What is the Net Promoter Score?

The Net Promoter Score (NPS) is a customer loyalty metric. It’s a simple, yet powerful way to measure customer happiness. And it is a great indicator of growth.

The Net Promoter Score was introduced in the Harvard Business Review in 2003 by Fred Reichheld and is based around one customer survey question:

“How likely is it that you would recommend us to a friend or colleague?”

Customers choose an answer on a scale of 0 (Not at all likely) to 10 (Extremely likely). And based on their response, they are categorised as Detractors, Passives or Promoters.

net promoter score customer groups

Your Net Promoter Score = %Promoters – %Detractors. 

Your score is an absolute number which ranges from -100 (everyone is a detractor) and +100 (everyone is a promoter)

Detractors (0-6) are generally unhappy. They have high potential to harm your brand through negative word of mouth. It’s important to resolve their issues before any damage is done.
Passives (7-8) are satisfied, but somewhat unenthusiastic about your company. They are vulnerable to switching to a competitor.
Promoters (9 -10) are loyal enthusiasts of your business. Repeat purchases will be made by promoters and they will recommend your company to others, which will reduce your costs to acquire new customers.

What are the benefits of NPS to your business?

  • It gives you a single metric that summarises the health of your business, it is easy to understand for everyone and gives you something concrete to work towards.
  • Surveys are quick and simple for your customers. There’s just one question (and an optional comment). There’s no long 30-minute survey. So you can expect higher response rates.
  • You can easily measure measure customer loyalty with the Net Promoter Score which gives you accountability. By improving the customer experience you will see direct changes to your score.
  • With NPS, you can identify your promoters and encourage them to spread the word about your business. This reduces your marketing costs as you’re spending less on attracting new customers.
  • The Net Promoter Score encourages you to reduce churn and create more promoters. Promoters are known to generate more revenue and have a higher Customer Lifetime Value (CLV)

Numerous studies have linked the Net Promoter Score to organic growth. And thousands of companies worldwide use the Net Promoter System. Apple, American Express, eBay and Zappos are just some of the names you’ll recognise.

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