How do you calculate NPS?
The NPS (Net Promoter Score) calculation is a mathematical equation which takes the percentage of customers rating your business highly versus those that do not think very highly of your business. By taking these promoters and comparing them to your detractors a business can see, in a simplified score, whether they are satisfying their customer base, or failing them.
The NPS score is used by businesses across the globe to give a snapshot of business performance. Many Fortune 500 companies use this calculation and a raft of software solutions as a service (SaaS) applications exist to help you measure your NPS score.
If you're interested in using the Net Promoter Score system but don't know where to begin then we've got you covered. From the basics to the calculation itself we guide you along the process of creating an NPS system and understanding your scores.
What is the Net Promoter Score question?
“On a scale of 1-10, with 1 being not at all likely and 10 being highly likely, how likely are you to recommend our business to a friend or colleague?”
The NPS question is presented and the respondent selects a number from 1 to 10 to represent how likely they are to recommend your business to another based on their experience with you. The simplicity of the focal question in NPS has led to criticism of the metric but is designed to propose one single defining statement that encapsulates the entirety of the business’s operations. From customer services, product satisfaction, marketing and branding everything is encapsulated within this one question.
How to calculate your NPS score
Once you have your responses to the question above you will need to divide your responses into three buckets.
- Promoters - scores of 9 or 10
- Passives - scores of 7 or 8
- Detractors - score of 6 or below
The NPS calculation for working out your net promoter score is:
Total number of promoters ➖ Total number of detractors ➗ Total number of responses ✖️ 100
A more traditional expression of the calculation is:
NPS Score = (Total promoters - Total detractors)/(Total responses)X100
What is a good Net Promoter Score?
The NPS score goes up to 100 and down to -100. Any score in the positive side of the scale (above 0) will show that you have more promoters than detractors. Bain & Co, the creators of the NPS scoring system state that scores over 20 are favourable while scores over 50 are excellent and scores over 80 are world-class.
Forrester conducted a multi-industry report into NPS scores and found noticeable differences from some industries to others. From the low 30s for luxury automotive brands to hotels in the low 20s. For the full report and scores for 260 companies you are able to purchase the full document here.
Is there software to collect and measure NPS scores?
There are a plethora of options on the market. All license the use of the NPS calculation as Bain & Co are the inventors of the system so to use it for monetary gain (like these software companies) you need to purchase a license from the inventors. The top software companies out there offering NPS measurement services are:
We’d recommend looking into fellow Kiwis AskNicely because those of us down at the bottom of the planet need to stick together.
Review Tui isn’t on this list; because we don’t use NPS. In fact, we really don’t like it as a business metric. So why write so much about something we don’t like? Well, if you’re here reading this we hope you’re also interested in learning more about why we really don’t like NPS as a satisfaction metric.
It’s our view that NPS is an oversimplification of a very complicated process. Someone scoring you 9 out of 10 might be labelled as a ‘promoter’ but why did they give you that score and are they likely to actually recommend someone do business with you? With NPS you simply don’t know. Your score can go up and go down but are you any closer towards understanding why your score has changed?
We created Review Tui as a tool for businesses to get to the heart of what they’re doing right, and wrong, and turn the happy customers into real promoters while winning back detractors. Rather than simply show a score we show businesses the road they need to take to wow customers at every opportunity.
Create full surveys to discover friction points and ‘wow’ moments. Direct people to them using custom links so you can find locations that consistently amaze their customers or parts of your business that need improvement. Manage your Google reviews and Review Tui feedback within the one platform so you can effectively manage. You can easily share positive feedback to social channels to grow your business and the handy dashboard shows how well your business is performing at a glance.
And all of this without NPS. because we believe that the only answer to the question “how likely are you to recommend us..” is if the person actually recommended you.
Be the first to be notified of the public release of Review Tui in the coming months by clicking the button below.