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Add up the number of answers per category
Add the total number of responses per group
Subtract the percentage of Detractors from the percentage of Promoters
What is the Net Promoter Score® (NPS)?
The Net Promoter Score (or Net Promoter System) is an easy and proven method to understand customer satisfaction and feedback from the beginning.
Ask the Right Question
The NPS basically refers to one, carefully chosen, but easy to answer first question: "How likely would you recommend this service to a friend or colleague?". Customers will answer this question in two steps. The first part is a numerical rating on a scale from 0 to 10. Therefore the result is a standardized, quantitative benchmark that can be evaluated over time.
Net Promoter Score: Calculation and Interpretation
Over the last few years, the Net Promoter Score (NPS) has become one of the most popular business metrics that gives companies a probability of whether customers recommend the company or brand. Not only does it link customer loyalty to the economic success of a company, but it is also extremely easy to calculate. As with any other opinion survey, there are certain rules that must be observed when calculating the Net Promoter Score. A balanced research methodology and a suitable survey format contribute to a representative result and prevent important aspects from being lost during the calculation.
1. Net Promoter Score (NPS): Overview 2. NPS Survey: The Appropriate Survey Design 3. NPS Calculation: The Net Promoter Score in Practice 4. The Right Questions for Successful NPS Calculation 5. Interpreting the Net Promoter Score Correctly 6. Net Promoter Score: The Limits of the Measurable 7. Quantitative vs. Qualitative NPS Surveys: Advantages and Disadvantages 8. Net Promoter Score: Summary and Conclusion
Net Promoter Score (NPS): Overview
How do you determine whether customers are really satisfied with their shopping experience and the customer service of a provider? The Net Promoter Score can be used to identify customer loyalty and satisfaction and thus calculate the probability of customers recommending the company and its products or services.
The calculation is based on a question that customers answer in a 1 to 2-minute survey. Based on their rating, the respondents are divided into three categories or groups on a scale of 1 to 10: Detractors (0-6), indifferents (7-8), and promoters (9-10).
Definition of the three groups:
Detractors, or critics, are not particularly well-disposed towards the company and would not recommend or even advise existing or potential new customers to use a product or service of a certain brand. The reasons are manifold and experience shows that only one bad customer experience with the customer service or a faulty product is enough to lose existing and potential new customers. Why one should react to detractors is explained in our article "9 reasons why it is worth to react to detractors".
Indifferent, or even passive customers, may not be among the passionate critics of a brand, but a recommendation is impossible due to their lack of conviction. This also means that no new customers can be generated - on the contrary: a neutral opinion can turn away existing customers just as much as very bad feedback.
Promoters, or fans, form the backbone of a company: they belong to a loyal customer base that actively acquires new customers and conducts its own marketing for the company. While one should win as many promoters as possible, detractors also have their function and can significantly advance customer orientation, provided the reason for their dissatisfaction is known.
In Summary: The Three Groups that Determine the Net Promoter Score
Detractors: 0 – 6
- are the biggest critics of a company and its product,
- can negatively influence existing or potential customers,
- reveal room for improvement to a company.
Indifferent: 7 – 8
- represent a great uncertainty due to a lack of recommendation,
- can negatively influence existing or potential customers.
Promoters: 9 – 10
- are the biggest supporters of a company and its product,
- can positively influence existing or potential customers by recommending them,
- can be integrated into specific case studies and new product launches.
In the following, we explain step by step how the Net Promoter Score is calculated. It shows how a company can achieve the best result by creating the right survey design to measure customer loyalty and satisfaction.
NPS Survey: Appropriate Survey Design
Many companies that decide to calculate their Net Promoter Score invest a lot of time and resources in the planning phase to find out how many and what kind of surveys are needed. However, the calculation of the Net Promoter Score shines with its simplicity, which also applies to the implementation of the Net Promoter System. While management should be aware of the advantages and disadvantages of an NPS analysis, they should not spend too much time on planning and speculation. Even though NPS surveys already exist in the field, it is still possible to develop strategies that are better tailored to preliminary results within the industry.
In NPS calculations, experts distinguish between surveys that measure customer loyalty and retention to a company or brand (relationship surveys) and surveys that measure customer satisfaction with specific interactions at the touchpoint level (transactional surveys).
It is generally recommended to start with broader "relationship surveys" before calculating the Net Promoter Score for individual segments or touchpoints. Companies usually calculate their Net Promoter Score every three months, semi-annually or annually to determine customer loyalty. The customers' attitude towards the brand as a whole provides information about which Touchpoints should be investigated by means of separate surveys.
Important: It is not a question of analyzing all touchpoints, but only those that are named by detractors as the cause of a poor rating. Companies whose business model is based on single and rarely repeated transactions should seize every opportunity and ask customers about a unique interaction. If there is already a group in the customer base that is part of an existing loyalty program (for example, "business class customers or frequent flyers with an airline), it is advisable to conduct two separate NPS surveys.
Combined: The Two Types of Net Promoter Score Surveys
NPS – Relationship Survey
- serve to measure customer loyalty,
- measure the general attitude towards a brand,
- show which touchpoints cause problems,
- are a good introduction to gain first impressions,
- should be carried out regularly.
NPS Transactional Surveys
- serve to measure customer satisfaction,
- refer to individual touchpoints/customer interactions,
- are usually only used after the survey on customer loyalty,
- are suitable for companies without a fixed customer base.
The Right Questions for a Successful NPS Calculation
To calculate the Net Promoter Score, usually, only one question is needed. However, the management or marketing department can do little with a purely quantitative result (score), which does not include any causes for bad ratings. For this reason, respondents not only provide the quantitative score, but also a comment that justifies the evaluation. Only in this way can the full potential of an NPS calculation be exploited.
However, caution is advised with further questions: If a survey is too long, it can immediately scare off customers, so that the response rate is low and the result is no longer representative. The advantage of an NPS survey is not only that it can measure customer loyalty and customer satisfaction, but also that it generates a high number of participants due to its brevity, thus giving a company a realistic self-image.
Companies can achieve the highest response rate with just one free-text question. This is the second and final question that records the reasons for the evaluation. It is often asked how likely it is that the respondents would recommend the company or a certain product to another person. The more questions are asked in a survey, the sooner the drop-out rate or the participants' response rate increases. An open input field has the advantage that the respondents do not necessarily have to choose a given reason. Often there are several reasons for a certain evaluation, which are not always known in advance. Leaving it to the customers to formulate the reasons for their evaluation results in considerably more valid data and values. One reason for this is that respondents only list reasons that they can actually remember.
Different answers in open input fields may be more laborious to evaluate - provided all answers are read - but they offer more than just speculation about customer loyalty and customer satisfaction. A good evaluation software is of great help here, which groups the text comments by content (clustering). Especially in the case of a comprehensive NPS survey, the right text analysis tool makes the evaluation easier and saves a lot of time. zenloop offers this possibility with the help of "smart labels".You can learn more about this here.
Summarized: An NPS Survey Produces the Best Results when it...
- is clearly formulated and has an attractive design,
- in the case of online surveys, is optimized for mobile use
- asks for the probability score (0 to 10) and the associated justification, i.e. provides quantitative and qualitative information.
Example Questions of an NPS Survey
- "Are you already using product xy from company xy?"
- "How likely is it that you will recommend the company/product xy to a friend or colleague?
Quantitative vs. Qualitative NPS Surveys: Advantages and Disadvantages
Before collecting NPS feedback, the advantages and disadvantages of quantitative and qualitative issues should be made clear.
Quantitative NPS Survey
- Good measurability and comparability of data
- Objectivity in analysis
- Detection of patterns (over a longer period of time)
- Measurability of satisfaction with a specific product/service
- Low costs compared to qualitative methods
- The query of the score alone is only suitable if certain assumptions already exist and should be confirmed
- Rigid examination format through standardization
- Causes for submitted rating not apparent and therefore
- No suggestions for improvement derivable
Qualitative NPS Survey
- Flexible adaptation to examination conditions
- Possibility to recognize new and unknown connections
- Respondents do not have to assign themselves a predefined answer
- Information is more complete and authentic
- Respondents determine the focus
- Data quality and interpretation depend on the observer
- Time and cost-intensive evaluation (if no software is used, such as zenloop)
- Comparison of data relatively difficult
- Results difficult to present in figures
NPS Calculation: The Net Promoter Score in Practice
As soon as the results of the NPS surveys are available, they result in the Net Promoter Score in their collected form. The procedure is as follows:
- Entering all collected answers into a table (e.g. in Excel).
- Classification of the respondents into Detractors, Indifferents, and Promoters.
- Calculation of the sum of all answers within the respective group.
- Calculating the percentage: sums of the groups are divided by the total number of answers.
- The percentage of detractors is subtracted from the percentage of promoters.
The result is a single number on a scale from -100 (for all detractors) to +100 (for all promoters). This figure is then used as a benchmark and gives a company an overall impression of its own brand or the service it offers. If the Net Promoter Score is tracked over a longer period of time, negative results can be used to signal to management and executives whether a change of direction or further measures are necessary. For example, it can be identified whether it is worthwhile to reduce prices, improve products, or train employees to actively retain customers. It gives companies a new guideline for future decisions, so to speak.
With our zenloop Online NPS Calculator, the Net Promoter Score can be calculated directly.
Example of a simple NPS calculation
Assume that 200 surveys were answered. The respondents chose the following ratings:
- 50 rated 0-6 (Detractors)
- 80 rated with 7 - 8 (indifferent)
- 70 rated with 9 - 10 (promoters)
To calculate the percentage of promoters, 70 is divided by the total number of survey responses. The result is 0.35 or converted to a percentage - 35 percent. The same method is used to calculate the percentage of detractors, which is therefore 25 percent.
Subtracting the percentage of detractors from the value of the promoters gives a Net Promoter Score of 10.
35% - 25% = 10 (NPS)
Note: Indifferents are deliberately not included in this calculation because their estimated impact is too small.
What exactly does this score mean? The NPS of 10 is not perceived as particularly high at first, but it indicates that there are more promoters. This means that the number of customers who would recommend the company or brand is higher than the number of detractors. Consequently, 10 is generally a "good" score.
However, depending on which benchmarks are used for comparison purposes, this assessment may change in our example.
Interpreting the Net Promoter Score Correctly
For the correct interpretation of the Net Promoter Score the following can be said in general on a scale of -100 to 100:
- Danger zone (-100 to 0): There are more detractors than promoters. Companies with this score may already be losing customers and have a rather negative public image.
- Good (0 to 50): The average NPS is just under 30. Most companies range from 20 to 40. This is a good place to meet customer needs and the number of detractors is limited.
- Very good (50 to 75): A high level of customer satisfaction can be determined here. Companies in this area offer excellent service and regularly exceed the expectations of their customers. There is no reason for concern.
- Excellent (75 to 100): The customer experience and the general customer orientation are an integral part of the brand here and serve as a unique sales incentive (examples: Amazon, Apple or the Four Seasons Hotel)
This link takes you directly to our article "NPS Benchmarks" and tells you everything you need to know about benchmarking with the Net Promoter Score.
Net Promoter Score: The Limits of the Measurable
There are situations where only one method of data collection is appropriate: quantitative or qualitative. When calculating the Net Promoter Score, a combination of both approaches is usually used to arrive at a more conclusive result. The question about the probability of recommendation generates a quantitative data set, as customers are asked to give a numerical value from 0 to 10.
A critical observer could ask the legitimate question whether it is at all possible for respondents to quantify a subjective opinion. In addition, each individual person may also interpret the rating scale differently. People with an optimistic outlook on life tend to evaluate things more positively and vice versa. In cultural circles where the striving for perfection is very pronounced, a maximum score is very rarely awarded, even if there are no concrete suggestions for improvement.
The goal is to obtain a result that is as representative as possible. Nevertheless, a company must be aware that the Net Promoter Score is only an approximate assessment, which is influenced by known or unknown factors from time to time. Therefore, when tracking an NPS over a longer period of time, deviations may occur that are of little consequence in the overall context.
NPS expert Bruce Tempkin advises to only take such deviations seriously if a recurring pattern emerges in the evaluations:
"The metric scale of the NPS is by no means rigid; indifferents are only separated from promoters and detractors by a boundary permeable to both sides. [...] We often see Customer Insight teams wasting their time explaining the smallest movements of their company's NPS, as managers and board members tend to overreact. Instead of aiming for a specific number, one should rather focus on a range of numbers. This way you only have to react if the result is repeatedly outside the spectrum."
Net Promoter Score: Summary and Conclusion
The Net Promoter Score has become the most common KPI (Key Performance Indicator) for measuring customer satisfaction and customer loyalty. An evaluation scale from 0 to 10, combined with a question about the reason for the evaluation, provides valuable information about customer orientation and the growth of a company.
The Net Promoter Score is determined by a simple calculation. In this calculation the shares of promoters (9-10), detractors (0-6), and indifferents (7-8) are determined. To obtain the Net Promoter Score, the percentage of detractors is subtracted from the share of promoters.
The score can be on a scale between -100 and +100. The more promoters a company has, the better its final score. However, the Net Promoter Score alone does not indicate where the problem areas are located. In the survey, the purely quantitative information is therefore perfectly complemented by a qualitative question about the reasons for the assessment. This combination minimizes the weaknesses of both research methods (quantitative vs. qualitative) and ensures a useful result.
In other words: An NPS survey not only uncovers "blind spots" (German: weak points in the company) and the wishes of customers but also scores points with its short survey time. This results in a high response rate and a representative result. The connection between company success and Net Promoter Score is scientifically proven for many industries, as new and better customer strategies can be developed on this basis.
Net Promoter Score with zenloop
Many companies in the most diverse industries, therefore, rely on the NPS software zenloop. Our feedback management platform evaluates not only the quantitative data but also the qualitative data and prepares them appropriately.
The simple use on our website brings you directly to your customer feedback and is very easy to handle. Specify mail and take a big leap forward in today's market research! Or write to us directly. Contact: firstname.lastname@example.org You can find interesting facts about Net Promoter Score and zenloop on our website and in our Resources Hub or on our social media channels.