What is NPS and how to calculate it

What is the Net Promoter Score (NPS)?

The Net Promoter Score (NPS) is a metric which is used to measure customer loyalty and satisfaction with a company, product, or service. 

The NPS offers an easy way to see if customers might suggest a business to others. In this article, you will find the information on how to calculate the NPS and how to interpret the NPS.

How to Calculate the NPS?

1. First Step: Ask the Question

To calculate the NPS, start with a simple question:

“On a scale of 1-10, how likely is it that a customer will recommend my company/hotel to a friend or

colleague?” 

2. Second Step: Get Know Categories

Three categories of customers are sorted based on the scale between 1-10: 

• Detractors: Those who respond with a score from 0 to 6. Detractors are customers who are unhappy with the product or service. So, customers with low satisfaction may discourage others from using the service or product. 
• Passives: Those who respond with a 7 or 8. Passives are satisfied customers but they are neutral about the service or product. So, passives are less likely to promote the product or service.
• Promoters: Those who respond with a 9 or 10. Promoters are highly satisfied customers. So, they are likely to recommend the product or service to others.

3. Third Step: Calculate 

NPS is calculated from the difference between Promoters and Detractors in percentages:

NPS = Percentage of Promoters – Percentage of Detractors

The NPS can be between -100 and +100. Here is an example of the NPS calculation:

Example: Let's assume a hotel whose 80% of guests scored 9 or 10 (positive), 10% of guests scored 7 or 8 (neutral), and 10% of guests scored 6 or fewer (negative). In other words, 80% of guests are promoters while 10% of guests are detractors. 

The NPS calculation for the hotel will be like this:

NPS: 80 (Percentage of Promoters) - 10 (Percentage of Detractors) = 70 

The NPS for the example hotel is 70. This score indicates that the majority of guests are promoters. 

How to Interpret the NPS?

• A positive NPS suggests that the hotel has loyal customers who are satisfied with their experience. These customers recommend the hotel to friends, family, and colleagues. A positive NPS reflects a strong reputation and indicates that the hotel is meeting customer expectations.

• A negative NPS indicates that some customers were dissatisfied with the service, facilities, or overall experience. Addressing these negative points and making improvements based on customer feedback is crucial for enhancing satisfaction levels, fostering loyalty, and improving the hotel's overall NPS score over time. 

As a result, interpreting the NPS is not just about the score itself. The NPS helps you to understand other customer feedback metrics. By monitoring and interpreting NPS data, you can adapt and improve the services to meet the needs and expectations of your customers by enhancing customer satisfaction, loyalty, and business success.

Where to find the NPS? 

You can find your NPS by following these steps:

Dashboard → General Overview → Net Promoter Score