What is net promoter score?
Net promoter score (NPS) is a customer experience metric for gauging customer loyalty and customer satisfaction. NPS is tracked by a variety of business types, from internet service providers to financial services, and can even be used to assess the satisfaction of employees at a company. Typically, net promoter scores are determined through single-question customer feedback surveys that ask how likely an individual would be (on a scale of 1–10) to recommend a business’s products or services to a colleague or friend.
Customers who respond with an NPS score of 0–6 are referred to as “detractors”—unhappy customers who may pose a risk to the business through negative word of mouth. Customers who respond with a score of 7–8 are known as “passives,” indicating that they may be at higher risk of leaving the business for competitive offerings. Customers who respond with a score of 9 or 10 are known as “promoters”—a business’s most satisfied, enthusiastic, and loyal customers who may be more likely than others to refer new customers.
To calculate net promoter score, a business should subtract their percentage of detractors from the percentage of promoters.
Monitoring net promoter score
The net promoter score system is a valuable tool for measuring customer loyalty, which can ultimately be used to help predict business growth and improve customer retention rates. NPS surveys can be used at a variety of different stages of the customer journey, depending on a business’s unique goals. By using segmentation to separate the most enthusiastic customers from the least enthusiastic ones, businesses can gain a deeper understanding of the way that they are perceived by various groups within their target audience, then pivot their strategies more effectively.