Net Promoter® Score, or NPS, is nothing more than a customer loyalty metric for any size business, but it has more relevance today than ever. The data used in calculating NPS is ascertained by companies asking their customer’s one simple question using a rating scale from one to ten. Once the data is compiled, elementary math is all that is needed to calculate NPS.
Components of Net Promoter Score
Customers are simply asked how likely it is they would recommend a company to a friend or colleague. According to Satmetrix Systems, Inc., Promoters, a nine or ten on the rating scale, “are loyal enthusiasts who will keep buying and refer others, fueling growth.” Passives, a seven or eight rating, “are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.” Detractors, any rating at or below six, “are unhappy customers who can damage your brand and impede growth through negative word-of-mouth. Only Promoters and Detractors are used to calculate NPS.
Calculating Net Promoter Score
One of the greatest aspects of NPS is its ease of calculation. One would start by summing the number of ratings in each of the three categories. Then divide the number of ratings in each of the three categories by the total number of ratings to get the percentage of customers that fall within each category. Finally, subtract the percentage of Detractors from the percentage of Promoters. The answer is your NPS.