How is the NPS® Score Calculated?
Are you seeking the easiest and time-saving way to calculate the Net Promoter Score® (NPS®) of your business? Here, you go and find 3 prominent ways.
To boost the business growth you need to ensure good customer health and a great customer experience. But what’s the way to measure it and then to grow it? Net Promoter Score® (NPS®) is the answer to your question.
NPS® is a leading Customer Experience Metric that helps you to measure the satisfaction and loyalty level of your customers. This evaluation is done based on the likelihood of your customers to recommend you.
NPS gauges the likelihood of the customers to recommend your Products, Services, Business, or Brand to their friends and family.
Why measure the Net Promoter Score?
- To measure Customer Loyalty - 93% of loyal customers are likely to make repeat purchases with companies who offer excellent customer service. NPS gauges customer loyalty efficiently by asking the customer to rate their likelihood of recommending the business. This helps you to understand the purchase behavior of your customers and tailor your business according to their needs.
- To know the areas of improvement - The NPS Question has the power to highlight those areas of the business that need improvement. The NPS Survey has two-part - the first part is the Standard NPS Question that captures quantitative feedback and the second part is the Follow-up Question that captures the qualitative feedback. The answer to this follow-up question helps you to focus on the root cause of dissatisfaction and quickly identify issues to improve your products and services.
- To excel the Customer Expectation - The NPS Survey predicts the purchase behavior of the customers effectively if it is used efficiently. It all depends on how effectively and when you use the Net Promoter Score. By asking a simple follow-up NPS question - “What is the one thing we can change to make your experience better?” you can get constructive suggestions from your customers that not only help you to streamline your business according to your customers’ needs but also present a clear picture of what your customers expect from you.
- To reduce Customer Churn Rate - NPS strengthens your business growth by calculating your customer churn rate. It refers to the number of customers who left the company in that specific period due to a bad customer experience.
What is the NPS Score Formula?
Bain & Co. has laid the standard formula to calculate the Net Promoter Score by subtracting the total percentage of Detractors from the percentage of Promoters. So, NPS = % Promoters - % Detractors. The NPS ranges from -100 to 100.
What are Detractors?
A detractor is a type of NPS audience who score their likelihood of recommending very low i.e between 0 to 6. They are those customers who are unhappy and unsatisfied with your poor customer experience.
But the worst thing is that they’ll not stop here only. 75% of consumers stated that they share a negative experience with their friends and colleagues. It is being suggested that you should follow up with your detractors and convince them to be your promoters.
What are Passives?
Passives are types of NPS audience that lie between the detractors and promoters and score their likelihood of recommending you moderately, around 7-8. They are passives in nature when it comes to expressing loyalty towards your brand.
It means passives will neither show too much excitement in your business nor spread bad word-of-mouth for your business. Usually, passives are not threatening to the business, so businesses ignore them.
But, if you can, turn your passives to promoters, this will take your business growth a level ahead.
What are Promoters?
Promoters score their likelihood of recommending you high, around 9-10. They are considered to be your super happy and fully satisfied customers. They are likely to be more loyal to you.
These enthusiastic customers will advocate for your brand and spread positive word-of-mouth for your brand. It is very important to follow-up with the promoters and encourages them to give positive reviews.
This helps you to convince your detractors to become promoters and fuel the overall growth of your business.
How to Calculate the Net Promoter Score?
Bain & Co. has already defined the standard to calculate the Net Promoter Score through a formula. Nowadays businesses have started conducting NPS Survey from various methods, so, let's explore the 3 prominent ways to calculate the NPS Score:
- Calculate NPS using Excel
- Calculate NPS using Online NPS Calculator
- Calculate NPS using NPS Software
Calculate NPS using Excel
The best way to calculate the NPS in Excel is by using the COUNTIF - the statistical function that counts the number of cells having data (NPS Scores). You can create your own NPS Calculator in Excel by following the given steps:
Step 1 - Export or copy-paste the NPS scores into an excel sheet.
Step 2 - Now categorize responses into detractors, passives, and promoters and count them.
Say, if you put scores in Column D. So, the function for finding the number of responses for:
- Detractors (0-6): =COUNTIF(D:D,”<=6”)
- Passives (7-8): =COUNTIF(D:D,"7")+COUNTIF(C:C,"8")
- Promoters (9-10): =COUNTIF(D:D,">=9")
Step 3 - Now you can find the percentage of each category by using the simple formula:
Number of Responses from (different NPS audience - Detractors, Passives, and Promoters) ÷ Total Number of Respondents x 100.
You can use the COUNTIF functionality formula to find your net promoter score:
Calculate NPS using Online Calculator
Online NPS Calculator has made the NPS Calculation easy and quick. It can be done easily by summing up all the responses and then subtracting the percentage of detractors (those who rated between 0-6) from the percentage of promoters (those who rated 9-10).
Use the online NPS Calculator to know the Net Promoter Score. Using the free online NPS Calculator, you only need to enter the number of people who marked you 0-10 against each value, and your NPS score will be calculated automatically.
Calculate the NPS using NPS Software
You can also calculate the Net Promoter Score using the NPS Software. The main benefit of using any NPS Tool or software is that it manages everything right from creating, distributing, managing, and evaluating the NPS Surveys.
With the NPS Software, you can send NPS Surveys via Email, SMS or put up an NPS Survey on the Website and Kiosks. Customers can give real-time responses on your NPS Survey and you can view real-time NPS Reports and Dashboard.