Net Promoter Score (NPS)

Net Promoter Score (NPS) is a customer loyalty metric that measures how likely users are to recommend a product or service. It helps businesses gauge customer satisfaction and predict growth potential.

How Net Promoter Score (NPS) is Calculated

NPS is based on a single-question survey:

"On a scale of 0 to 10, how likely are you to recommend our product/service to a friend or colleague?"

Based on responses, customers are classified into three groups:

• Promoters (9-10): Loyal customers who actively recommend the product.
• Passives (7-8): Satisfied but not enthusiastic; may switch to competitors.
• Detractors (0-6): Unhappy customers who may discourage others from using the product.

NPS Formula:

NPS = % of Promoters - % of Detractors

For example, if 60% of respondents are Promoters, 30% are Passives, and 10% are Detractors:

NPS = 60% - 10% = 50

NPS scores range from -100 to 100, with higher scores indicating stronger customer loyalty.

Why NPS Matters

1. Predicts Customer Loyalty & Growth

A high NPS suggests strong word-of-mouth marketing and customer retention.

2. Identifies Areas for Improvement

Businesses can use NPS feedback to improve customer experience and address concerns.

3. Benchmarks Performance

Companies track NPS over time and compare it with industry benchmarks to measure progress.

How to Improve NPS

• Enhance Customer Support: Quick and helpful responses increase satisfaction.
• Act on Feedback: Address common complaints and implement customer suggestions.
• Engage with Detractors: Reach out to unhappy customers to understand and resolve their issues.
• Reward Promoters: Encourage satisfied customers to leave reviews or refer others.

Tracking and optimizing NPS helps businesses improve customer relationships and long-term success.