Definition
Net Promoter Score (NPS) is a customer loyalty and satisfaction measurement taken from asking customers a single question on a 0 to 10 rating scale: "How likely is it that you would recommend our company/product/service to a friend or colleague?" Based on their rating, customers are then classified into one of three categories: Promoters, Passives, and Detractors.
Calculation of NPS
NPS is calculated by subtracting the percentage of customers who are Detractors (those who gave a score of 6 or below) from the percentage of customers who are Promoters (those who gave a score of 9 or 10). The NPS can range from -100 (if every customer is a Detractor) to 100 (if every customer is a Promoter).
Categories of Respondents
- Promoters (score 9-10): Loyal enthusiasts who will keep buying and refer others, fueling growth.
- Passives (score 7-8): Satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
- Detractors (score 0-6): Unhappy customers who can damage your brand and impede growth through negative word-of-mouth.
Conclusion
Net Promoter Score is a widely used tool for measuring customer loyalty and predicting business growth. While it provides a valuable snapshot of customer sentiment, it should be used in conjunction with other metrics and qualitative insights to gain a more comprehensive understanding of the customer experience. By effectively analyzing and acting on NPS data, companies can enhance customer satisfaction, reduce churn, and promote a positive brand reputation.
