Understanding Net Promoter Score Calculation

When it comes to measuring customer satisfaction, the Net Promoter Score (NPS) has remained a tried and true metric for many years. Used within  a number of industries, an NPS survey asks a simple one phrase question, that provides constructive feedback and an understanding of overall sentiment, using a scale from 1 to 10.

With the continued and growing adoption of NPS, it’s become more and more important for businesses to know how to effectively implement it. This is why in this article, we’re sharing how you can easily calculate your Net Promoter Score and use the received data to drive continued success.

Article Preface

If a Net Promoter Score is something completely new to you or your business, we’d like to preface this article by suggesting two previous, and more granular, NPS articles that we’ve written, The Elements of a Successful Net Promoter Score and How To Improve Your NPS Survey Response Rates. In these articles, we break down the definition of an NPS, best practices, and the massive benefits you can achieve through its adoption. In other words, they’re a great introduction to NPS.

The Net Promoter Score Hierarchy

When it comes to measuring NPS scores, there’s a certain hierarchy that needs to be taken into account.

The Net Promoter Score, as mentioned above, starts with a single phrase question;

“How likely are you to recommend [Insert Brand Name] to a friend or colleague?”

From this question, customers have the opportunity to rate their response on a scale of 1 to 10. 1 equating to “very unlikely to recommend” and 10 equating to “very likely to recommend”. From each rating, respondents then get placed into a hierarchy of; “Promoter”, “Passive” and “Detractor”. For visibility purposes, the hierarchy and the scale at which the respondents are grouped as, are as follows;

0 – 6: Detractors

7 – 8: Passives

9-10: Promoters

The goal for each business is to retain more Promoters and fewer Detractors. Promoters being customers who actively refer other customers and are responsible for business growth. Detractors being customers who will most likely not recommend the business, service, or product and can hinder growth.

How To Calculate The Net Promoter Score

While an NPS survey provides you with each respondent’s answer,  gathering a more holistic view of the responses might be more appealing for a business in order to create strategies and inform internal stakeholders. Although going the traditional route of adding up all respondent numbers and then dividing by how many respondents there are might seem obvious, uncovering a holistic NPS is a little more complex than this simple calculation.

The first step to calculating the average percentage is grouping all participants into their respective category; “Promoter”, “Passive”, and “Detractor” using the aforementioned hierarchy. Then add up the total respondents for each.

To get the overarching percentage you then take each group total and divide it by the total number of respondents for that group. Once that is complete, you then subtract the percentage total of “Detractors” from the percentage of “Promoters”. The number you receive is your Net Promoter Score.

In its equation form, your calculation should look something like this:

(Promoters — Detractors) / Total Respondents) x 100

Although it might seem confusing at first glance, the more you practice through implementation, the easier and more routine it gets.

How To Use Net Promoter Score Data

Once you’ve received your data from the Net Promoter Score, it’s time to take action and benchmark against competitors. Look at the average score you have and how it compares to others in the market, if you’re 40% below the average, it might be time to take a deep dive into business functionalities and customer experience efforts. Knowing where you stand amongst competitors can push you towards developing an even better customer experience.

Net Promoter Score data can also serve as a great motivator for employees. In a workplace setting, you can broadcast your average NPS every time you conduct the survey – so employees always know how well they’re performing. If they’re visibly behind, it’s a great push to make them do better, and if they’re already doing well, it’s a great opportunity to recognize and reward.

Lastly, Net Promoter Score data can also be used to perfect your offerings, whether it be a product or service. When it comes to satisfaction, there are multiple factors that can contribute to how a customer feels – which is why it is so important to ask multiple questions alongside your NPS, such as a CSAT. If a customer rates the establishment low, you can probe them for more insight on why they did so. If the quality of product or service is at the forefront, it gives you an opportunity to improve.

How To Go The Extra Mile With NPS

If you’re looking to really go the extra mile and gain a true competitive advantage, we would highly suggest sending out and measuring your Net Promoter Score surveys through a Customer Experience Management Solution. With a CEM, you can send out your NPS at critical touch points along the customer journey. Further, it allows you to automate the sending process so you can reach out immediately after a customer’s experience or after a few days – making sure you optimize your response rates.

A CEM can also aid your efforts by providing you with the opportunity to reach out to customers on the channel of their choice, such as WhatsApp, Facebook, Email, or SMS. Not to mention, ideal CEM’s can help you incorporate more questions to use adjacent to your NPS, so that you receive more granular data and can more easily pinpoint areas for improvement.

Lastly, a CEM can aid your Net Promoter Score efforts by providing reporting and analytics on your NPS respondents. Whether you’re looking to identify trends or understand the customers preferred channel, a CEM can help decipher your NPS and use the data towards propelling your business.

Conclusion

When it comes to a Net Promoter Score survey, how you calculate and use the data is monumental in the results you produce. By adopting our noted calculation method, along with tips to using the data, you can ensure you’re taking the proper steps to achieve your Net Promoter Score goals.

 

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