NPS stands for Net Promoter Score, which is a metric used to measure customer loyalty and satisfaction. It is based on the question "How likely are you to recommend our product/service to a friend or colleague?" with a rating scale from 0 to 10.
To calculate NPS, customers are asked to rate their likelihood of recommending a product or service on a scale of 0 to 10, where 0 means they are not likely to recommend it and 10 means they are extremely likely to recommend it.
Based on their responses, customers are then divided into three categories:
Promoters (9-10 rating): These are customers who are extremely likely to recommend the product/service to others.
Passives (7-8 rating): These are customers who are satisfied with the product/service but may not be as enthusiastic as Promoters.
Detractors (0-6 rating): These are customers who are not satisfied with the product/service and may even discourage others from using it.
The NPS score is then calculated by subtracting the percentage of Detractors from the percentage of Promoters. The Passives are not included in this calculation.
For example, if you receive 100 responses with the following ratings:
50 customers rated 9 or 10 (Promoters)
20 customers rated 7 or 8 (Passives)
30 customers rated 0 to 6 (Detractors)
The calculation would be:
NPS = (% Promoters) - (% Detractors)
NPS = (50/100 * 100) - (30/100 * 100)
NPS = 20
In this case, the NPS score would be 20. A positive NPS score (above 0) is generally considered to be good, while a negative score (below 0) suggests that improvements are needed. A score of 50 or higher is considered excellent.
Your account's NPS setup can be found here.