Net Promoter Score (NPS®)

What is Net Promoter Score?

Net Promoter Score or NPS® is a measure of a customer base’s willingness to promote a product or service to colleagues and friends. It is based on the results of a current customer survey, which asks respondents to answer the following question: “how likely is it that you would recommend (brand or product X) to a friend or colleague?”

Responses, with 10 being the highest, are grouped as follows: 10s and 9s are brand ‘Promoters’, 8s and 7s are ‘Neutrals’, and any responses below 7 are brand ‘Detractors’.

How to calculate Net Promoter Score

ƒ (% Promotors) - (% Detractors)

Favourable trend

Up is positive

Complexity level:
Intermediate

Date created: Mar 01, 2019

Latest update: Apr 17, 2019

Tell me more about this metric

NPS has grown to be an incredibly popular metric among marketing and customer support departments, valued for its simplicity and for its focus on customer satisfaction and loyalty as the prime measures of organizational performance. NPS can be an especially important metric to organizations focused on growth through account expansion or referrals - the “Viral Engine of Growth” in Eric Ries’ terms.

Net promoter scoring should start by answering two related questions: (1) why are we asking? and (2) what will we do with this information? Most organizations will use an initial NPS survey as a benchmark, and track subsequent NPS surveys to measure ebbs and flows in customer sentiment over time. Having clear visibility into changes in NPS over time enables action when customer satisfaction/loyalty drops significantly. A climbing NPS score is an indication that customer experiences are improving, so you should keep doing what you’re doing.

Perhaps the best insights and the most powerful benefits of net promoter scoring come when you combine NPS with related KPIs such as Customer Retention Rate and Customer Referral Rate. If NPS has been falling for the past two quarters, you should expect to see a climb in customer churn and a reduction in account expansions and referrals. On the other hand, as NPS climbs, you would expect to see rising customer referral, retention and expansion rates. Measuring the relationships between these metrics can help optimize performance over time.

Example

Net Promoter Score Example
Detractors: 6 (4.8%)
Neutrals: 64 (51.2%)
Promoters: 55 (44%)
Total: 125 (100%)
Net Promoter Score = 44% - 4.8% = 39.2

What do others say?

Why NPS is a growth-focused KPI, Christian Reni

Metrics related to Net Promoter Score

Referrals
Logo Churn
Customer Lifetime Value