NPS, or Net Promoter Score, is a customer satisfaction metric used to measure the likelihood that customers will recommend a company’s products or services to others. It’s a simple yet powerful tool for gauging customer loyalty and satisfaction, which can help businesses understand their customers’ overall experience and identify areas for improvement.

How is NPS calculated?

NPS is calculated by asking customers a single question: “On a scale of 0 to 10, how likely are you to recommend our product/service to a friend or colleague?”

Based on their responses, customers are then categorized into one of three groups:

1. Promoters (score 9-10): These are loyal customers who are highly satisfied and likely to recommend the product/service to others. They can help drive growth through positive word-of-mouth and referrals.
2. Passives (score 7-8): These customers are satisfied but not enthusiastic. They may be open to considering competitors’ offerings and are less likely to recommend the product/service.
3. Detractors (score 0-6): These are unhappy customers who may have had a negative experience and are likely to share their dissatisfaction with others, potentially damaging the company’s reputation.

The Net Promoter Score is calculated by subtracting the percentage of Detractors from the percentage of Promoters:

NPS = % Promoters – % Detractors

The resulting score ranges from -100 (all customers are Detractors) to +100 (all customers are Promoters). A higher NPS indicates a stronger likelihood of customers recommending the company, which often correlates with increased customer loyalty, satisfaction, and business growth.