What is Net Promoter Score (NPS)

Organizations with high NPS scores experience 20% higher growth compared to their peers.
Bain & Company

Introduction to NPS

Net Promoter Score (NPS) is a popular metric in customer experience programs. It measures customer loyalty by gauging their likelihood of recommending a business.

Originally introduced by Bain and Company in 2003, NPS has since become a leading customer experience metric, now used by millions of businesses worldwide. NPS scores provide a quick snapshot of overall customer experience by quantifying customer sentiment. As a result, businesses with high NPS scores typically experience greater customer retention, increased word-of-mouth referrals, and stronger revenue growth. Therefore, high recommendation likelihood indicates strong customer satisfaction and a positive customer journey, making NPS an invaluable tool for driving continuous improvement and fostering long-term customer relationships.

NPS relies on one straightforward question to measure customer sentiment:

“How likely are you to recommend [Company Name] to a friend or colleague?”

Respondents are grouped as follows:

Detractors

Score 0-6

Customers who are unhappy and may harm your brand through negative word-of-mouth.

Passives

Score 7-8

Satisfied but unenthusiastic customers who are vulnerable to competitive offerings.

Promoters

Score 9-10

Loyal enthusiasts who will keep buying and refer others, fueling growth.

How is Net Promoter Score Calculated?

The NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters. The score ranges from -100 to +100.

Example 1: If 65% of respondents are Promoters, 10% are Detractors, and 25% are Passives, your NPS would be 65 – 10 = 55

Example 2: If 30% of respondents are Promoters, 45% are Detractors, and 25% are Passives, your NPS would be 30 – 45 = -15

Why does NPS Matter?

NPS is a powerful tool because it provides a clear and easily understood key performance indicator (KPI) of customer sentiment.

High NPS scores are often linked to strong growth, customer retention, and positive word-of-mouth.
NPS helps organizations understand their customers better, make informed decisions, and drive improvements that enhance customer loyalty and business performance.
NPS serves as a key tool for engaging your entire workforce, from frontline staff to executives, in your customer experience initiatives.

How does NPS help your business?

Gauge Employee Sentiment: Quickly and effectively measure overall employee satisfaction and engagement levels.

Identify Areas for Improvement: Understand specific pain points and areas needing attention to enhance the workplace environment.

Track Changes Over Time: Monitor trends in employee sentiment to evaluate the impact of changes and initiatives.

Inform Strategies: Develop data-driven strategies to improve employee satisfaction, retention, and overall workplace culture.

Experience the transformative impact of NPS on your organization. By measuring customer loyalty and satisfaction, NPS provides actionable insights that drive growth, enhance customer experience, and foster a culture of continuous improvement.

Companies like Best Buy, General Motors, Intuit, Lego, PayPal, and more are using NPS to track customer loyalty in their organizations.

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