The Net Promoter Score (NPS) is a management tool and customer loyalty metric used by businesses to measure customer satisfaction and gauge their likelihood to recommend the company’s products or services to others. It was introduced by Fred Reichheld in 2003 through a Harvard Business Review article called “The One Number You Need to Grow.”
The NPS system revolves around a single question typically asked in customer surveys:
“On a scale of 0 to 10, how likely are you to recommend our product/service/company to a friend or colleague?”
Based on the responses to this question, customers are categorized into three groups:
- Promoters (score 9-10): These are highly satisfied and loyal customers who are likely to recommend your business to others. They contribute positively to your company’s growth.
- Passives (score 7-8): These customers are satisfied with your products or services, but they are not enthusiastic enough to actively promote your business. They are neutral in their impact.
- Detractors (score 0-6): These customers are dissatisfied and may even be vocal about their negative experiences. They can harm your brand through negative word-of-mouth.
To calculate the NPS, subtract the percentage of detractors from the percentage of promoters. The score can range from -100 to +100. A positive NPS indicates more promoters, while a negative NPS means there are more detractors than promoters.