Net Promoter Score
Net Promoter Score (NPS) is a metric used to measure customer loyalty and satisfaction. It is based on the simple question: „How likely is it that you would recommend our company/product/service to a friend or colleague?”
Customers are then asked to rate their likelihood on a scale of 0-10, with 0 being very unlikely and 10 being extremely likely. Based on their responses, customers are classified into three categories:
- Promoters: Customers who rate 9-10 and are considered loyal enthusiasts who will keep buying and refer others.
- Passives: Customers who rate 7-8 and are satisfied but unenthusiastic and could be easily swayed by competitors.
- Detractors: Customers who rate 0-6 and are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.
To calculate the Net Promoter Score, subtract the percentage of detractors from the percentage of promoters. The score can range from -100 to 100, with a higher score indicating higher customer satisfaction and loyalty.
For example, if 70% of respondents are promoters, 20% are passives, and 10% are detractors, the NPS would be 60 (70% – 10% = 60).
Businesses can use NPS to identify areas for improvement, measure customer loyalty over time, and benchmark against competitors. It is a simple yet effective way to gauge customer satisfaction and drive business growth.
For more information about Net Promoter Score, you can visit Wikipedia.