer acquisition or retention, it is essential to create a strategy for net promoter surveys too. In this blog post, I cover three important aspects to consider when creating an NPS survey strategy:
What’s Better: Transactional or Relationship Surveys?
Broadly, surveys can be categorized into relationship or transactional. Relationship surveys are those surveys that mainly calculate customer loyalty. On the other hand, transactional surveys analyze a customer’s experience before, during, and after making a transaction with a brand/company.
Pro-Tip: Start with relationship surveys and then brand out to transactional surveys. This gives you a detailed insight into both - your customers’ loyalty and organization’s transactions issues.
What’s the ideal length of an NPS?
When creating a net promoter survey, there are two crucial things you must remember:
Go beyond “how likely are you to recommend…” questions
Keep your questions short, crisp, and precise
Shorter the survey, customers are more likely to take a survey. With questions that require a detailed response, the possibility of customers not taking the survey increases as they see it as a waste of time and effort.
Pro-Tip: Keep the number of questions in the NPS survey between 3-5. Ideally, this number is enough to get valuable customer insight and NOT scare them away.
What should I ask?
Keep it simple. Yes, it is important to ask questions that give you all the answers, but what if you could ask questions that don’t require essays as answers? Here is an example that best explains what to ask in NPS surveys:
Thanks for rating our product/service. Please let us know how we can improve our services/products:
Range of Products/Services
Pro-Tip: Ensure all points have accurate and significant touchpoints. This way, you can pinpoint the main difficulty faced by your customers and improve upon it quickly.
After understanding how to create the perfect survey, it is also important to understand the importance of your NPS score.
Why is Net Promoter Score Important?
You can analyze your net promoter score to gain a lot of insight into your customers. A few advantages of calculating NPS score include:
Getting Insight Into Customer Satisfaction
One of the most important aspects an NPS score makes you understand is your current customer satisfaction rate. If you have a high NPS score, it means that your brand/company has happy, delighted customers.
Another thing NPS scores gives you an idea of customer perception of your brand.
Customer Opinion Trends Analysis
Your NPS score also lets you understand how your customer perception is changing. Is it a positive or negative outlook? If your NPS is increasing at a steady rate, your company is successful in keeping the customers happy. But, if it’s the other way round, there is something wrong and your customers aren’t happy with your company.
So, NPS surveys give you a way to analyze and calculate customer opinion trends, ensuring they stay happy and delighted in the long run.
NPS Score Calculation: Do it Right By Deploying an NPS Tool!
It’s always more expensive to acquire a new customer than to retain an existing one. Having said that, calculating the NPS score and evaluating NPS responses are two very different things. These two actions combined allow you to identify these detractors and by acting on their feedback you can turn them into loyal.
Keep conducting regular NPS surveys (for that, have a robust survey maker in your arsenal) and set a benchmark for yourself to improve upon.
I'll leave you with the question I began with. On a scale of 0-10, how likely are you to share this article?
Do provide your feedback!
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