Optimizing your Net Promoter Score is one of the best ways to improve your customer satisfaction and loyalty. By definition, Net Promoter Score (NPS) is a metric “calculated based on responses to ‘How likely is it that you would recommend our company to a friend or colleague?’” (thanks, Wikipedia!). Most scales will range from 1 to 10 with 1 being extremely unlikely to recommend and 10 being extremely likely to recommend. More specifically, we like to look at NPS as a crucial tool to understanding the relationship strength between you and your customers. While the metric seems simple on the surface, it gives valuable insights into areas of future growth and improvement. We'll show you how to calculate this metric, how to understand it in the context of your industry, and how to apply it to the platforms you're using now.
How to Calculate Net Promoter Score
You can calculate your NPS by subtracting the percent of detractors from the percent of promoters. NPS can be assessed for various time-periods (i.e. day, week, month, year) and, if your NPS is tied to certain products or business units, you can assign a specific NPS for each.
If you’re confused about how to define your percent of detractors and percent of promoters, we’ve included some nifty explanations below:
- The percent of detractors is the proportion of respondents who are unlikely to recommend your product. Often times, this is defined as those who gave your company a score of 1-6 in the survey.
- The percent of promoters is the proportion of respondents who are very likely to recommend your product. Often times, this is defined as those who gave your company a score of 9-10 in the survey.
- Although not included in the calculation, the percent of passives is the proportion of respondents who are neither unlikely or likely to recommend your product. Often times, this is defined as those who gave your company a score of 7-8 in the survey.
- You might be wondering why these classifications are somewhat lopsided (with detractors making up 60% of the scale and promotors making up 20%). This is because you want to make a conservative estimate for those who are loyal and will share your product independently versus those who may require proactive energy (from you) to either encourage outreach or mitigate former issues.
When choosing what to include in your calculations, remember: consistency is key! That means, if, for whatever reason, you define promoters as those who responded 8-10 for the month’s NPS, you should include it in the next month’s NPS as well. Having consistent metrics will allow you to better identify the causes of good or bad performance. For instance, if, over the past few months, you’ve increased your customer service training and NPS also increases, then you’ll know that training improved the customer experience.
Connecting Net Promoter Score to Your Business
Again, as you begin (consistently) monitoring NPS, you’ll be able to find insights specific to your strategy. Of course, it’s also important to understand your NPS in relation to your broader industry. To help you know what to expect, we’ve included a list of average NPS per industry (shoutout to Retently for providing these stats):
- SaaS - 30
- Financial - 34
- eCommerce (B2B Agency) - 48
- Marketing Agency - 61
- eCommerce (B2C) - 62
Further, while you can find your NPS from many channels, we’ve identified a popular platform that is particularly relevant to NPS. This may be a good place to begin if you’re getting started with this metric:
Tracking Net Promoter Score with Lido
While NPS is easy to calculate, it’s important to keep in mind that NPS is one of many valuable metrics to track your performance. If you don’t want to spend hours at the end of the month juggling numbers from your Zendesk and other platforms, consider trying Lido. Lido can help you build a dashboard to monitor your data and give a look into how your key metrics (such as NPS) change over time.