No matter how our digital world advances, word of mouth is one of the best – and cheapest – marketing tools out there for any small business. Customers are four times more likely to buy from you if they’ve been referred by a friend. Especially with so many brilliant small businesses vying for attention in Cambridge, a referral from a satisfied customer can set you apart and above your competitors. But how do you know if your customers would recommend you to a friend? 

It’s simple. You ask them. 

Your Net Promoter Score (NPS) is an excellent tool to gauge customer satisfaction and ensure you’re getting valuable referrals from happy customers. At Tyrrell, we’re incredibly proud to have an NPS of 96, well above the industry average of 40 for professional services! By consistently tracking our NPS, we’ve been able to keep our current clients happy, foresee issues before it’s too late, and bring in new, more profitable business.


Here’s how to calculate yours: 

How to calculate your NPS 

  1. Ask the question 

On a scale of 1-10, how likely are you to recommend [your company/product/service] to a friend?

The first step to calculating your NPS is collecting some data based on your customers’ answers to this question. We use a portal called CustomerSure for this, but you could also use a simple template like this one from Survey Monkey. Whatever format you use, make sure you provide a scale from 1 (not likely) to 10 (extremely likely).  

While this is the only question necessary to calculate NPS, you can get a better understanding of your customer satisfaction if you also ask questions like: 

  • How well did we communicate with you?
  • How would you rate us on value for money? 
  • How likely are you to work with / buy from / use our services again? 

You can also include space for a more open-ended question or an area to leave comments on why your customers rated you the way they did and what could be done to improve this scoring. Scary as it may seem, this allows your responders to give honest feedback about their experience working with you, and means you know exactly what parts of your business need work. 

  1. Sort your responses into categories 

Based on the score they give, your customers or clients can be categorised into the following groups:

  • Promoters (Those who answer 9 or 10) – These are the loyal customers who are most likely to send friends and peers your way. 
  • Passives (Those who answer 7 or 8) – The indifferent group in the middle. The passives have the potential to move up to become promoters, or down to detractors depending on how well problems are resolved and improved upon. 
  • Detractors  (Those who answer 6 or below) – This group are generally unhappy, and could damage your brand if experiences are shared publicly. 


  1. Calculate your score 

Now that your answers are categorised, you can calculate your NPS by subtracting the detractors percentage from the promoters percentage. 

For example, if your clients are 60% promoters, 20% passives and 20% detractors, your NPS would be 40. 


Your NPS helps you improve your business 

Asking your customers and clients for honest feedback is proof that you’re willing to hear constructive criticism and you’re invested in their experience. You can then use the feedback you get to make key decisions and actively improve your business model or service. 

For example, a few years ago Xero did some research into the top reasons business owners were likely to change accountants. They used the NPS structure to gather data from thousands of business owners and found that the top reasons were:

  • Lack of support 
  • Limited industry knowledge 
  • Feeling like a low priority 
  • Not up to date with technology 
  • Unresponsive
  • Not enough value provided

Although this is an across-the-board result, this data helped us ensure we’re addressing all the most common pain points in our industry. We can provide solutions to our prospects’ problems before they even reach out. For example, we offer a Xero Optimisation Review to help with difficulties surrounding out of date technology – by analysing your current set up and processes, we can show you exactly which tools and tech would make running your business more easy, efficient and effective.


Your NPS helps you reach unhappy customers before it’s too late 

Asking for feedback is only the first step. Once you have that feedback, it’s what you do with it that really makes a difference to the people you serve. Categorising your answers gives you a chance to identify the people who are truly unhappy, and to follow up with them personally. It also allows you to see who is hanging in the balance. The NPS calculation lets you catch the passives before they become detractors and turn their experience around, instead of losing them to your competitors.


Your NPS helps generate more profit 

Word of mouth doesn’t just bring in more customers – it can also bring in more profit. 

A study by the Harvard Business Review found that customers who had been referred to a business were both more loyal and more profitable than customers who hadn’t been referred. In fact, referred customers spent, on average, 16% more with a business than non-referred customers. 

On top of this, happy customers are more likely to work with you again and spend more each time. Another study by the Harvard Business Review found that customers with the best past experiences with a business spent 140% more than those with a poor experience. 

But we don’t need studies to tell us this. As business owners, we know that happy customers are more profitable customers, and more profit means more freedom to grow your business and achieve your goals. For more ideas on how to increase your profit, check out our free guide on the 5 DIY steps you can take to get more money for your business.