What is net promoter score (NPS)?
Net promoter score (NPS) is a customer loyalty and success metric that is used to measure customer satisfaction and the likelihood of customers recommending your business to their friends.
It is used to find out the company’s performance in the customer’s eyes by asking them the question "How likely are you to recommend us to a friend or colleague?"
How to calculate net promoter score (NPS)?
To calculate net promoter score (NPS), first, you need to start with the ultimate question, "How likely are you to recommend us to a friend or colleague?" and collect the answers on a scale of 0-10.
Customers who rated you between 9-10 are ‘promoters’ and those who rated on a scale of 0-6 are ‘detractors’, and others are passives.
Now, to calculate your NPS, simply subtract the ‘percentage of detractors’ from the ‘percentage of promoters’
Formula for calculating net promoter score (NPS)
Real-life example of net promoter score (NPS)
Let’s understand net promoter score with an example:
You rolled out a question among 100 of your customers asking them, "How likely are you to recommend us to a friend or colleague?"
Out of 100, 80 customers rated you between 9-10 (promoters), 15 rated you between 0-6 (detractors), and 5 of them rated between 7-8 (passives).
Now, your percentage of promoters is 80% (80/100 x 100) and the percentage of detractors is 15% (15/100 x100).
Then, your NPS will be: 80% - 15% = 65%
What’s considered a good net promoter score (NPS)? (benchmark)
Although an NPS score above 0 is good, above 20 is great and above 50 is amazing. Anything above 80 is the holy grail, as said by the creators of the NPS metric - Bain & Company.
However, you should aim to score an NPS of at least around 30% and a score of 60 or higher is generally a very good NPS in any industry.
These are just general benchmarks, a ‘good NPS’ will depend on the industry and country your business is in.
Ways to improve your net promoter score (NPS)
- Provide better customer experience: 86% of buyers are willing to pay more for a great customer experience. Knowing what your customer wants and aligning your products/services encourages customer loyalty towards your brand and ultimately increase their satisfaction rate.
- Build great customer support: 93% of customers are likely to make repeat purchases with companies that offer excellent customer service. Aim to achieve a fast response time and implement a live chat feature to solve customers’ queries instantly.
Also Read: Related Metrics
- Customer Churn Rate
- Customer Lifetime Value
- Customer Retention Rate
- Repeat Purchase Rate
- Customer Satisfaction Score (CSAT)
- Renewal Rate
- Customer Acquisition Cost
- First Contact Resolution Rate (FCR)
- Free Trial Conversion Rate
- Daily Active Users (DAU)
- Monthly Active Users (MAU)
- Average Revenue Per User
- Referral Program ROI
- Upsell Rate & Cross-sell Rate
- Viral Coefficient
- Participant Share Rate
- Invitation Conversion Rate
- Net Dollar Retention
- Product Adoption Rate
- Sessions per User