What Is the Net Promoter Score (NPS)? The Formula and How to Calculate It

Being able to quantify "how much customers like your company" with just one question—that is the Net Promoter Score (NPS). As an indicator of customer loyalty that complements customer satisfaction, it is adopted by companies around the world, from Apple to Amazon. This article clearly explains the meaning of Net Promoter Score, the formula for calculating the score and the thinking behind it, a concrete calculation example, how to read the benchmark figures, and points to watch that are specific to Japan.

What is the Net Promoter Score (NPS)?

The Net Promoter Score (NPS) is an indicator that quantifies customer loyalty—the degree of trust and attachment customers feel toward a company, brand, product, or service. Proposed by Fred Reichheld, it is sometimes translated into Japanese as "customer recommendation level" or "net promoter ratio."

NPS is measured by posing a single question to customers—"How likely are you to recommend this company (product or service) to a close friend or colleague?"—and having them rate it on an 11-point scale from 0 to 10. The simplicity of needing only one question is a major characteristic of the Net Promoter Score.

Whereas a traditional customer satisfaction survey asks about past or present feelings ("Are you satisfied?"), NPS asks about a future action ("Will you recommend it to others?"). Because the act of recommending to others also bears on your relationship with them, it tends to connect to actual behavior such as continued use and word of mouth more than satisfaction does, and this is why its tendency to correlate with business growth draws attention.

The three categories: promoters, passives, and detractors

In NPS, customers who answered from 0 to 10 are classified into the following three groups according to their score. What matters is not the score itself but tallying how many people fall into each group.

• Promoters (9-10 points): Enthusiastic customers who love the company or service and voluntarily recommend it to those around them. They have high repeat rates and become a source of new customer acquisition through word of mouth.
• Passives (7-8 points): Customers who are satisfied but not enough to actively recommend. They don't complain, but they tend to switch easily when a more attractive competitor appears.
• Detractors (0-6 points): Customers who are dissatisfied and may spread negative word of mouth. They dampen the purchase intent of new customers and carry a high risk of churning.

A distinctive feature of the NPS classification is that while the broad range of 0-6 points is classified as detractors, promoters are limited to 9-10 points.

The Net Promoter Score formula

The NPS formula is very simple. You can find it just by subtracting the percentage of detractors from the percentage of promoters among all respondents. Passives are not included in the calculation.

NPS = percentage of promoters (%) - percentage of detractors (%)

When calculating directly from the number of people, the following formula gives the same result.

NPS = (number of promoters - number of detractors) / total respondents x 100

Passives are omitted from the calculation because NPS is an indicator that represents the net difference between "people who recommend you" and "people who hold you back"—that is, the net percentage of promoters. The resulting figure is written as a whole number with the percent (%) sign removed.

Understanding the calculation through a concrete example

Let's actually plug in numbers and calculate. Suppose you ran an NPS survey with 1,000 customers and the responses split as follows.

• Promoters (9-10 points): 300 people -> 30% of the total
• Passives (7-8 points): 300 people -> 30% of the total
• Detractors (0-6 points): 400 people -> 40% of the total

In this case, applying the formula gives the following.

NPS = 30% (promoters) - 40% (detractors) = -10

Note that the 30% of passives is not used in the calculation. Because there are more detractors than promoters, the score is negative in this case. Conversely, with 70% promoters and 10% detractors, NPS would be "+60"—the more promoters, the higher the score.

The score range and how to read the figures

In theory, NPS takes a value from -100 to +100. If everyone is a detractor it is -100, and if everyone is a promoter it is +100.

As a rough benchmark of the absolute value, exceeding 0 is considered good—a state where promoters outnumber detractors—and exceeding +50 is rated as an excellent level. That said, reaching +100 almost never happens in reality.

And the most important thing in NPS is "comparison" rather than the absolute value itself. By looking at it from a relative perspective—how the score has changed from your own past figures, and how it compares to direct competitors or the industry average—you can judge whether your customer-experience improvements are moving forward. Because average scores differ greatly by industry, be careful not to compare directly with figures from other industries.

Points to watch when measuring and using NPS

To use the Net Promoter Score correctly, there are points worth keeping in mind.

• It tends to come out negative in Japan: Japanese consumers have a strong tendency to choose middle scores, often giving 6-8 points even when they are favorable. Because 6 points is classified as a detractor, scores tend to come out negative. Don't be swayed by the absolute value; evaluate by trends and comparison.
• Secure a sufficient sample size: Results are not stable when there are few responses. In general, 400 or more samples are considered desirable, and you need more responses if you want to make the margin of error even smaller.
• Align your survey targets: The score varies greatly depending on the target—whether it's your own customer list or a research firm's panel. Decide in advance whom to ask and measure continuously under the same conditions.
• Also ask the reason for the score: The score alone won't reveal improvement points. Asking "the reason you gave that rating" in a free-text field makes the strengths praised by promoters and the dissatisfaction of detractors concrete, so you can apply them to your initiatives.

Turning the score into improvement

NPS is not about measuring and being done; it has value only when you act on the results. The basic approach is to vary the direction of follow-up for each of the three categories. Follow up quickly with detractors to resolve the causes of dissatisfaction, lift the experience a notch for passives to grow them into promoters, and prepare mechanisms and perks that encourage word of mouth from promoters to raise their loyalty further. Continuously measuring and improving the score this way leads to higher customer loyalty and LTV (customer lifetime value), and ultimately to the company's growth.

Summary

The Net Promoter Score (NPS) is an indicator that quantifies customer loyalty with a single question: "Would you recommend us to a close friend?" Responses are divided into promoters (9-10 points), passives (7-8 points), and detractors (0-6 points), and the score is calculated with the formula "percentage of promoters - percentage of detractors." Passives are excluded from the calculation because NPS represents the net percentage of promoters. The score ranges from -100 to +100; exceeding 0 is considered good and over +50 excellent, but because middle responses are common in Japan and scores tend to come out negative, it is important to read it by past trends and comparison with competitors rather than by the absolute value. Securing a sufficient sample, asking the reason behind the score, and connecting to follow-up suited to promoters, passives, and detractors respectively—that is how to turn NPS into a force for growth.