Calculate your net promoter score (NPS, eNPS)

Have you ever wondered why retaining customers is important for businesses? What role do these existing customers play in the growth of a business? It boils down to trust, which decides how willing your customers are to recommend your services to others. Trust and loyalty go hand in hand—gain trust, and loyalty automatically follows.

NPS (Net Promoter Score) lets businesses measure customers’ satisfaction with the company’s products or services and their loyalty to a brand. It’s an indication of the growth potential of a company or product. Let’s dive deep into NPS/eNPS and find its significance in business growth.

What is NPS/eNPS?

NPS is a metric that measures customer satisfaction and loyalty — and motivates businesses to improve upon service, customer support, delivery, etc. It’s a whole number that ranges from -100 to 100.
‘e’ in eNPS stands for employee, which measures employee satisfaction and loyalty.

You may ask what is considered a good NPS or eNPS score? So, a good NPS score may vary from business to business. In general, we can classify NPS scores into the following:

Let’s understand the term with the help of a simple NPS question:

On a scale of 0 to 10, how likely would you recommend our product/services to a friend or colleague?

Based on the ratings, customers or employees are classified into three categories. If the customer chooses 9, he will fall under the “promoter” category. Or, If he chooses 5, he will be counted as “detractors”.

We’ll discuss these categories in detail in our later section. Stay tuned.

So, the above example signifies that the Net promoter score (NPS) is like any 5-star rating method, which broadly measures customers’ or employees’ opinions.

Promoters are the ones who rate either 9 or 10. They are loyal to your company and keep contributing to the growth by recommending your services to others.

Detractors are the ones who rate between 0 to 6. The unhappy customers can damage your brand and impede growth through negative word-of-mouth.

Passive are the ones who rate either 7 or 8. This group isn’t unhappy with you but may jump to your competitors if a better product option or price point comes along.

Why is it important to calculate NPS?

NPS calculation clearly shows an organisation’s performance through its customers’ eyes. Recent analysis shows that companies with long-term profitable growth have NPS two times greater than the average company.

NPS calculation gives you a number you can compile and track consistently for an entire organisation and every business, product, store or customer service team etc. Likewise, you can follow it for customer segments, geographic units, or functional groups. In a way, NPS calculation helps a company focus on the goals of creating more promoters.

How to calculate your company’s NPS/eNPS – Using Calculation Formula

NPS formula comprises two operands:

Percentage of promoters  – Percentage of detractors.

Let’s assume that company X sent out an NPS survey to 1000 customers.

• 250 customers respond with scores ranging from 0-6
• 350 customers respond with a score of 7 or 8
• 400 customers respond with a score of 9 or 10.

Now, evaluate the percentage of promoters and the percentage of detractors.

Percentage of Promoters 

= [Number of Promoters / Total number of Respondents] x 100

= [400 / 1000] x 100

= 40%

Percentage of Detractors

= [Number of Detractors / Total number of Respondents] x 100

= [250 / 1000] x 100

= 25%

Now, the NPS score

= % of promoters – % of detractors

= 40% – 25%

= 15%

Significance of detractors over Passives

Unfortunately, humans are most likely to remember or share negative experiences as compared to positive ones. In a recent survey conducted over 3,200 random customers, 75% said they would probably share a negative experience with their friends and colleagues. In contrast, just 42% recommended a product or service they liked. This is the toxicity of a detractor and the foremost reason you should respond to them first. While working with detractors, there are a few things you should look at:

a) For detractors, the rate of attrition or churn rate is high: Detractors can score from 0 to 6. Customers giving 0’s, 1’s, or even 2’s are unsatisfied with the service or product. But scores like 5’s or 6’s could be seen as an opportunity, and you must respond to them as quickly as possible and address their concerns.

b) Detractors outweigh your promoters: As we discussed above, we care more about the threat of bad things than we do about the prospect of good things. You need several promoters to support the brand for every detractor you have. And this further increases the importance of detractors.

We talked about promoters and detractors in detail. What about passives? If we see the NPS formula, passives aren’t in the equation. More promoters than detractors indicate growth. While having more detractors than promoters is an indicator of a decline in the growth curve. On the other hand, more passives don’t tell you much of anything – maybe you are not doing enough to satisfy your customers? Now, since passives don’t move the needle doesn’t mean that they can’t make a difference. To earn the loyalty of a detractor, you need to engage with them in a meaningful conversation and show them that you’re something beyond the service or product they bought. You should try to leverage your passive customers and turn them into promoters.

NPS Calculator – Expedite your NSP Calculation

An automated way to measure your NPS/eNPS score is by putting the number of times you received each score, and it will do all the calculations for you.

What does your NPS score interpret?

Interpreting the NPS score will help you understand if your NPS score is good or bad. There are two methods: Absolute or Relative – You can use either method to decide what your NPS benchmark could be. Let’s take a look at how both are different from each other.

Rather than stretching too much on external benchmarks, it’s better to use your score as your yardstick, i.e., a benchmark to be improved upon. Learn more about what is considered a good NPS score in another blog.

Calculating Net Promoters Score With Survey Tool

Collecting your NPS data with survey software like Freshsurvey is super quick.

Our survey tool lets you run FREE NPS/eNPS surveys with your customers/employees and gathers the appropriate data. Later, you can analyse and act on your NPS score in real-time through the NPS dashboard. Also, track changes, and trace daily NPS fluctuations for the previous 30 days and weekly/monthly fluctuations for the past 12 months.

What are you waiting for! Grab this FREE NPS survey tool and get your customer/employees feedback within a few clicks.