Net Promoter Score – what it is, why it is important, and how to calculate it.

Net Promoter Score (NPS) determines the extent to which your customers will be loyal to you. It also gives insights into how likely customers are to recommend your brand to others.

Your customers are your biggest source of advertisement. In this sense, NPS is an important KPI. The higher the NPS for your brand, the better the chances of your customers being loyal to you.

A higher NPS score also means your customers are highly likely to recommend your brand to their friends, family, and colleagues. Your company’s growth can improve by 20% to 60% when you focus on improving NPS.

How to derive your Net Promoter Score?

Here’s how you calculate NPS.

Using a 0–10 scale, determine your NPS with the help of the answers to this question: How likely are you to refer [your brand] to your friends, colleagues, or family?

The respondents can be divided into three categories:

• Promoters (scoring 9–10) are devoted supporters who will continue to purchase and recommend products. They are your most loyal customers.
• Passives (scoring 7-8) are happy but not as active as promoters. They are open to competing products.
• Detractors (scoring 0-6) are dissatisfied customers who can harm your brand and obstruct expansion through negative reviews and feedback.

To derive the final NPS, you have to subtract the percentage of detractors from the percentage of promoters. NPS can drop down to a minimum level of (-) 100 if all are detractors. It can reach a maximum level of 100 if all are promoters.

Refer to the formula here:

Want to learn more about crucial customer service KPIs you should track? We have done the homework for you.