Net Promoter Score (NPS): What Is It & How to Calculate

by The MNTN Team

4 Min Read

A brand’s net promoter score (NPS) is one of the most popular tools for measuring how likely customers are to recommend it to others. Many Fortune 1000 companies use an NPS-based system, which can be a great way of gauging how consumers feel about your company.

But what is NPS as a concept, and how can you improve your score? Here’s everything you need to know about one of the most important marketing metrics.

What Is a Net Promoter Score (NPS)?

Your net promoter score gauges how likely a person is to recommend your business to others. It’s based on a simple survey question: “Rate the likelihood of recommending [your business] on a scale of 0 to 10.”

Calculating your NPS gives you insight into long-term customer relationships by surveying and categorizing consumers. It’s a powerful way to gauge overall customer satisfaction and loyalty because it goes beyond measuring immediate experiences.

Importance of Net Promoter Score

A net promoter score helps a brand get feedback from its customers. If you have a high NPS, you’ll likely experience more positive word-of-mouth and higher retention rates. A low NPS might indicate an underlying issue that could harm your business if left unaddressed.

How To Calculate Net Promoter Score

You can determine your net promoter score in three easy steps:

Categorize Respondents

Collect survey responses by asking customers how likely they are to recommend your business on a scale from 0 to 10. Categorize respondents into three groups:

Promoters (Score 9-10): Your happiest customers who are likely to refer others to your business
Passives (Score 7-8): Customers who are satisfied but won’t actively promote your company or products
Detractors (Score 0-6): Dissatisfied customers who might leave bad reviews or share negative experiences with others

Calculate the Percentages

Next, calculate the percentage of respondents in each group.

Percentage of Promoters: (Number of Promoters / Total Respondents) x 100
Percentage of Detractors: (Number of Detractors / Total Respondents) x 100

If you surveyed 100 customers and 50 of them scored between 9 and 10, you would have 50% promoters. Do the same for detractors.

Apply the Formula

Simply subtracti the percentage of detractors from the percentage of promoters to calculate your net promoter score.

NPS = % Promoters − % Detractors

Passives are excluded from the calculation because they are neither harming nor helping your brand.

An Example of How It’s Used

Say, for instance, that you survey 100 customers, and the results are as follows:

50 Promoters (50%)
30 Passives (30%)
20 Detractors (20%)

Using the NPS formula, you would subtract the percentage of detractors from promoters:

NPS = 50% – 20% = 30%

Your net promoter score here would be 30.

What Is a Good Net Promoter Score?

Technically speaking, any score above a flat zero is considered good because it indicates more promoters than detractors. However, you should aim for more than the bare minimum!

According to Bain & Company, the organization behind the initial concept of the NPS, a score above 50 is “excellent,” and a score above 80 is “world-class.” You want to earn a score of at least 20 to be considered “favorable.”

Strategies To Improve Net Promoter Score

There are several ways to boost your NPS. Use surveys to establish a baseline and gather feedback from your customers, then ask follow-up questions to find out why they gave a particular score. Look for patterns in customer responses.

Additionally, consider reaching out to detractors to resolve any issues they’ve encountered. If you can turn a negative experience into a positive one, you might just convert some of them into promoters.

One of the best ways to improve your NPS involves increasing trust and brand awareness. The more people know about your company, values, and products, the more inclined they will be to promote it. That’s where MNTN Performance TV can help.

Our performance marketing CTV platform empowers you to target precise audiences with curated content. You can use MNTN to improve brand recognition and foster customer loyalty, thereby increasing the chances that people will actively promote and recommend your company.

Net Promoter Score (NPS): Final Thoughts

A business’s net promoter score is a great tool for measuring customer satisfaction and predicting its future growth. Now that you understand what an NPS is and how to calculate it, you can take actionable steps to increase customer loyalty and drive long-term success.

Learn more about CTV advertising and OTT advertising to see how MNTN can help you achieve your business goals.