Net Promoter Score® measures customer experience, predicts business growth, and is calculated based on responses to a single question:
"How likely is it that you would recommend our company to a friend or colleague?"
The customer answers this question by selecting a number on a 0-10 point scale, with 10 being very likely to refer you and 0 being not likely at all.
To calculate NPS, responses are assigned to a category and used to solve for NPS.
- 9 or 10 = Promoters (likely to buy more, remain a customer, positively refer others)
- 7 or 8 = Passives
- 0-6= Detractors (likely to share a negative referral)
NPS = Promoters % of total - Detractors % of total
In this example, 100 customers were surveyed and the number of responses for each rating is totaled.
To find Promoters % of total:
75 (total Promoters) divided by 100 (total respondents) = .75 (75% of total)
To find Detractors % of total:
10 (total Detractors) divided by 100 (total respondents) = .10 (10% of total)
To find NPS:
75% (Promoters % of total) - 10% (Detractors % of total) = 65 (NPS)
NPS performance varies across industries but generally the following applies:
- -100 (every responder is a "detractor") to -1 = Poor
- 0 - 29 = Average
- 30 - 69 = Good
- 70 - 100 (every responder is a "promoter") = Excellent
In conclusion, NPS helps to understand how likely it is that a business will grow because it identifies how likely it is that customers will exhibit value-creating behaviors, such as buying more, remaining customers for longer, and making more positive referrals to other potential customers.