Net Promoter Score (NPS)

Net Promoter Score (NPS) is management tool that measures the loyalty that exists between a provider and a consumer. It serves as an alternative to traditional customer satisfaction research.

Calculating the NPD is very easy using the answer to a key question; using a 0-10 scale: How likely is it that you would recommend my brand/service to a friend or colleague?

Responses are grouped as follows:

- Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others, fuelling growth.

- Passives (score 7-8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.

- Detractors (score 0-6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.

Subtracting the percentage of detractors from the percentage of promoters yields the Net Promoter Score, which can range from a low of -100, if every customer is a detractor, to a high of 100, if every customer is a promoter.

The importance of the Net Promoter Score is that it gives you insights into your customer loyalty spectrum, and by measuring customer loyalty you can identify customer experience weak points that need improving.