Net Promoter Score (NPS) is a widely used metric for measuring customer satisfaction and loyalty. It is calculated based on customers' responses to a simple question: "How likely are you to recommend our product/service to a friend or colleague?" Customers are asked to rate their likelihood on a scale of 0 to 10, with 0 being "not at all likely" and 10 being "extremely likely."
NPS is a valuable tool for businesses because it provides actionable insights into customer satisfaction. A high NPS score indicates that customers are satisfied with your product/service and are likely to recommend it to others, while a low NPS score indicates that customers are dissatisfied and may be more likely to churn. NPS can also be used to track customer satisfaction over time and identify areas where improvements need to be made.
Calculating NPS is a straightforward process, but there are a few things you need to keep in mind. In this comprehensive guide, we'll walk you through the steps involved in calculating NPS and provide tips for getting the most out of this valuable metric.
how to calculate nps
Calculating NPS involves several key steps. Here are 8 important points to keep in mind:
- Ask the right question.
- Use a 0-10 scale.
- Collect responses.
- Calculate NPS.
- Interpret results.
- Track NPS over time.
- Take action.
- Use NPS as a benchmark.
By following these steps, you can accurately calculate NPS and gain valuable insights into customer satisfaction.
Ask the right question.
The first step in calculating NPS is to ask the right question. The question should be simple, clear, and easy for customers to understand. It should also be relevant to your product/service and the customer's experience.
- Use a simple question.
The question should be easy for customers to understand and answer. Avoid using jargon or technical terms that customers may not be familiar with.
- Make it specific.
The question should be specific to your product/service and the customer's experience. Avoid general questions that could apply to any product/service.
- Keep it short.
The question should be short and to the point. Customers are more likely to answer a short question than a long one.
- Use a 0-10 scale.
The question should use a 0-10 scale, with 0 being "not at all likely" and 10 being "extremely likely." This scale is easy for customers to understand and provides you with a quantitative measure of their satisfaction.
By following these tips, you can ensure that you are asking the right question and getting meaningful feedback from your customers.
Use a 0-10 scale.
Using a 0-10 scale for your NPS question has several advantages:
- It is easy for customers to understand.
The 0-10 scale is a familiar and intuitive way for customers to rate their satisfaction. They simply need to choose a number from 0 to 10, with 0 being "not at all likely" and 10 being "extremely likely." - It provides a quantitative measure of customer satisfaction.
The 0-10 scale allows you to quantify customer satisfaction. This makes it easier to track NPS over time and compare it to other metrics, such as customer churn and revenue. - It is a widely used standard.
The 0-10 scale is the most commonly used scale for NPS. This means that you can easily compare your NPS score to the scores of other businesses in your industry.
Here are some additional tips for using a 0-10 scale for your NPS question:
- Make sure the scale is clearly labeled.
The scale should be labeled with the numbers 0 to 10, as well as descriptors for each number (e.g., "not at all likely," "somewhat likely," "extremely likely"). - Use a consistent scale.
Use the same scale for all of your NPS surveys. This will make it easier to track NPS over time and compare it to other metrics. - Avoid using decimals.
Decimals can make the scale more difficult for customers to understand. Stick to whole numbers from 0 to 10.
By following these tips, you can ensure that you are using the 0-10 scale effectively to measure customer satisfaction.
Once you have collected NPS responses from your customers, you can calculate your NPS score using the following formula:
NPS = % of Promoters - % of Detractors
Promoters are customers who gave a score of 9 or 10, while detractors are customers who gave a score of 0 to 6. Customers who gave a score of 7 or 8 are considered passives.
Collect responses.
Once you have designed your NPS survey, you need to collect responses from your customers. There are a few different ways to do this:
- Email survey.
You can send an email survey to your customers with a link to the survey. This is a quick and easy way to collect responses, but it may not be suitable for all businesses.
- Website survey.
You can add an NPS survey to your website. This allows customers to provide feedback while they are still on your site. However, website surveys may have a lower response rate than email surveys.
- In-app survey.
If you have a mobile app, you can add an NPS survey to the app. This allows customers to provide feedback while they are using your app. However, in-app surveys may only be suitable for certain types of businesses.
- Phone survey.
You can call your customers and ask them the NPS question over the phone. This is a more personal way to collect feedback, but it can also be more time-consuming.
No matter which method you choose, it is important to make sure that your survey is easy for customers to complete. Keep the survey short and to the point, and make sure the questions are clear and easy to understand.
You should also consider sending a reminder email or notification to customers who have not yet completed the survey. This can help to increase your response rate.
Calculate NPS.
Once you have collected responses from your customers, you can calculate your NPS score. To do this, you need to follow these steps:
- Categorize customers into promoters, passives, and detractors.
Promoters are customers who gave a score of 9 or 10, passives are customers who gave a score of 7 or 8, and detractors are customers who gave a score of 0 to 6.
- Calculate the percentage of promoters and detractors.
To do this, divide the number of promoters by the total number of responses and multiply by 100. Then, divide the number of detractors by the total number of responses and multiply by 100.
- Subtract the percentage of detractors from the percentage of promoters.
This will give you your NPS score.
For example, if you have 100 responses and 40 promoters, 30 passives, and 30 detractors, your NPS score would be calculated as follows:
- Percentage of promoters = 40 / 100 * 100 = 40%
- Percentage of detractors = 30 / 100 * 100 = 30%
- NPS score = 40% - 30% = 10%
In this example, the NPS score is 10%, which is considered to be a good score.
Interpret results.
Once you have calculated your NPS score, you need to interpret the results. Here are a few things to keep in mind:
- A high NPS score indicates that customers are satisfied with your product/service and are likely to recommend it to others.
- A low NPS score indicates that customers are dissatisfied with your product/service and are unlikely to recommend it to others.
- The average NPS score varies by industry. It is important to compare your NPS score to the average score for your industry.
- NPS is a relative metric. It is more important to track your NPS score over time and compare it to your previous scores than it is to focus on a single NPS score.
Here are some general guidelines for interpreting NPS scores:
- NPS score above 70: Excellent
- NPS score between 50 and 70: Good
- NPS score between 0 and 50: Needs improvement
- NPS score below 0: Poor
It is important to note that NPS is just one metric of customer satisfaction. You should also consider other metrics, such as customer churn and revenue, when evaluating the overall health of your business.
Once you have interpreted your NPS score, you can start to take action to improve it. If your NPS score is low, you should focus on identifying and addressing the root causes of customer dissatisfaction. You can do this by analyzing customer feedback and taking steps to improve your product/service and customer experience.
Track NPS over time.
It is important to track your NPS score over time to see how it is changing. This will help you to identify trends and patterns, and to measure the impact of changes you make to your product/service or customer experience.
- Set a benchmark.
Before you start tracking your NPS score, you need to set a benchmark. This is the score that you want to achieve and maintain.
- Track your NPS score regularly.
You should track your NPS score at least once a quarter. This will give you enough data to identify trends and patterns.
- Compare your NPS score to your benchmark.
Once you have tracked your NPS score for a period of time, you can compare it to your benchmark. This will help you to see how you are progressing and whether you need to make any changes.
- Identify trends and patterns.
As you track your NPS score over time, you may start to notice trends and patterns. For example, you may see that your NPS score increases during certain times of the year or that it decreases after you make a major change to your product/service.
By tracking your NPS score over time, you can identify areas where you need to improve and measure the impact of changes you make. This will help you to improve customer satisfaction and loyalty.
Take action.
Once you have calculated your NPS score and interpreted the results, you need to take action to improve it. Here are a few things you can do:
- Identify the root causes of customer dissatisfaction.
Use customer feedback and other data to identify the root causes of customer dissatisfaction. This could include issues with your product/service, customer service, or pricing.
- Take steps to address the root causes of customer dissatisfaction.
Once you have identified the root causes of customer dissatisfaction, you need to take steps to address them. This could involve improving your product/service, customer service, or pricing.
- Monitor your NPS score to see how it is changing.
After you have taken steps to address the root causes of customer dissatisfaction, you need to monitor your NPS score to see how it is changing. This will help you to measure the impact of the changes you have made.
- Make adjustments as needed.
If you find that your NPS score is not improving, you may need to make adjustments to your plan. This could involve changing your approach to addressing the root causes of customer dissatisfaction or trying new strategies to improve customer satisfaction.
By taking action to improve your NPS score, you can improve customer satisfaction and loyalty. This can lead to increased sales, revenue, and profitability.
Use NPS as a benchmark.
NPS can be used as a benchmark to compare your customer satisfaction levels to those of your competitors. This can help you to identify areas where you need to improve.
- Find your industry's average NPS score.
There are a number of resources available that can provide you with the average NPS score for your industry. Once you know the average score, you can compare your score to it to see how you stack up.
- Compare your NPS score to your competitors' scores.
If you know the NPS scores of your competitors, you can compare your score to theirs to see how you are doing. This can help you to identify areas where you need to improve.
- Use NPS to track your progress over time.
NPS can be used to track your progress in improving customer satisfaction over time. By tracking your NPS score regularly, you can see how your score is changing and identify areas where you need to focus your efforts.
Using NPS as a benchmark can help you to improve customer satisfaction and stay ahead of your competitors.
NPS is a valuable tool for businesses of all sizes. By following the steps outlined in this article, you can calculate your NPS score, interpret the results, and take action to improve customer satisfaction. By using NPS as a benchmark, you can also track your progress over time and compare your score to the scores of your competitors.
FAQ
Here are some frequently asked questions about NPS calculators:
Question 1: What is an NPS calculator?
Answer 1: An NPS calculator is a tool that helps you to calculate your Net Promoter Score (NPS). NPS is a metric that measures customer satisfaction and loyalty.
Question 2: How does an NPS calculator work?
Answer 2: An NPS calculator typically asks you to enter the number of promoters, passives, and detractors in your customer base. It then uses this information to calculate your NPS score.
Question 3: What is a good NPS score?
Answer 3: A good NPS score varies depending on the industry. However, a score of 30 or higher is generally considered to be good.
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, such as improving your product or service, providing better customer service, and listening to customer feedback.
Question 5: Where can I find an NPS calculator?
Answer 5: There are a number of free NPS calculators available online. You can also find NPS calculators in some customer relationship management (CRM) software.
Question 6: How often should I calculate my NPS?
Answer 6: It is recommended to calculate your NPS score at least once a year. However, you may want to calculate it more frequently, such as quarterly or monthly, if you are making changes to your product or service or if you are experiencing changes in customer feedback.
Question 7: What are the benefits of using an NPS calculator?
Answer 7: Using an NPS calculator can help you to:
- Measure customer satisfaction and loyalty
- Identify areas where you need to improve
- Track your progress over time
- Compare your score to the scores of your competitors
Closing Paragraph for FAQ:
NPS calculators are a valuable tool for businesses of all sizes. By using an NPS calculator, you can gain valuable insights into customer satisfaction and loyalty. This information can help you to improve your product or service, provide better customer service, and increase sales.
In addition to using an NPS calculator, there are a number of other things you can do to improve customer satisfaction and loyalty. Some tips include:
Tips
Here are four tips for using an NPS calculator effectively:
Tip 1: Use the right NPS calculator.
There are a number of different NPS calculators available online. Choose one that is easy to use and that provides the features you need. Some calculators allow you to enter custom questions, while others only allow you to use the standard NPS question.
Tip 2: Collect accurate data.
The accuracy of your NPS score depends on the accuracy of the data you collect. Make sure that you are collecting data from a representative sample of your customers. You should also make sure that the data is collected in a consistent manner.
Tip 3: Track your NPS score over time.
NPS is a metric that should be tracked over time. This will allow you to see how your score is changing and identify trends. You can use your NPS score to track the impact of changes you make to your product or service or to your customer service.
Tip 4: Use NPS to improve customer satisfaction.
NPS is a valuable tool for identifying areas where you can improve customer satisfaction. By listening to customer feedback and taking action to address their concerns, you can improve your NPS score and increase customer loyalty.
Closing Paragraph for Tips:
By following these tips, you can use an NPS calculator to gain valuable insights into customer satisfaction and loyalty. This information can help you to improve your product or service, provide better customer service, and increase sales.
NPS is a valuable metric for businesses of all sizes. By following the tips in this article, you can use an NPS calculator to improve customer satisfaction and loyalty.
Conclusion
NPS calculators are a valuable tool for businesses of all sizes. By using an NPS calculator, you can gain valuable insights into customer satisfaction and loyalty. This information can help you to improve your product or service, provide better customer service, and increase sales.
In this article, we have discussed the following main points:
- What is an NPS calculator and how does it work?
- How to use an NPS calculator effectively
- Tips for improving your NPS score
By following the tips in this article, you can use an NPS calculator to improve customer satisfaction and loyalty. This can lead to increased sales, revenue, and profitability.
Closing Message:
Customer satisfaction is essential for the success of any business. By using an NPS calculator to track and improve customer satisfaction, you can build a loyal customer base that will drive your business forward.