What is Net Promoter Score (NPS) Calculation?
When was the last time you liked a brand so much you recommended it to your friend and wanted them to try it out?
If you have ever done so, you understand the basic principle of Net Promoter Score (NPS), that it is used for measuring customer satisfaction.
NPS not only helps you measure customer satisfaction but also customer loyalty. It tests if someone likes your brand, organization, products or services that they recommend it to their family, friends, and colleagues.
How does the Net Promoter Score (NPS) Calculation Formula work?
To start with your the customers or consumers are asked to rate their chances to recommend an organization or a business to their family, friends or colleagues on a 0-10 point scale. The customer has to choose one number between 0-10 (where 0 is the lowest and 10 being the highest)
Based on the number chosen on the scale the customer is then classified as Detractors, Passives, and Promoters.
0-6 are Detractors (least likely to recommend your brand, in fact, might spread a negative word of mouth)
7-8 are Passives (May or may not recommend your brand, may even sway away to your competitors)
9-10 are Promoters (Loyal! They will absolutely recommend your brand)
Net Promoter Score (NPS) Calculation Example of Implementation
Nation wise Example:
Let take an example – Company X wants to know about their customer experience and customer loyalty among North and South American customers. They conduct Net Promoter Score surveys to a group of survey respondents in these regions.
In total, they receive 5000 responses from customers in North America and 1000 responses from customers in South America.
Let’s break down these responses.
You have received a total of 5000 responses (North America)
- 100 responses were in the 0–6 range (Detractors)
- 500 responses were in the 7–8 range (Passives)
- 4400 responses were in the 9–10 range (Promoters)
Using the NPS formula: 4400-100/5000 *100= 86
Net Promoter Score is always shown as a whole number and never as a percentage. Hence your NPS is 86.
You have received a total of 1000 responses (South America)
- 400 responses were in the 0–6 range (Detractors)
- 100 responses were in the 7–8 range (Passives)
- 500 responses were in the 9–10 range (Promoters)
Using the NPS formula: 500-400/1000 *100= 10
Net Promoter Score is always shown as a whole number and never as a percentage. Hence your NPS is 10.
From the calculation above it is evident that the organization needs to improve their customer service in South America as their NPS score is 10.
The same organization conducts Net Promoter Score surveys to a group of survey respondents in the six regions in North America where they have their stores.
They receive the responses and calculate their Net Promoter Score (NPS) using Net Promoter Score (NPS) formula. Following were the scores:
NPS for Region 1: 80
NPS for Region 2: 90
NPS for Region 3: 90
NPS for Region 4: 80
NPS for Region 5: 90
NPS for Region 6: 60
Clearly, from the NPS score region, 6 needs improvement in the customer service to get a higher NPS score.
Let’s assume that the same organization has 6 stores in the same city and they want to know the NPS score for all the stores and they send out a survey to a group of respondents and following are the results obtained applying the NPS formula:
NPS for Store 1: 80
NPS for Store 2: 90
NPS for Store 3: 60
NPS for Store 4: 90
NPS for Store 5: 80
Since the NPS score for store 3 is 60, therefore, they will need to improve their customer experience and customer satisfaction to improve their NPS score.
Net Promoter Score (NPS) calculation can be implemented at various levels as shown in the above examples.
How Net Promoter Score (NPS) calculation can be automated with QuestionPro
One of the key attributes of NPS calculation os to check how varying is it over a period of time. This requires graphical representation of the statistical data. The insights can be collected using NPS survey, with time as a variable.
The QuestionPro NPS Survey Dashboard is the most advanced analytics platform for NPS measurement. It provides real-time and detailed NPS Value charts and graphs as they vary over time.