What is a Net Promoter Score℠?
Your Net Promoter Score℠ (NPS®) is a measure of customer satisfaction and loyalty expressed as a single number. It is calculated using the simple question: How likely is it that you would recommend [company/brand] to a friend or colleague?
A high NPS® tends to indicate a healthier business, while lower NPS® can be an early warning to dig deeper into potential customer satisfaction and loyalty issues. NPS® has been widely adopted by companies for its simplicity, and more than two-thirds of Fortune 1000 companies are using NPS®.
How does NPS® work?
Your NPS® is calculated using the answers to the question: ‘How likely is it that you would recommend [company/brand] to a friend or colleague’, using a 0-10 scale. The higher your score the more likely your clients would be to recommend you.
Promoters (scoring 9-10) are likely to be your most value generating clients. They tend to buy more, remain customers for longer, and are more likely to recommend potential customers.
Passives (7-8) are satisfied but could be lured away by competitive offerings.
Detractors (scoring 0-6) are unenthusiastic or unhappy customers who can hinder future growth through negative word-of-mouth.
How is NPS® calculated?
The Net Promoter Score℠ is calculated by subtracting the percentage of customers who are Detractors from the percentage of customers who are Promoters. It can be a low of –100 (everyone is a detractor) to a high of 100 (everyone is a Promoter). An NPS® that is positive (i.e. higher than zero) is felt to be good, and an NPS® of +50 is excellent. For purposes of calculating the NPS®, passives count towards the total number of respondents but do not directly affect the overall net score.