What is Net Promoter Score and how to calculate it?

Net Promoter Score (NPS) is an Industry recognized benchmark score for measuring Customer Engagement and Loyalty. Compared to conventional customer satisfaction survey scores, NPS helps you more, by giving a measure of Customer Advocacy. 

You can scale up your business at hyper scale growth if your customer does your sales and marketing for you instead of you going behind prospects to win deals. An Ideal Marketing strategist should build the product and the ecosystem around it in such a way that the customer should like using your product and in addition to that customer should recommend your products & services to other customers in their network. When your customers become your army of influencers or advertisers, your growth is going to be 10X. Customers are more likely to buy something recommended by an existing user than by blindly going on the words of a sales rep. 

NPS tells us how likely is your customer willing to recommend your product & services to another colleague or a friend.

To calculate NPS, follow these steps:

  • Administer a Survey. It can be an online survey via Google Forms or other Online Survey tools. 
  • Keep one simple question: "How likely would you be willing to recommend <your Company name/Brand Name/Product Name> to a colleague or a friend?"
  • In the answer option, you should have a 0 to 10 pointer likert scale where score 0 represents Highly Unlikely while the score 10 represents Highly Likely.

 

  • Based on the scale responses, you may categorize your customers into 3 types:
    1. Promoters: Those who rate your product between 9 to 10 are called Promotors and are the real advocates of your products. They are highly likely to recommend it to others.
    2. Passives: Those who rate your product between 7 to 8 are Passive customers and are neutral about your offerings.
    3. Detractors: Those who rate your product between 0 to 6 are called Detractors. They are not at all likely to promote your product, instead they may detract others from your product.


  • Based on the survey response, make a count of number of responses in each category i.e.
    1. Number of Promoters  (a)
    2. Number of Passives (b)
    3. Number of Detractors. (c)
    4. Total Number of responses (a+b+c).
  • Net Promoter Score is calculated as, 
NPS = ((Number of Promoters - Number of Detractors)/Total number of responses)x100 


  • NPS ranges from -100 to +100. Here -100 represents all your respondents were Detractors while +100 represents all your respondents were Promotors.


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