How is the Net Promoter Score or NPS calculated?
Find out how to get a high NPS
Even if customers can answer to the question with a rating ranging from 0 to 10, the result does not come from a weighting or an arithmetic mean. Do you know how to properly measure your NPS? Do you know which is the best score to determine if the product or service provided is what your customers really expect?
If you go on reading, you will learn how to calculate your NPS and what know what NPS score is to be considered as good.
Promoters, passives and detractors: can you remember them?
First of all, remember that according to their answers you can classify your customers into three types:
- Promoters. They have rated with a 9 or 10. They would recommend you because they trust the brand, they are potential fans of your brand and those who spend time suggesting changes and improvements. They will create the best word of mouth effect for your brand.They have an emotional and special bond with the brand.
- Passives. They rated a 7 or 8 and are satisfied with the service or product. However, even if they don't openly criticize your brand or create a negative word of mouth effect, they probably won't end up recommending you either.
- Detractors. They rated from 0 to 6 and did not have a good experience, they will surely express bad opinions and a generate a negative word of mouth effect. It is very difficult to recover them as customers; surely you need to accept their criticism and make an effort to solve the problems you might have caused to them.
How is the NPS calculated?
Now that we know the three categories of customers the NPS helps us to identify, let's calculate the score though the following example:
- Imagine you have a clothing store.1000 customers have completed a satisfaction survey this month when leaving the store. This survey includes an NPS question formulated as follows: How likely are you to recommend our company or product to a friend or relative?
700 customers vote with a 9 or 10 ; 180 customers with a 7 or an 8 and 120 customers answer the question with a rating from 0 to 6. In this case, the company has generated 70% of promoters (700 out of 1000 rates 9 or 10 ); 18% of passive clients (180 out of 1000 rated with a 7 or 8) and 12% of detractors (120 out of 1000 voted 6 or less).
To get the final score you need to apply the following formula: NPS= % Promoters - % Detractors
*Remember that passives are not counted in the calculation of the NPS.
In the case of the clothing store, the formula would be applied as follows: NPS = 70% – 12% = 58%
But ... what does that score really mean?
Well, now we know that the NPS of our clothing store is 58. It might look like a low rating as a calculation based on 100 basis. We might think about it as a 5 note. However, as said at the beginning, even though the answers to the NPS question range from 0 to 10, the final NPS score ranges from -100 to 100, being -100 the worst score that can be obtained; and +100 an excellent score If we wanted to compare it to the decimal system of the academic world, then a note equal to 0 would correspond to -100 in the NPS system; a note equal to 10 would correspond to 100 in the NPS syste and a note of 5 out of 10 would be a 0 in the NPS system
If the result is positive (from 0 to 100), you can consider that up to a certain extent your brand is recommended and therefore the loyalty to the brand might also be high. On the contrary, if the NPS score is negative (from -100 to -1), it is necessary for you to act immediately to understand and correct those areas which are generating such a high number of detractors. Finally, if your NPS is above 50, then you have reached a level of excellence.
In our example, the clothing store obtained a NPS of 53, which is a very positive score; on a 0 to 10 scale, it would correspond to 8.65 as shown in the image above.
Integrate the NPS with additional information
Apart from the NPS you should bear in mind the importance of asking additional questions in order to understand the why behind your NPS score. That's why we recommend our clients to include additional specific questions:
-Reasons for a low satisfaction: give your customers the opportunity to select the reasons behind a poor service (such as waiting time, staff friendliness, ease for finding what they were looking for, etc.)
-Staff evaluation questions: who attended you today? Were they kind? Have they helped you adequately?
-Open-ended questions: allow your customers to leave free comments for any possible improvement suggestion in order to provide an excellent customer experience.
Remember that data segmentation and crossed analysis might be very useful to obtain helpful insights
If you want happy customers who are loyal to your brand, listen to them and improve their experience.