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What are NPS Scores and How do I calculate it?

A Sales Growth Company
March 16, 2024

I’m guessing if you’ve stumbled here, you’ve had the same question I’ve had – what the heck is an NPS score? You’re clearly not alone. This is hopefully the quick and dirty guide to what they are, why they’re important, how to calculate NPS scores, and how to make them actionable.

 

What are Net Promoter Scores?

NPS (Net Promoter Score) measures the likelihood that a customer will recommend your company or product to others. It’s intended to be a high-level pulse check on customer sentiment and loyalty, giving you a sense of where you stand with your customers.

 

Origin of NPS Scores

Introduced by Fred Reichheld, a partner with Bain & Company, in 2003. Meant as a simple, digestible, and actionable number for companies to summarize customer’s feelings, it has now become a standard for benchmarking.

 

How do you calculate NPS Scores?

Calculating your NPS score is simple, if you have the right information. It all hinges on one question: “On a scale from 1-10, how likely are you to recommend our product/company to a friend or colleague?”

 

Understand your NPS Range

The percentage of promoters minus the percentage of detractors is your NPS score.

Based on the responses and calculations, your score will range from -100 to 100. It is possible, yet highly, highly unlikely to have a perfect 100 or -100.

 

Here’s what the scores signify:

Below 0: Indicative of poor customer loyalty; immediate improvement is needed.

0-30: Good – could be room for growth, but overall, more people would recommend your product to a friend than would bad mouth you.

31-60: Great – your customers are happy and likely to recommend your product

Above 61 – Excellent – you’ve got a great reputation with your customers and they’re very likely to be your biggest asset towards growth.

 

Decoding Your Reponses

Promoters (9-10): These are your brand enthusiasts. They’ll keep buying from you, they’re loyal and they’ll recommend you to their friends.

Passives (7-8): Satisfied but unenthusiastic, I like you but not enough to put my own reputation on the line through a recommendation.

Detractors (0-6): Unhappy customers who aren’t likely to buy again and are increasingly likely to bad mouth you and hurt your brand reputation.

 

Example NPS Score Calculation

You surveyed 100 customers:

45 are promoters, 20 are passives, and 35 are detractors.

The percentage of promoters: 45 promoters / 100 total responses = 45%

The percentage of detractors: 35 detractors / 100 total responses = 35%

NPS Score = percentage of promoters – percentage of detractors = 10

Above 0, not bad, but there is something holding a good chunk of your customers from providing referrals.

 

Acting on NPS Feedback

Rather than stopping at your NPS question, add a second question to your surveys, why did you choose [number]? Look at the responses from the detractors to this question, this will be the quickest way to create an action plan to up those scores.

Take a quick peak at amazon reviews – our culture is quick to downgrade a product based on way more than the product. Shipping delays, poor customer service, if the shipping container is bigger than they think it should be, the list is endless. Same thing with NPS scores. Listen to your customers, if you have a high number of detractors calling attention to shipping time, take a look at that.

 

Secondary Questions in NPS Analysis

Because NPS scores are so high level, it can be tough to find actionable insights from them on the surface, but using a secondary question allows you to pinpoint why the detractors feel the way they do. Benchmarking yourself against your competitors is where NPS scores shine. A quick google search will give you a range based on your industry.

Keep tabs on your scores and make sure to refresh your data quarterly or semi-annually. As we always say here at ASG, continuous improvement is the name of the game. Don’t get comfortable with a high NPS score, stay vigilant and try to push it a point or two higher.

 

TLDR / FAQ

Can NPS be negative?

Yes, NPS score can be negative. If the percentage of detractors is greater than the number of promoters the NPS will be a negative number.

 

What is a good NPS score?

Anything above a 0 is considered to be a fair or satisfactory NPS score. However, about 30 is considered very good or great, and 61+ is considered excellent.

 

How is NPS score calculated?

NPS score is calculated by taking the percentage of total respondents who are promoters (9 or 10) and subtracting the percentage of total respondents who are detractors (0-6).

 

Who created NPS Scores?

NPS scores were created in 2003  by Fred Reichheld, a partner with Bain & Company.

 

Is NPS score a percentage?

The actual NPS score is not a percentage, however, it is calculated using the percentage of promoters minus the percentage of detractors.

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