Net Promotor Score (NPS): How satisfied are your customers? Calculation, advantages & criticism

The Net Promotor Score (NPS) counts as a measure of customer satisfaction and the associated customer loyalty. It is a key figure that lies between -100 and 100. In 2003, the NPS was introduced by Bain and Company and has since been used by a large number of companies worldwide. In recent years, the process behind the metric has been greatly simplified, that in fact with just the question “How likely is it that you will recommend company X?” customer satisfaction can be captured.

Calculation & Results

Now you know what the NPS is, but how do you calculate it?

Calculation

Step 1: Ask customers to rate their feedback on a scale of 0 to 10.

Thus, three categories can be derived.

• 0 to 6 means detractors: customers would not recommend the company and may even advise against it
• 7 to 8 means indifferent: customers are not dissatisfied, but do not recommend the company either
• 9 to 10 means promoter: customers recommend your company to others

Step 2: Calculate how much percent promoters and detractors represent.

Step 3: Subtract percentage of detractors from promoters.

Results

Initially, the result only tells whether the company has rather dissatisfied or satisfied customers. Important information can then be gleaned from a comparison with other companies. Amazon, among others, has the highest score worldwide, with a score between 70 and 80. Nevertheless, the goal should not be to blindly aim for a high NPS value, but to continuously increase it.

Advantages of the NPS

In addition to revealing customer satisfaction, the NPS offers other benefits:

• Fast and uncomplicated results
• Customer opinions are identified
• Detractors can be retuned directly
• The NPS value can be compared with other companies

Criticism of the NPS

While the NPS offers many advantages, there are a few criticisms that should be considered:

• Different cultures and industries handle a scoring system differently (e.g. for reasons of politeness)
• The distinction nut between detractors and promoters is a very simplified treatment of customer relations
• Individual reasons are not taken into account
• Additional questions are useful to make the NPS more meaningful