Step by Step Guide To Calculating Net Promoter Score

Nov 15, 2019

6 mins read

Tanuj Diwan

Calculating the Net Promoter Score is critical to gauge your customers’ satisfaction and loyalty. 

And trust me it is no rocket science! 

To calculate your NPS score, all you need to do is,

STEP 1: Ask your customers how likely they are to recommend your product to others. 

STEP 2: Then, categorize their responses into promoters (9-10), passives (7-8), and detractors (0-6). 

STEP 3: Subtract % of detractors from % of promoters. 

STEP 4: At last, benchmark your NPS Score.

Or instead, use the below calculator 😉

The NPS score can be anywhere between -100 and +100.  

Now that you know your NPS Score, what is the next step? 

Is your NPS score good or bad? If it is 73, it is surely a good number. But what if your NPS score is 28. Is it bad? Not necessarily!

There are two methods to know this!

1. Absolute Method: 

This method helps you to make your NPS score an internal benchmark. Any positive integer can be deemed to be a good NPS score since it indicates the overall positive sentiments of customers towards the business. 

But to gain a competitive edge in customer experience, all your teams need to work fiercely to boost this number and compare it with the Industry Benchmarks. 

2. Relative Method:

This method helps you to understand where you stand against your competitors. Comparing your NPS Score with the Industry Benchmarks tells you how outstanding or poor your customer experience is against your competitors.

What is a bad NPS Score?

Let’s say you’ve got -25. This is a negative NPS Score.

A negative NPS score means that you have more unhappy customers than those who enjoy your products or service. Simple!

Telecommunications giant Comcast has traditionally had poor NPS scores. It had a score of -3 in 2019. In fact, their customer service is considered so shoddy that they even had to promise US senators in 2016 that they would fix its service issues. Sadly, their NPS score is still in the negative.

So, what should you do to improve your NPS Score? 

We’ve got you covered! 

Here are the 11 surefire strategies that can help you increase the Net Promoter Score.

How to increase Net Promoter Score

Click here to deep dive into these awesome strategies!

Now, what is a good Net Promoter Score?

As a thumb rule, if the NPS score is less than 20, it is a cause for worry. In other words, an NPS score above ‘20’ can be considered to be good, anything above ‘50’ is great, and anything above ‘70’ is excellent. 

However, the average NPS varies significantly from industry to industry. So, what constitutes a good NPS score for the hospitality industry may not apply to the retail industry.

The best approach is to identify the NPS scores of your competitors so you know where you stand.

Benchmark your NPS Score

This is why benchmarking your NPS score becomes important.

Compare your NPS score with the industry average. 

The NPS scores vary by industry. It is relative. There are a lot of factors associated with it. This is why benchmarking your NPS score becomes important. If yours is a SaaS business, you should not compare your NPS score with an insurance company’s score.

You also should take geographies and countries into account as well. There are countries like Japan where the people usually give low ratings because it is considered rude to rate a business as either too good or too bad.

The survey channel and the methodology that you used to conduct the survey will have an impact on the NPS score as well. Use your previous NPS score as a benchmark. If you see the number improving, then you are on the right track.

To get a brief idea of where your business stands in terms of NPS, you must know the industry benchmark. A good resource to go to for this information is the 2020 Satmetrix Net Promoter Benchmarks report (for US consumers).

The survey was conducted for 190 brands in 23 industry sectors covering a whopping 66,000 respondents. Based on the survey, the NPS benchmark was derived as under:

NPS 2020 Benchmarks

Use this data to drive success!

Use our NPS template to create an efficient survey

Here are some Frequently Asked Questions on Net Promoter Score Calculator:

1. How to calculate the Net Promoter Score?

Net Promoter Score can be calculated by the following formula

NPS = % of Promoters – % of Detractors

Let’s say you sent the Net Promoter Score surveys to 100 customers and the results are like this.

60% are Detractors 

35% are Promoters, 

then your NPS score would be 

35% Promoters – 60% Detractors= -25 

2. What is the average NPS score for software companies?

According to the 2020 Satmetrix Net Promoter Benchmarks report (for US consumers), the average Net Promoter Score for the software companies is 34.

3. Is Net Promoter Score useful?

Here are 9 strong reasons why you shouldn’t ignore the Net Promoter Score.

  1. The NPS question is the most simple feedback question there is. 
  2. Measuring the loyalty of your customers is what NPS does best. 
  3. It is found that a 7 point increase in NPS leads to an average 1% increase in revenue.
  4. NPS can help you point a finger at the many probable reasons why customers could be leaving. 
  5. The qualitative feedback from the follow-up question assists you in prioritizing your product roadmap, keeping your existing customers happy, and boosting your retention rate.
  6. NPS helps you identify promoters, who are more likely to recommend your product to their friends and family, this is when you can upsell.
  7. It helps you convert customers into brand advocates.
  8. It helps you to identify disappointed customers as soon as they give you their feedback allowing you to connect with them immediately and resolve their issues. 
  9. NPS helps you keep a pulse on the customer’s health.

4. What is a good Net Promoter Score?

Any positive integer is a good NPS score as it shows that the customers are positive towards your brand. However, the average NPS score varies from industry to industry. What may be a good NPS score for the software industry may not apply to the airline industry.

5. Can NPS be negative?

Yes, NPS can be negative. 0 or any NPS score below 0 is a negative NPS Score. It means that you have more unhappy customers than those who enjoy working with you.

6. How do you analyze NPS? 

Here are 6 ways to analyze your NPS Score:

  1. Categorize your respondents into promoters, passives, and detractors.
  2. Analyze feedback sentiment with sentiment analysis.
  3. Run text analysis on the open-ended feedback to identify trends.
  4. Identify the root causes.
  5. Identify the survey channel that works best for you.
  6. Benchmark NPS internally and with the industry average.

7. What is the range of NPS Score? 

The NPS score can be anywhere between -100 and +100.

8. How to increase the Net Promoter score?

You can improve your Net Promoter Score by

  1. Talking to the detractors and resolving their issues.
  2. Getting passives to your side
  3. Make promoters love you more and convert them into brand advocates.
  4. Reach out to the non-respondents

Click here to know more awesome strategies that will help you increase your NPS Score.

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