While math isn’t something I normally associate with customer success, data collection and analysis has helped inform my strategy and make improvements to my customer experience.
In customer service, a great way to collect and analyze data is by figuring out your Net Promoter Score® (NPS) data.
In this post, I’ll explain how you can calculate Net Promoter Score to benchmark customer satisfaction and identify opportunities for customer delight.
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Net Promoter Score is a customer success metric that measures customer satisfaction and loyalty. It was created by Bain & Company in 2003 and is widely used by both B2B and B2C businesses.
By learning more about your customers and collecting their feedback, you can identify customer behaviors and challenges proactively — and reach out to empower them to succeed, instead of waiting for them to call you with a problem.
If you‘re like me and need a little help with the math, let’s walk through this calculation using the formula and steps below.
Here's the formula for NPS:
Or, for a more visual representation, use this handy graphic.
Let's see this in practice with hypothetical numbers, shall we?
If you survey 100 customers, and the result is made up of 70 promoters, 10 passives, and 20 detractors, your NPS would be 50.
As the above calculation illustrates, 70% - 20% = 50%
Now that we know the information that we need to gather, let's review how you can calculate this metric using a four-step process.
While calculating NPS may sound a little complicated, you can actually measure your brand’s score in a few simple steps.
Ask your customers, “On a scale of 0-10, how likely are you to recommend us to a friend?” Then follow up with, “Why did you give that score?”
You can send this question in various ways: a survey, an email after a customer interaction, a pop-up notification, or a social media poll.
To get an accurate NPS, ensure you ask the above question and provide a 0-10 numerical scale that customers can choose from. Adding a blank field for customers to explain their score is a good practice. While this qualitative feedback doesn't affect your NPS directly, it highlights areas for improvement to raise your overall score.
For example, Casper sent me this email survey after I made a purchase:
After the brand asked the standard NPS question, it then offered a space for me to explain my rating.
💡 Top Tip: Use HubSpot's Customer Feedback Software to truly understand your customers with custom surveys and feedback tools. Create tailored surveys with diverse question types and a customizable template. Distribute them via web link or email, and share the insights with your team
Once you've collected responses to the question, tally how many answers you have in each of the following categories:
As you may have already guessed, promoters are happy customers who will sing your praises to friends and family. Detractors are unsatisfied. They might churn and could dissuade potential new customers from learning more about you. Passives aren‘t highly satisfied, so they’re at risk of switching to a competitor.
Next, you'll need to find what percentage of your respondents are promoters and detractors.
To do this, divide the number of people who rated you positively by the total number of respondents. Then, repeat those steps for people who rated you negatively.
Using the same example we did above, if you surveyed 100 people and 70 gave a promoter score, you would have 70% of promoters. If 20 people gave negative scores, you'd have 20% of detractors.
Be sure to convert your decimals into percentages, as you'll need values for the next step.
Subtract the detractor percentage from the promoter percentage to figure out your NPS. So, if you survey 100 customers, and the result is made up of 70 promoters, 10 passives, and 20 detractors, your NPS would be 50 (70% - 20% = 50%).
Calculating your company's NPS manually can feel overwhelming, especially with loads of customer feedback data.
HubSpot offers a Customer Service Metrics Calculator to simplify this process. This handy tool lets you quickly determine your business's key metrics and KPIs for customer support, service, and success — NPS included.
Download: HubSpot's NPS score calculator
When I tried the NPS score calculator, I found it incredibly user-friendly and efficient. Here’s how I use it:
I gather responses from a recent customer survey and categorize them into promoters, passives, and detractors. Continuing with our previous example, let's say I have 20 promoters, 10 passives, and 20 detractors.
I input these numbers into the calculator: 70 for promoters, 80 for passives, and 20 for detractors. The tool automatically calculates the total number of responses, which in this case is 100.
With the data entered, the calculator immediately shows the NPS. In my case, it was 50. This instant feedback helps me quickly grasp our current customer sentiment.
At this point, you're likely wondering what a good net promoter score might be.
Bain & Company, the creators of the NPS metric, say that an NPS above 0 is good, above 20 is great, and above 50 is amazing. Scores of 70 or higher put you in the top percentile. However, NPS varies by industry, so you’ll want to take that into consideration when measuring success.
So, now you know how to measure NPS. But what do you do with it next? How do you use this data to improve outcomes for your customers? Below are some questions you should ask to contextualize the score.
Your customer NPS gives you an idea of the level of customer satisfaction you've achieved. A higher NPS means more promoters (i.e., happy customers) when compared to detractors (i.e., unhappy customers).
This is an important metric to track because an NPS® has a customer lifetime value that's 600% - 1400% higher than a detractor.
Customer NPS gives you a solid benchmark to judge your customers' perceptions, and depending on how high — or low — the number is, you can take action. If your NPS is low, why is it low?
And if your NPS is high, awesome. How are you going to capitalize on that to boost your business even further?
Tracking customer NPS over time helps you see if their perception of your company is on the rise or taking a dive. An increasing NPS means you‘re making customers happy. But if you notice a dip or more passives than promoters, it’s time to dive into your customers' qualitative feedback.
NPS surveys are usually accompanied by a space for respondents to answer why they gave the score they did, and this information can be just as valuable as the score itself.
Customers might point out easy fixes or suggest major overhauls. While you don't have to act on every piece of feedback, if multiple customers consistently bring up similar requests and complaints, it could highlight necessary changes that would have a lot of impact.
One of my favorite examples of tracking NPS over time comes from Taylor & Har — a London-based jeweler specializing in bespoke engagement rings set with ethically sourced diamonds. After making NPS its key metric, the company grew by 2x.
After analyzing its NPS data, Taylor & Hart learned that its product consistently scored lower than the customer service NPS. In other words, customers were satisfied with their service but not the product. Recognizing this trend, the brand revamped its manufacturing process, including logistics and delivery.
Additionally, Taylor & Hart tracked NPS over time to identify patterns in popular ring designs, top customer types, and specific geographical areas. This data helped it optimize its advertising campaigns, resulting in a 70% revenue increase.
The answer to that question will require a lot of analysis and introspection. It‘s likely you won’t be able to make those changes overnight. However, the qualitative NPS feedback you receive can start a conversation about new products and services, company policies, or promotions you could offer to improve customer perception — thus making them more likely to recommend you to a friend.
That way, you'll earn more promoters, who will earn you more business by way of referral marketing.
This is important because growing companies prioritize customer success and use an NPS tool to focus on increasing retention rates. Why, you may ask? Because increasing retention by 5% actually increases profits anywhere from 25% to 95%.
There are two types of NPS surveys based on when and how they're sent to customers: Relationship and Transactional.
If you have long-term business relationships, consider sending automated NPS surveys every month or quarter to ensure customer satisfaction. This is also useful in collecting and implementing feedback that might keep customers from canceling in favor of a competitor's solution.
Baremetrics excels at using relationship NPS surveys. It regularly reaches out to its long-term promoters, thanking them for their feedback and asking for customer referrals. Like this:
In this case, a Baremetrics customer service rep sends a thank you email to a promoter for completing the NPS survey and then kindly asks the customer to spread the word about the company. They even provide a pre-written Tweet the customer can simply copy and paste to their account.
This is a great way to build stronger relationships with your loyal customers as well as leverage their experiences for customer advocacy.
Transactional surveys are triggered by specific events in the customer lifecycle, such as after a purchase, a customer service interaction, or a period of inactivity. You can use your CRM and marketing automation tools to identify the best moments to send these surveys, ensuring you capture timely feedback.
The key difference between the two types of NPS surveys (transactional vs. relationship) is that the relationship survey is meant to regularly gather feedback from long-term customers.
Reflecting on my NPS journey, I‘ve seen firsthand how powerful this metric is for enhancing customer retention and building stronger relationships. By diving into NPS data, I can spot potential issues early and ensure customer satisfaction. This proactive approach doesn’t just keep customers happy — it also solidifies their loyalty to the brand.
Net Promoter, Net Promoter System, Net Promoter Score, NPS and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.
Editor's note: This post was originally published in July 2017 and has been updated for comprehensiveness.