The Net Promoter Score (NPS) is a widely used metric to measure customer satisfaction and loyalty. It is calculated based on the responses to a single question: “How likely are you to recommend our product/service to a friend or colleague?” In this article, we will discuss how to calculate NPS.
Step 1: Ask the NPS Question
To calculate NPS, you need to ask the NPS question to your customers. The question is usually asked on a scale of 0-10, with 0 being “Not at all likely” and 10 being “Extremely likely.” You can ask the question through a survey or feedback form, or during an interaction with your customer.
Step 2: Categorize Responses
Once you have collected the responses, you need to categorize them into three groups:
- Promoters: customers who responded with a score of 9 or 10. These customers are likely to be loyal and enthusiastic about your product/service and are more likely to recommend it to others.
- Passives: customers who responded with a score of 7 or 8. These customers are neutral about your product/service and may or may not recommend it to others.
- Detractors: customers who responded with a score of 0-6. These customers are unhappy with your product/service and are unlikely to recommend it to others.
Step 3: Calculate NPS
To calculate NPS, subtract the percentage of detractors from the percentage of promoters. The formula is:
NPS = % Promoters – % Detractors
For example, if 50% of your customers are promoters and 20% are detractors, your NPS would be 30 (50-20).
Step 4: Interpret Results
The NPS scale ranges from -100 to +100. A positive NPS indicates that more customers are promoters than detractors, while a negative NPS indicates the opposite. An NPS of 0 means that there are an equal number of promoters and detractors.
A high NPS indicates that your customers are highly satisfied with your product/service and are likely to recommend it to others. A low NPS indicates that there are issues with your product/service that need to be addressed to improve customer satisfaction and loyalty.
Conclusion
In conclusion, calculating NPS is a simple and effective way to measure customer satisfaction and loyalty. By asking the NPS question, categorizing responses, calculating NPS, and interpreting results, you can gain valuable insights into how your customers perceive your product/service and take action to improve customer satisfaction and loyalty.
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