Why NPS Matters

• Predictive power: Strong correlation with revenue growth
• Simplicity: One question, easy to understand and act on
• Comparable: Benchmark against competitors and industry standards
• Actionable: Clear segmentation guides improvement efforts

The NPS Calculation Formula

NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters. Passives don't factor into the calculation but are important for understanding your full customer base.

Step-by-Step Calculation

1. Survey your customers using the 0-10 recommendation scale
2. Classify responses into three groups:
   • Promoters (9-10): Enthusiastic fans who drive growth through referrals
   • Passives (7-8): Satisfied customers vulnerable to competitive offers
   • Detractors (0-6): Unhappy customers who may damage your brand through negative word-of-mouth
3. Calculate percentages of Promoters and Detractors
4. Subtract the percentage of Detractors from Promoters

Example Calculation

For example, if you surveyed 100 customers:

• 60 gave scores of 9-10 (Promoters)
• 25 gave scores of 7-8 (Passives)
• 15 gave scores of 0-6 (Detractors)

Calculation:

Promoters = 60 / 100 = 60%
Detractors = 15 / 100 = 15%
NPS = 60% - 15% = 45

An NPS of 45 is considered good, though the interpretation depends heavily on your industry.

What Does Your NPS Score Mean?

Understanding your NPS score requires context. A score of 30 might be exceptional in one industry but below average in another.

Universal NPS Scale

• Above 70: World-Class - You're among the best globally
• 50 to 70: Excellent - Strong customer loyalty driving growth
• 30 to 50: Good - Solid foundation with room for improvement
• 0 to 30: Fair - Work needed to strengthen customer relationships
• Below 0: Critical - More detractors than promoters requires immediate action

NPS Benchmarks by Industry

Context is everything. Here's how scores typically compare across major industries:

Why industry matters: Industries with fewer alternatives (telecom, insurance) typically have lower scores. Sectors with emotional connections (hospitality, retail) score higher. Your goal isn't perfection, but continuous improvement relative to your industry baseline.

Customer Segments

Your NPS score tells you the net result, but the real insights come from understanding each customer segment.

Your brand champions. They:

• Have the highest lifetime value
• Generate referrals that cost you nothing
• Provide constructive feedback to help you improve
• Stick with you through challenges
• Often spend more than average customers

What to do with Promoters:

• Request referrals and testimonials at optimal moments
• Create ambassador or referral programs
• Ask for detailed product feedback
• Feature them in case studies
• Maintain the excellence that earned their loyalty

Passives are satisfied but not enthusiastic. They're the most likely to switch to a competitor if given a compelling reason.

What to do with Passives:

• Uncover what's holding them back from a 9 or 10
• Engage proactively with personalized outreach
• Highlight improvements based on their feedback
• Create "wow" moments to convert them to Promoters
• Monitor closely for signs of declining satisfaction

Detractors are unhappy customers at high risk of churn and negative reviews.

What to do with Detractors:

• Contact within 24-48 hours of their response
• Listen without defending to understand root causes
• Take concrete action to resolve their issues
• Follow up to confirm satisfaction with the resolution
• Track patterns to fix systematic problems

The 80/20 Insight: Converting just 20% of your Detractors to Passives can dramatically improve your NPS and reduce churn costs.