What Is NPS - Net Promoter or Net Promoter Score?
Net Promoter or Net Promoter Score (NPS) is a management tool that can be used to gauge the loyalty of a firm’s customer relationships. It serves as an alternative to traditional customer satisfaction research and claims to be correlated with revenue growth. NPS has been widely adopted with more than two thirds of Fortune 1000 companies using NPS
The NPS Calculation
The Net Promoter Score is calculated based on responses to a single question: How likely is it that you would recommend our company, product, service to a friend or colleague? The scoring for this answer is most often based on a 0 to 10 scale.
Respondents are grouped as follows:
- Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others, fueling growth.
- Passives (score 7-8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
- Detractors (score 0-6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.
Subtracting the percentage of Detractors from the percentage of Promoters yields the Net Promoter Score, which can range from a low of -100 (if every customer is a Detractor) to a high of 100 (if every customer is a Promoter).
Use your NPS as the key measure of your customers’ overall perception of your brand. Because NPS is a leading indicator from growth, it provides the best anchor for your customer experience management (CEM) program. Complement NPS with other metrics and insights from various points along the customer journey, and you have a comprehensive, actionable view of your customer experience performance.