Calculating NPS to Boost Your Business Growth

BY QDegreesPUBLISHED
Nov. 19, 2024

Being a business, it is not possible for all your customers to like you. There are some who will love your brand, and others won’t. Moreover, there are also some buyers who won’t have any opinion on your business. But is it important to keep track of this data related to your consumers? Well, the answer is absolutely yes. It is because knowing how your customers feel about your brand opens the door to one of the most important KPIs, known as customer loyalty.

Customer loyalty plays an important role in quantifying your brand's emotional connection with the customers. Moreover, it gives you an edge to grow your sales as well as increase your profits. But how will you get to know about the loyalty of your customers? This aspect is resolved through the Net Promoter Score, which helps to calculate customer satisfaction and loyalty. So, through this blog, let’s learn more about how to calculate net promoter scores to boost your business strategies.

Net Promoter Score Formula

Calculating net promoter score can seem to be a hard task, especially if you think that you’ll have to interact with a huge consumer base to analyze how they feel about your products and services. In contrast, calculating NPS is very simple due to the use of the below-mentioned NPS formula.

[(Number of promoters-Number of detractors)/Total number of responses]*100

Before diving into the formula, you need to collect responses from your consumer base, which can be done easily through an NPS survey. In this, you ask your customers to rate aspects of your business on a scale of 0-10. Once you get the responses, you need to segregate them into three categories- promoters, detractors, and passives. What is the basis of this segregation? Let’s find out.

Promoters

These are the people who give a rating of 9-10, which is the best rating you can get. Their ratings highlight their satisfaction with your brand. Moreover, these are the people who are likely to promote your business to their relatives and friends. So, you can try to know what these people like about your business and categorize it as strong points for your company.

Detractors

People who give a rating from 0-6 are categorized as detractors. They will probably not buy your products and services in the future. This rating is usually given due to some dissatisfaction in their customer journey. So, it is important to inquire about the reason and focus seriously on improving those areas.

Passives

Now, this is a term that you cannot find in the formula. However, it is present there as it is included in the total number of responses that you get. So, how do passives matter? Firstly, passives are the people who give a rating of 7-8. It indicates that they will probably not promote your business, but they will not badmouth it. However, they play an important role in your net promoter score because if you are able to convert these passives and promoters, it will have a positive outcome. Hence, a company must focus on converting their passive customers into promoters in order to increase their customer loyalty.

Each of the above-mentioned categories of people will influence your net promoter score. Moreover, you can also calculate your NPS score through an even simpler formula-

NPS = percentage of promoter-Percentage of detractors.

Related Post : Understanding Customer Lifetime Value: A Complete Guide

How to Calculate Net Promoter Score?

Now that you are aware of the Net Promoter Score Formula let us explain how to calculate it using an example.

Suppose you conducted an NPS survey and got 100 responses; you need to separate these responses as given below-

Total responses- 100

Promoters-60

Detractors-20

Passives-20

After sorting the responses, the next step is to calculate the percentage of promoters and detractors.

Percentage of promoters- (60/100)*100= 60%

Percentage of detractors- (20/100)*100= 40%

You can use this data and put it in the formula to get the final NPS score.

Different Ways of Calculating NPS Score

Once you’ve conducted the survey, you can choose one of the following ways to calculate the Net Promoter Score.

Calculation Through Excel Sheet or Spreadsheet

If you are working with raw data that consists of just numbers between 0-10, then an Excel sheet or spreadsheet is an ideal way of NPS calculation. Moreover, you also get pre-made templates that can be used for this calculation. All you have to do is enter the data, and it will give you the percentages of promoters, detractors, and passives. Finally, it will also provide you with the NPS score.

Website for Net Promoter Score

While working with large datasets, an Excel or spreadsheet won’t suffice. In such a case, you can always visit online NPS calculator websites. For instance, you can use Q degrees’ online NPS calculator. Once you visit their site, you will find three scales. The first one is for detractors, the second for passives and the third for promoters. Here, you need to fill in the number of responses that you get for each rating from 0-10. So, if you have 4 people rating you 0, then enter 4 under 0 and so on. Once you enter this data, the calculator will automatically give you the percentages of each category and let you know the NPS score.

Comprehensive Survey Tools

You can also choose a comprehensive solution that covers all your NPS needs. For this, you need to get a net promoter score software that will offer you more than just NPS calculation. You can use Survey CXM from Degrees, which will help you to create surveys, launch them on different channels, and provide insights as well. So, it is a one-stop solution for all the NPS needs.

Conclusion

By asking your customers to rate your products and services, you can gauge their loyalty. It helps you to calculate the growth of your business and also helps you make informative decisions and effective strategies.