Net Promoter Score (NPS) is a metric between -100 and 100 designed to make customer loyalty measurable. Research has found that there is a strong correlation between a company’s NPS and the loyalty of its customers, apparently, we tend to stay loyal to brands that we are happy to recommend to others.
The NPS question is a single question, usually worded exactly as:
How likely is it that you would recommend [Organisation] to a friend or colleague?
The respondent is offered a scale from 0 to 10, with 0 being not at all likely and 10 extremely likely.
Responses are grouped in three groups according to:
- Ratings between 0 and 6 are considered detractors
- Ratings between 7 and 8 are considered passives
- Ratings between 9 and 10 are considered promoters
How is the NPS score calculated?
Based on these groups, the NPS is calculated like this:
((Number of promoters – Number of detractors) / Total responses ) x 100
The formula is sometimes also written as (which gives the same result):
Total % of promoters – Total % of detractors
It is very common to complement the Net Promoter question with a free text input encouraging the respondent to motivate his or her rating. This question adds context and can be very valuable in analyzing and building action plans based on the NPS measurement. If possible the heading of this question is based on what rating was given (‘please tell us more about why you wouldn’t recommend [Organization]’ for example) which can have a positive impact on the number of free-text answers collected.
Try a demo NPS survey made for ‘Petstore’ with Questback
View an example NPS report for ‘Petstore’ in Questback
- NPS Calculator
- Example calculations of NPS
- NPS benchmarks
- What is a good NPS score?
- Combining the NPS question with a free text input
- Working with NPS respondents and response rate
- When to measure NPS
- Taking action on NPS
- Including the NPS question in other surveys
- Scientific foundation of the Net Promoter Score
- Pro tip: calculating NPS in Excel
You can use the net promoter score calculator above to try out different combinations of detractors, passives, and promoters and see the effect on the NPS.
Example calculations of NPS
Since the calculation to derive a Net Promoter Score is pretty specific, it is important to understand that it differs a lot from say an average that could be calculated on a question with options from 0 to 10. The calculation for NPS has been created to put very specific weight on different rating alternatives and this lets it have different sensitivity to detractors, passives, and promoters in turn. It can also be seen that this is a metric that truly tries to measure the will to recommend in only deeming answers 9 and 10 as real promoters while all answers between 0 and 6 are considered to have an active risk of churning/showing very low loyalty.
Let’s look at a couple of example NPS surveys and their outcome:
|0-6 (detractors)||7-8 (passives)||9-10 (promoters)||Total responses||Calculation||NPS|
|20||12||10||42||((10-20)/42) x 100||-23|
|20||20||20||60||((20-20)/60) x 100||0|
|10||8||20||38||((20-10)/38) x 100||26|
From these example calculations, we can learn a couple of interesting things.
- If you have more detractors than promoters – you will have a negative NPS (and with more promoters than detractors you will have a positive score)
- The number of passives does not affect if you get a positive or negative NPS – but it will either lower your total if you have a positive NPS or increase it if it is negative. In this way, passives act like a sort of ‘damper’ on your score. you can see this by experimenting with increasing or lowering the number of passives in the examples above (since passives are not included in the NPS calculation, their effect is only to increase the number of total responses which is used in the calculation)
- If you have an equal amount of detractors as promoters, your NPS will be 0 no matter how many passives you have
- Getting a high NPS requires a lot of promoters and even a handful of detractors can put you down from the really high scores
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NPS is a standardized question, and as such designed to be able to compare between products, companies, countries, or other entities. This is also the core reason why the NPS question should be kept as close to the exact wording in all instances – both between an individual company’s surveys and between different companies’ surveys.
Looking for quick and easy answers, unfortunately, there is none in regards to benchmarks and comparisons, however. The Net Promoter Score varies greatly between industries, types of products, and services and especially with how and when the question is asked.
With our experience at Questback we see a particularly large impact on the Net Promoter Score if it is measured:
- Close to personal contact with an employee
- Close to a positive experience as compared to a negative
- Event/trigger-based or recurring (such as annual) where both response rate score is usually positively correlated with the recency of interaction with the company
The best benchmark for the Net Promoter Score is naturally your own organization. At Questback we always recommend measuring continuous or touchpoint NPS where you collect a trend of answers that can be followed over time. This way, you can both get an overview of the current state of things while you clearly see the impact of actions to improve the NPS. It is also possible to compare your NPS between different countries, departments, products, and so on and create internal company NPS targets to strive for.
In general benchmarks, it can be said that competitive industries (such as insurance, retail, and e-commerce) often see NPS benchmarks above 50 while more complex service deliveries such as hotels and IT services can see benchmarks between 30 and 50. Very few industries however measure benchmarks in the below 0 (or maybe companies are just not as eager to share their data when they have really low scores).
What is a good NPS score?
Beyond the complexity of comparing Net Promoter Score between companies, it can however easily be said that a high NPS is better than a low. One could wish for all interactions to garner a 10 rating by the customer, but we do know that this in reality is extremely rare and it is hard to realistically expect an NPS of 100 for a company. It is however not at all as unlikely to have a company see a -100 NPS however rare – taking away a score of 100 requires only one answer between 0 and 8 while getting a -100 score only requires that no one gives a rating above 6 as we have seen.
NPS benchmarking reports can easily be googled or bought, but a word of advice is to not put too much effort or focus on the NPS scores of other organizations but instead focus on benchmarking inside and between parts of your own organization. The point of measuring should always be to take action on the results – and this you can hopefully do without turning to benchmarks. The NPS metric also gives away pretty clearly if you are over or under-optimizing where you maybe should focus on other areas of improvement if you reach an NPS score above 70 or double down on your efforts if you are below 30.
Combining the NPS question with a free text input
The NPS question will give you a metric to work with, to communicate with, and to push initiatives toward improvement. But how do you actually improve on your NPS?
Instead of guessing, most organizations choose to follow up the NPS question with a free text input to let their respondent add some context to their answer. When it comes to analyzing results, this is often where the real magic happens.
By splitting up free text answers between answers from detractors, passives, and promoters it is often easy to spot trends in answer sets both small and large. If you have very large answer sets and perhaps even in multiple languages, you can have the help of automated text analysis or word clouds to collect bigger themes, but many times the real value lies in the individual answers, providing insights into your customer’s world that you rarely access otherwise.
In general, at Questback we always advise adding a free text input after the NPS question to ensure to collect more qualitative feedback together with your net promoter score as well as to build triggers and notifications so that you can take action if you see individual responses that have concrete issues or suggestions for improvements.
Working with NPS respondents and response rate
Making a good NPS measurement requires you to make sure that you are collecting answers from the right audience and that this audience is somewhat representative of your general audience.
One way to certainly skew your NPS results is by being selective in who receives the survey or by unintentionally underrepresenting specific groups.
The most common cause of a misrepresentative NPS is allowing manual selection of who receives the question. This can, unfortunately, happen if manual steps are involved in sending the survey which can impact for example a customer support representative’s will to send a survey to a particular customer or by just having different processes among different employees which skews the representation of who they ask.
The more unintentional way of misrepresentation is often connected to how the NPS question is distributed. Not offering a mobile experience to collect answers, only offering email surveys and not SMS, and so on can inadvertently skew the results by under-representing for example younger people.
When you are certain that you are asking the NPS question to all the right people, it is therefore important to follow your response rate on the survey closely and look for patterns that could show that you are missing important voices in your data.
When to measure NPS
There are in essence three different occasions when you can ask the NPS question:
- Touchpoint/trigger-based is when an Net Promoter Score survey is sent as the result of an event such as the customer making a purchase, completing a support case, or becoming a customer.
- Recurring many organizations choose to track their NPS recurringly every 6 months or annually. This way it is possible to follow a trend and look at the impact of actions done to improve the NPS.
- Ad-hoc it is always possible to make ad-hoc measurements of NPS to a specific group of customers or maybe just because there is no recurring process of NPS measurement active at the moment.
All three methods of triggering an NPS survey have different pros and cons but some things can be said more generally:
- You will get a higher response rate if you trigger an NPS survey in connection with customer interaction, when the interaction is fresh in the mind of the customer it is also easier to give a well-balanced rating.
- Recurring NPS surveys are great to track the NPS over time, but it creates the risk of survey fatigue among respondents and should therefore either be used sparingly to just samples of the customer base at a time or with a long time interval between (at least 6 months).
- Ad-hoc NPS surveys are often done with a very clear purpose behind and can be great in the regard that they are some of the most frequently acted upon surveys when it comes to implementing actions on the results or really using the analysis of the data, but they, however, risk becoming rare and long between why it is not a preferred long term strategy for NPS measurement.
Looking at touchpoint and trigger-based NPS surveys, these can be used to measure company Net Promoter Score but our experience and data show that the score differs a lot for the same organization depending on the context of the question, in this case, it is important to handle the net promoter score with great care not to compare apples to pears, both internally and externally.
At Questback we see a lot of different touchpoints where NPS is used, here are some of the most common ones:
- Customer service is often in connection with a final case resolution
- Sales meetings triggered to evaluate the meeting as well as how it affected the general impression of the company
- Product ‘product NPS’ can be used to measure loyalty towards a product as compared to the company
- Post-purchase maybe the most common one we see today after completing a purchase in a store
Taking action on NPS
The net promoter score is just a number, and as such, it is not much to take action on. It is either low, high, or in-between and you can get a feeling for if you are doing something right or wrong. The interesting part does not come until you start to track NPS over time and can see changes based on actions or internal conditions. It is not uncommon to see a lower NPS as a result of longer wait times in customer support when staffing is low for example or the effect that unsound business practices can have on customer will to recommend and loyalty.
To make the most out of your NPS you should however always combine it with a free text input and if possible try to identify other drivers by measuring how they correlate with your NPS. This can be done by adding scale questions related to the customer experience in combination with your NPS which allows you to see how for example wait times or the skill of a sales representative affect your NPS.
Including the NPS question in other surveys
The NPS question is short, easy to understand, and can greatly help you interpret answers to other questions in a survey. In this way, the NPS question is a low-effort way of adding valuable data also to surveys such as a yearly customer survey, a churn survey, or win/loss survey to a sales prospect.
With the help of the NPS question in this context, you can easily break down drivers of NPS by looking at how detractors, passives, and promoters rate other questions. Insights to be gained by this kind of analysis range from identifying what in your offering that has the highest correlation to your NPS (not uncommon learnings from this kind of analysis is the impact good or bad customer support has on NPS or how details such as your payment options can impact the sentiment towards the entire business).
Scientific foundation of the Net Promoter Score
The NPS question was created with the intention of finding a single question that took into consideration the full experience of the customer while giving a clear indication of overall satisfaction. The research and idea were to look for a question that had a strong correlation with both customer loyalty and company profitability.
After over two years of research, Fred Reichheld could conclude that asking about willingness to recommend to a friend or colleague did just that, and thus the NPS question was born. In many places, the NPS question replaced complex questionnaires with a multitude of questions to cover all areas of the customer experience with one simple metric that could be used to optimize the business towards profitability.
Today the net promoter score is a proprietary instrument owned by Fred in conjunction with Bain & Company and Satmetrix.
For a more extensive history of NPS, please read our article ‘a brief history of NPS‘.
Pro tip: calculating NPS in Excel
Here is a neat little trick known to few – it is actually fairly easy to calculate NPS based on raw data of answers between 0 and 10 and you only need one smart formula. In Excel it would look like this:
=IF(CELLVALUE < 7, -1, IF(CELLVALUE > 8, 1, 0))
This formula will give you a value of either -1, 0, or 1 where CELLVALUE refers to the cell where you have the raw data of the respondent’s answer (a rating between 0 and 10). To get your NPS from a group of answers, you simply use the SUM() operation to add up all the answers your formula has created and divide this value by the total number of answers and multiply by 100. This way you can easily calculate NPS in a Pivot table for example.