Your Net Promoter Score NPS is a simple idea that can help you understand whether your customers are likely to promote you, or detract from your business. It answers the simple question: How likely is it that your customers would recommend your company to others?
You can calculate NPS using an online calculator, or you can use our free NPS calculator to get started. The formula for calculating your NPS and transactional NPS are the same, so you can use one tool as your NPS and tNPS calculator.
To use this calculator, just enter the total number of responses you have for each rating into the Net Promoter Score online tool. You’ll immediately see your overall NPS, which will be calculated based on all the answers entered.
Understanding your calculated NPS score
Net Promoter Score (NPS) is a metric used to measure customer loyalty and satisfaction. NPS was developed by Fred Reichheld as a way to understand the health of a company’s business, and its predictive power has been demonstrated across industries.
As we know, your NPS score is calculated by asking customers one question: “How likely is it that you would recommend this product/company to a friend or colleague?”
The responses are recorded on a scale from 0 to 10, and then categorized into three groups: detractors (score of 0-6), passives (score of 7-8), and promoters (score of 9-10).
These three groups are then represented as a percentage of the total number of people surveyed.
If you have 100 customers and 30 gave you a score of 9 or 10, those 30 customers become your promoters. Anyone who gave you a 7 or 8 becomes a passive, and anyone who scored you a 6 or lower becomes your detractor.
With a single number, NPS can provide a powerful view of your company’s customer loyalty. It’s a simple concept: a company asks a question of its customers and then calculates their satisfaction level based on their response. The score runs from +100 to -100, with negative scores indicating disloyalty and positive scores indicating loyalty.
Customer feedback is more volatile than sales figures. When sales go down, they often stay down for some time as customers defect to competitors. A single bad experience from an automated phone system or rude salesperson can quickly turn customers off for good.
Big companies like Apple, Amazon and British Airways have been using NPS® for years, but now you can calculate your score online for free at TRACX. You’ll learn how loyal your customers are and what you can do to increase their loyalty even more.
What is a good Net Promoter Score?
In absolute terms, any NPS score above 0 is considered “good” – it means that the majority of your customers are positive about your business. NPS scores above 20 are considered “favourable”, above 50 is excellent, and a business that achieves above 80 is world class.
However, NPS scores can vary wildly by country and industry. Where possible, using relative NPS scores can offer more insight into how your business performs relative to peers.
Follow up with promoters and detractors
If you want to see your Net Promoter Score (NPS) go up, listen to your customers. Customer feedback is the most valuable source of information about your business.
With the right tools, it can be easy to gain insights and find out why people are promoters or detractors.
Direct feedback from promoters and detractors will help you understand what you’re doing well and where you need to improve. You’ll also learn how to build stronger relationships with them.
But how do you find your promoters and detractors?
- Look for specific feedback in your customer service software or survey respondents who agreed or disagreed with the statements above.
- Check the customer profiles of your promoters and detractors for commonalities.
- Follow up with promoters to learn more about what’s working for them, and connect with detractors so they feel heard and valued.
- Talk to other employees in your company who work with these customers on a regular basis — they’re more likely than anyone else to have insight into their experience with you.
What does this NPS score mean for you?
The Net Promoter Score (NPS) is a breakthrough way to gauge customer loyalty and business growth. It reveals a company’s promoters, passives and detractors, helping businesses determine how to turn more customers into promoters.
Your Net Promoter Score is a single, easy-to-understand number that represents the health of your business. It tells you how likely it is you’ll lose customers in the next few months, and gives you a clear target to work towards when improving your customer experience.
Promoters are loyal enthusiasts who keep buying from a company and tell others about it. They’re the most valuable customers a company has because they drive the greatest growth. Detractors, on the other hand, are unhappy customers who will bring down a business’ market share and revenue through negative word-of-mouth.
In order to calculate an NPS score, you need to get input from your customers on a regular basis.
However, the process of gathering customer feedback can be difficult and time-consuming. TRACX makes it simple with built-in NPS surveys and a complete customer feedback platform.
Why should you care about NPS
Having a poor NPS score can be damaging to your business if you don’t do something about it
An NPS promoter score has a customer lifetime value that’s 600% – 1400% higher than a detractor (Bain & Company), but according to Zendesk, after more than one bad experience, around 80% of consumers say they would rather do business with a competitor.
A bad NPS score is an urgent matter that needs to be addressed immediately. Particularly as a bad NPS score may indicate that your customers are going to stop buying from you!
The only way to turn things around is to ask your customers why they feel that way and make a plan to fix the issues.
It’s a good idea to use a dedicated customer survey tool, such as TRACX, to get feedback from your customers. These tools make it easy for you to create a survey and target respondents based on various criteria.
What you do with this information will depend on what your NPS® score is and how it compares with your industry benchmarks.
If you’re doing well, continue doing what you’re doing.
If your score is below average, then now is the time to find out why.