Net Promoter Score (or NPS for short), is a customer experience and satisfaction metric widely adopted around the world. It came about as an alternative to customer surveys and mystery shopping. These were previously the most popular ways of capturing and measuring customer experiences.
NPS is a method of easily quantifying the experience between a ‘provider’ and a ‘customer’. A provider can be a business providing goods and services, an employer or another type of entity.
How is NPS calculated?
Customers are asked one simple question – “How likely are you to recommend us to your family and friends?”. The respondent has to grade their experience on a scale of 0-10 (less commonly, other scales are used such as 1-10, 1-5 etc.).
Those responding in the 9-10 range are referred to as Promoters. These are customers who rate their customer experience highly and are likely to promote your brand to others, leading to business growth.
Responders who have scored in the 7-8 range are referred to as Passives and are fairly neutral in their opinion.
Detractors are people who score their experience between 0 and 6 and represent the unhappy customers. They can damage your brand with bad publicity and will not return to your brand. Identifying Detractors and remedying their experience in a positive way is highly beneficial for businesses. They can avoid damage to their brand and turn the negative customer experiences around to a good outcome.
Subtracting the percentage of Detractors from the percentage of Promoters will give you the NPS score for your business.