What is a Net Promoter Score – How to Calculate NPS?

What is a Net Promoter Score – How to Calculate NPS?

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Clients recommending your product and services is the ultimate form of marketing and brand development that exponentially surpasses every other methodology known to humankind. While market technologies will evolve a dozen times a year, metrics like net promoter score, abbreviated as NPS, continue to rule this space because of the unmatched benefits of client recommendations and testimonials. 

It is no wonder that most customer relationship management (CRM) platforms include native tools for net promoter score calculation. This post will explain everything that you need to know about a good NPS score and how to calculate it without any errors. 

What is the Net Promoter Score (NPS)? 

The net promoter score, conceptually, can reflect the probability of clients recommending a specific product, project, service, or brand to coworkers, business partners, friends, and family. Most practical interpretations of NPS focus on customer loyalty and satisfaction. They have become the go-to norms for a standardized assessment of customers’ enthusiasm. The final categorizations reliant on different values in an NPS calculator might be promoters, passives, and detractors. 

Net Promoter Score Definition 

1. Salesforce depicts NPS as a benchmarking tool for customer satisfaction. 

1. IBM considers net promoter score a customer experience (CX) metric revealing how happy customers have been with a company’s products. 

1. Deloitte lauds NPS as a standard measure to understand stakeholders’ holistic experience with an enterprise. Furthermore, it acknowledges eNPS that applies similar calculations to gauge employees’ willingness to recommend employers’ products and the workplace as a great place to work or GPTW to other professionals in their network. 

1. Gartner’s marketing glossary denotes the net promoter score as a key performance indicator (KPI). Accordingly, you can deem it essential to assess overall customer satisfaction. This includes depicting how likely consumers will inform their peers about a company. 

Read more: What is Customer Experience Management - Definition, Examples, & Strategies 

Net Promoter Score Meaning 

Despite being the trademarks of Bain & Co., Satmetrix Systems, and Fred Reichheld, NPS has become universal across all CX and CRM software tools. This metric’s meaning depends on the difference between detractors and promoters. As a result, understanding what each company’s net promoter score means necessitates acquiring knowledge of how to calculate this score without inconsistencies. 

Nevertheless, the three profiles under which customers must be categorized to calculate NPS and assess the final score indicate the following trends. 

Detractors 

Detractors exhibit remarkable dissatisfaction. They have many pain points and frustrating experiences that make them actively discourage others from using your products and services. They will also be more likely to fuel any controversial media coverage about your firm or advocate your rivals’ offerings. Investing more effort into converting them will probably be extremely wasteful. 

Passives 

Passives are less likely to criticize what you deliver. However, they are not necessarily brand loyalists. Once another entity providing identical services enters the market, passive customers will be open to experimenting with those alternatives. Moreover, they can swiftly discontinue using your offerings when better deals appear. Brands must continuously innovate and employ a mix of retention strategies to engage the passives. 

Promoters 

Promoters will stay by your side no matter the market shifts. They have used your products for a significant duration. As a result, you will require less effort to retain them and encourage them to buy from you on a recurring basis. It will also take very little incentive to turn them into brand champions or micro-influencers through virtual means like social media posting contests. They will also make your in-person events a noteworthy success. 

Pro Tip: Never Take Promoters for Granted 

Remember, promoters know a lot about your product specifications, pricing changes, press releases, and future plans. That is why you must never take them for granted. Otherwise, it will be a misuse of their faith in your brand. They demonstrate brand loyalty because your offerings have served them well. Failing to listen to their feedback or forcing them to adopt too many changes in a shorter time will make them dislike you with as much passion as that of detractors. 

Read more: What are Primary Research Methods and Techniques? 

The NPS Calculation Process 

Enterprises will inform customers about a straightforward survey comprising a 0-10 scale. They will categorize them as detractors if customers rate the company between 0 to 6 points. Likewise, passives include those assigning you 7 or 8 points. On the other hand, if they choose 9 or 10 on this scale, companies label them as promoters. Later, calculating respective percentages will be necessary. 

Step-by-Step Guide to Calculating NPS 

Step #1: Create and Share Survey Questions via Reliable Channels 

Design a clear, concise survey question to inquire customers about their interest in recommending your business. Let them freely select points on a 0-10 scale. Ensure responding to this question and submitting the responses is not a slow, data loss prone process. In the case of email and SMS responses, assuring correctness of survey results will be less dependent on internet stability or company servers’ efficiency. Meanwhile, hosting online, cloud-assisted surveys will require adequate computing resources to avoid CX disruptions due to server-side or connectivity issues. 

Step #2: Recognize Detractors, Passives, and Promoters 

Classify customers as detractors when they submit 0 to 6 ratings. Those responding to the survey question with 7 or 8 points must be tagged as passives. These customers might stay with your branded offerings for now. However, they will switch to your rival’s products and services for better deals or advanced features. Finally, all clients inputting 9 or 10 are your organization’s promoters. 

Step #3: Calculate Percentages 

Percentages of promoters and detractors allow for quantifying NPS values. You want to subtract the actual percentage of detractors from the percentage of promoters. Since businesses with misleading marketing tactics, poor post-purchase support, and unethical processes will have more detractors, a negative net promoter score due to the higher detractor percentage is not unexpected. 

The NPS range, therefore, can be -100 to +100. If NPS is getting closer to the former value, this trend signals a gradual increase in detractors. Conversely, if you arrive at a positive NPS, this score implies good CRM performance. It might prove that enhancing CX, helpdesk personnel’s communication expertise, and product functionalities have been excellent catalysts for sustainable growth. 

Net Promoter Score Calculation: Formula to Calculate Your NPS 

Many wonder what you need to calculate the NPS score when they first come across this metric. However, as stated earlier, the net promoter score relies on a simple yet profound measurement approach. Stakeholders do not need to learn advanced statistics and calculus to estimate NPS and discuss related trends over time. Consider the following formula that powers every NPS calculator. 

Net Promoter Score (NPS) = [ % Promoters ] – [ % Detractors ] 

Alternatively, stakeholders can expand it as: 

NPS = (Total Promoters/ Total Survey Participants) – (Total Detractors/ Total Survey Participants) 

Example: How to Calculate Net Promoter Score (NPS) 

• Imagine a company conducting a market research survey. Think of 400 survey participants. 

• Out of them, 120 customers select 0 to 6 points. Therefore, 30% of respondents will be detractors. 

• At the same time, assume that 144 other customers choose 9 or 10 when asked whether they will recommend the company to their friends, family, and other professionals. These are the promoters. So, the percentage of promoters will be 36%. 

• Since 136 would have chosen 7 or 8 based on the above details, the company has 34% passives. 

• According to the aforementioned formula, you can safely ignore the percentage of passives. 

• Now, the difference between the percentage of promoters and that of detractors will be 36 – 30 = 6, which will be this company’s NPS. 

• However, this score is not a good NPS. The company must work toward addressing customer pain points to turn passives into promoters. That will be easier and quicker. 

• Meanwhile, reducing the detractors will demand expert guidance and many resources with more difficulties. This activity will also take longer. 

• So, a multi-pronged CX strategy will be indispensable to ensuring progress in these initiatives. 

Net Promoter Score Calculator 

An NPS calculator can be a native feature in market research tools, CRM software suites, or online services. It will request stakeholders to feed data on the total respondents and their responses to survey questions related to promoter identification. If this calculator has automation capabilities, companies will not have to enter data through manual methods. 

For instance, technologies that unify all activities integral to conducting market research surveys, like primary and secondary data sourcing, might eliminate the need for procedural data entry. Those platforms will continuously update net promoter score dashboards as the survey progresses, reflecting trends as soon as new participants submit their answers. 

An ideal NPS calculator must be accessible from anywhere and not be restricted to a device form factor or operating system. Gone are the days of manual data entry and being irritated due to vendor lock-ins. Therefore, proprietary tools aiding in net promoter score calculation must not prevent users from exporting data. Adding analytics or alternative CRM functionalities from other vendors must also be seamless without compatibility issues or data loss risks. 

Read more: Top Market Research Companies in India 2025 

Tools and Methods for Measuring NPS 

1. Survicate

Survicate S. A. is a private Polish company. Its tools assist small and micro enterprises in net promoter score calculation across Europe, Middle East, Africa, and other regions. Its surveying capabilities let client organizations utilize emails, mobile apps, feedback buttons, website embedding options, and more features for gathering customer responses. Survicate also offer multi-lingual market research survey tools and integrate artificial intelligence (AI) to streamline processes. 

2. Survey Kiwi

Survey Kiwi swiftly integrates with Google Analytics and workbook management software. It serves the CRM needs of the firms in human resources, retail, event organization, hospitality, and education industries. With a solid presence in Latin America, Survey Kiwi has helped increase the adoption of primary market research methods. 

3. SurveyMonkey

This Californian market research and NPS survey enabler supports engagement analytics useful to assess customer, employee, and student satisfaction. Whether you want to calculate the margin of error or explore sample size requirements, SurveyMonkey has versatile tools to do these activities. This platform targets organizations in technology, education, financial services, public administration, and healthcare domains. 

What is a Good Net Promoter Score? 

Determining if an enterprise’s calculated NPS qualifies as a good net promoter score can be overwhelming. After all, stakeholders must consider the industry statistics and refer to a reputed framework to have an informed perspective about this. Under all frameworks and encompassing all industries, a positive NPS is desirable. It indicates detractors are less than promoters. 

NPS that might seem reasonable in one industry might be suboptimal in another sector. Likewise, the sample size in each survey will impact the relevance, precision, and practicality of the net promoter score calculation. If stakeholders fail to account for these aspects, inaccurate NPS insights can mislead decision-makers about marketing effectiveness and CX-CRM improvements. 

Good NPS Sore: How Frameworks Break It Down 

Note: All the framework providers occasionally conduct broader studies to define benchmark NPS values relevant per industry. The following discussion focuses on the general criteria for a good NPS where a score is the only basis, regardless of the industry. 

1. Retently’s methods consider a score of 0 to 30 as a good NPS. If a company has a score between 30 and 70, it has a great net promoter score, while 0-100 values are considered excellent. 

1. The recommendations by Bain and Co. might label a score of 0 to 20 as a good NPS. Values between 20 to 50 indicate a favorable net promoter score. If the NPS falls between 50 to 80, it will be excellent. For scores between 80 and 100, the NPS will be world-class. 

1. Finally, independent researchers and regional standards can consider an NPS above 60 or 70 as a good net promoter score based on the industry to simplify comparison and reflect real-world industry growth challenges. 

It is likely that above values will be periodically updated as industry research increases and more stakeholders contribute to the surveys. Corrections concerning sample size, industry norms, geolocation, and company type can lead to a score of 34 or 55 being the indictor of a good NPS. These nuances necessitate expert-supervised data collection methods for reliable results. 

Key Takeaways About NPS and Its Value 

1. The formula that everyone needs to calculate NPS is straightforward. However, its significance lies in its simplicity, which makes it easier to communicate with all stakeholders. 

1. Complications concerning sample size sufficiency and industry-level benchmark NPS values can demand additional effort.  

1. Multiple frameworks are available to calculate a good NPS. 

1. Stakeholders can utilize AI-powered market research survey tools to streamline the net promoter score calculation. 

1. Finding detractors, passives, and promoters can help estimate customer engagement risks early on. Later, you can upgrade retargeting and retention methods to focus on an NPS boost. 

Conclusion - Net Promoter Score 

Net promoter score calculation involves conducting market research surveys for primary data sourcing to find the difference between promoters and detractors. It has become the standard technique for comparing enterprises that offer identical services and products based on customer enthusiasm. As a result, it continues to empower decision-makers to examine whether their CX, CRM, and post-purchase assistance have improved customer retention. 

A leader in the market research domain, SG Analytics employs versatile technologies that equip global enterprises with holistic, actionable insights. Contact us today if you seek scalable analytics support and outcome-oriented strategies to ensure exceptional NPS improvements.       

About SG Analytics       

SG Analytics (SGA) is an industry-leading global data solutions firm providing data-centric research and contextual analytics services to its clients, including Fortune 500 companies, across BFSI, Technology, Media & Entertainment, and Healthcare sectors. Established in 2007, SG Analytics is a Great Place to Work® (GPTW) certified company with a team of over 1200 employees and a presence across the U.S.A., the UK, Switzerland, Poland, and India.      

Apart from being recognized by reputed firms such as Gartner, Everest Group, and ISG, SGA has been featured in the elite Deloitte Technology Fast 50 India 2023 and APAC 2024 High Growth Companies by the Financial Times & Statista. 

 

Also read: What is an ESG Score? - Definition & How to Calculate ESG Score 

FAQs - Net Promoter Score (NPS) 

Q1. What is a Good NPS Score? 

Answer: Good NPS is always positive, ranging between 0 to 100%. A positive score suggests that the number of promoters is greater than that of detractors. Still, several frameworks differ in how they further break down NPS types. A good net promoter score is also affected by the company’s industry averages, operational scale, regional considerations, and sample size. 

Q2. How Often Should Businesses Measure NPS? 

Answer: If a business expects recurring customer engagement, increasing NPS calculation frequency becomes necessary. Otherwise, small and micro firms that have shorter customer lifecycles can find semi-annual net promoter score calculation sufficient. On the other hand, established organizations serving multiple markets might deem even the quarterly NPS estimation insufficient. Additionally, NPS measurement frequency must increase before, during, and after a major business transformation or a new product launch. 

Q3. Can NPS be Used for Small Businesses? 

Answer: Net promoter score is undoubtedly essential to small businesses as they thrive on customer loyalty and cannot afford a high churn rate. Small firms are either in their growth phase or serve a niche stakeholder base. That is why they are also more vulnerable to external threats and require promoters to compete with bigger brands. However, small business owners can reduce the scope and frequency of NPS-focused surveys based on budget restrictions. 

Q4. Is There a Difference Between NPS and Customer Satisfaction Surveys? 

Answer: NPS surveys rely on one question, while customer satisfaction (CSAT) score determination requires a more exhaustive questionnaire. The former focuses on the possibility of customers being supportive of promoting the brand they love. Meanwhile, the latter is more specific about what customers opine after using a product, service, or helpdesk. CSAT assessments aid in detecting consumer pain points with granular details. NPS surveys describe overall appeal or perception.  

Q5. How Do You Respond to Feedback from Detractors and Promoters? 

Answer: While detractors might exhibit intense emotions, acknowledging their pain points and promptly apologizing can help. In addition to showing empathy, your helpdesk teams must offer detractors practical and relevant solutions instead of copy-pasting overused phrases. Assigning a timeline and periodically communicating service request status as a follow-up routine can do wonders in turning detractors into passives or promoters. Remember, it is a slow and arduous process. 

Similarly, you must never neglect the praise and ideas that promoters offer. Thank them for their contributions. Ask them to share their experience with their loved ones. Seek more details about their creative concepts about future updates or product designs. 

Q6. Is NPS Relevant in Non-Customer-Facing Industries? 

Answer: Net promoter score use cases might seem more suitable to business-to-customer (B2C) organizations. Still, corporations can modify the NPS formula to explore employees’ job satisfaction or suppliers’ willingness to aid branding initiatives. Besides, non-consumer-facing industries can refer to industry benchmarks regarding NPS that focus on business-to-business (B2B) relationships. Note that B2C surveys inevitably capture 1000 or more responses. Getting similar sample sizes for B2B-focused NPS insights is daunting, necessitating multiple collaborations with industry peers and professional bodies. 

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