Kudos to you if your company is planning a Net Promoter Score (NPS) survey to assess customer loyalty and engagement. Customer loyalty is crucial for sales, considering that personal recommendations are the top driver of consumer purchase decisions across every stage of the buying cycle.
But now you might be wondering, What’s a good NPS score?
The answer to that question isn’t as straightforward as you might think.
In this article, we’ll explain how to determine whether or not an NPS is good (or not so good) and, if you haven’t already begun surveying, show you a software product you can use to gather data to calculate it. But first, let’s quickly review the NPS formula.
How do you calculate a NPS?
Business strategist Fred Reichheld developed the Net Promoter Score metric in 2003 with assistance from his colleagues at Bain & Company. Organizations in every industry have used it since then to better understand the relationships their customers have with their business.
At the heart of an NPS survey is one simple question:
How likely is it that you would recommend our company/product/service to a friend or colleague?
To answer, respondents choose a rating on a scale of 0–10, with zero being the least likely to recommend, and 10 being the most likely.
Based on respondent data, you can then calculate your NPS metric using Reichhold’s simple formula:
Total % of promoters – total % of detractors = Net Promoter Score
Here’s what the values mean:
- The percentage of promoters are those who responded to the survey with a score of nine or 10.
- The percentage of passives are those who responded to the survey with a score of seven or eight.
- The percentage of detractors are those who responded with a score of zero to six.
Note that in a simplified calculation, the number of passives isn’t included; some organizations do include it in a more complex calculation.
Using the simple calculation, if 30 percent of your organization’s survey respondents answered nine or 10 (promoters), and 10 percent answered in the zero to six range (detractors), then your NPS calculation would be
30 – 10 = 20
What’s a good NPS score?
Different industries have different NPS benchmarks. Most organizations compare their NPS score to their industry-specific benchmark to determine how they’re doing compared to their competitors. Others like to compare their NPS to scores in businesses from all industries.
According to Bain & Company, the following is a general rating of Net Promoter Scores:
- Any score above zero is considered good.
- Any score above 20 is considered favorable.
- Any score above 50 is considered excellent.
- Any score above 80 is considered world-class.
However, industry ratings vary widely; your industry’s specific rating ranges will likely impact your goals.
Qualtrics, a leading experience management firm, offers NPS benchmarks in 20 industries, and the benchmark scores vary from -7.1 to 28.2, as shown in the graphic below. As you can see, what’s considered “good” for one industry is very different from what’s considered “good” for another.
How can you calculate NPS easily?
The Net Promoter Score revolutionized the way businesses understand their customers, and you can use this metric in your own business. Surveying customers is easy with Jotform’s ready-to-use NPS template. You can use it as-is or customize it based on your business’s needs using our simple drag-and-drop editor.
You can also use Jotform Tables, a powerful spreadsheet-database, to make sense of the collected data and get your overall NPS score. If you want visual representations of your data, check out Jotform Report Builder. It automatically generates reports based on your NPS form responses, so you can glean business insights more easily.
If you’re curious about what your customers think about your business and whether they’re likely to recommend you to their friends and colleagues, Jotform can help you figure it out.
Net Promoter®, NPS®, NPS Prism®, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., NICE Systems, Inc., and Fred Reichheld. Net Promoter ScoreSM and Net Promoter SystemSM are service marks of Bain & Company, Inc., NICE Systems, Inc., and Fred Reichheld.
Photo by Andrea Piacquadio