What is NPS?
NPS stands for Net Promoter Score and is a calculation of all the different internal ratings of 1-10 that are received from the submissions of customers. This score provides you a good sense of how your customers view your business and how likely they are to refer you to someone else.
Promoters drive positive growth: They are the most satisfied group and a key asset for businesses.
Passives are neutral but impactful: While not directly factored into NPS, they affect the percentages of Promoters and Detractors.
Detractors indicate areas for improvement: Addressing their concerns can significantly enhance brand perception.
Net Promoter Score (NPS) is a key metric used to measure customer satisfaction and loyalty. It provides actionable insights into how customers perceive your product or service.
NPS categorizes scores into three groups: Promoters (9-10), Passives (7-8), and Detractors (0-6). This breakdown helps businesses understand customer satisfaction at a granular level.
Promoters (9–10): Enthusiastic supporters likely to recommend.
Passives (7–8): Neutral respondents who are satisfied but less enthusiastic.
Detractors (0–6): Unhappy customers who may harm your brand by sharing negative feedback.
Below is an example of how the NPS question is asked in the customer experience.
1. Customer NPS
NPS is a valuable metric for businesses to gain insight into customer perceptions and identify areas for improvement to increase satisfaction and loyalty.
2. Employee NPS
In an organizational context, NPS can measure employee performance, providing data-driven insights into service quality and areas for professional development.
NPS ranges from -100% to 100%, where higher scores represent greater customer loyalty.
All NPS ratings given to an employee give them an understanding of how the customers they serve view their work. In the ApplauseHQ application, leaderboards display NPS scores for individual employees based on customer feedback, helping identify top performers and those needing support.
The accumulation of all internal ratings received provide the company their NPS score.
Here is how NPS is calculated
NPS is calculated using a simple formula: NPS = (% Promoters) - (% Detractors).
Imagine you receive five responses with the following ratings: 10, 10, 10, 8, and 8. Here’s how the NPS is calculated:
Categorize responses:
Promoters: 3 (60%)
Passives: 2 (40%)
Detractors: 0 (0%)
Apply the formula:
NPS = 60% − 0% = 60
In another higher volume example, if you received 100 responses and 50 were Promoters, 30 were Passives, and 20 were Detractors, your NPS score would be 30 (50% - 20%). This means that your company has a higher percentage of satisfied and loyal customers. While Promoter and Detractor scores directly affect NPS, Passive scores do not. This can lead to confusion when only visible feedback is considered, as NPS excludes 7-8 scores in the computation.
NPS is a valuable metric for businesses as it can help identify areas for improvement and measure customer satisfaction over time. It is also a useful tool for benchmarking against competitors and setting goals for customer satisfaction and loyalty.
To correctly interpret your NPS, focus on the scores of Promoters and Detractors exclusively. While Passives do not influence the score, they may still offer valuable feedback when analyzing overall customer satisfaction.
Now that you know how to calculate NPS, you can start using this metric to improve your customer experience and grow your business.
NPS = (Number of Promoter Scores ÷ Total Number of Respondents) − (Number of Detractor Scores ÷ Total Number of Respondents)
We have a downloadable NPS calculator below to help you run a calculation, if you find it helpful.