How it's calculated, and why it matters
The Net Promoter® Survey (NPS® for short) methodology was created by Fred Reichheld at Bain & Company and Satmetrix, and was later introduced as the Net Promoter Score in 2003 when Reichheld published an article in the Harvard Business Review – ‘The One Number You Need to Grow’.
Since then, NPS has taken the business world by storm. This single survey question empowers companies to measure their clients' willingness to refer their product or services as a proxy for client satisfaction and service quality. What's more, the simple NPS reporting methodology allows firms to weigh their scores against competitors and across industries to build greater context around their clients' experience.
Calculating your firm's Net Promoter Score starts with a simple survey question:
Sounds familiar, right? Responses to the NPS question are broken up into three groups: promoters, passives, and detractors.
Promoters: Clients who respond with a 9 or 10
Passives: Clients who respond with a 7 or 8
Detractors: Clients who respond with a 6 or lower
NPS is calculated by subtracting the % of client detractors from the % of promoters. By way of example, ClearlyRated’s lifetime NPS is 84%, which is derived from the 86% of promoters across our company survey history minus the 2% of detractors across our company survey history.
86% – 2% = 84% NPS. Easy peasy.
