Net Promoter Score refers to the metric used to gauge customer satisfaction with a company's products or services. The score is based on responses to a single question: "How likely are you to recommend our company/product/service to a friend or colleague?" Customers respond on a scale of 0-10, with 0 being the least likely and 10 being the most likely.
NPS can be a useful tool for measuring customer satisfaction, but it is important to keep in mind that it is only one metric, and should not be used as the sole measure of success. Additionally, NPS scores can vary significantly from one industry to another, so it is important to benchmark against other companies in your sector.
Overall, NPS acts as a useful metric to gauge whether or not aspects of your business model need to be changed to improve customer satisfaction and relations. If your NPS is low, it might be time to take a closer look at your product or service offering and make some changes to improve the customer experience. However, there are other factors that need to be considered when using NPS as a key performance indicator, so it is important to do your research and use additional metrics alongside this score before taking any drastic action.
How is a Net Promoter Score calculated?
A Net Promoter Score is calculated by subtracting the percentage of detractors from the percentage of promoters. The resulting number ranges from -100 to 100, with higher scores indicating more satisfied customers.
What are promoters, passives, and detractors?
Promoters are customers who are extremely satisfied with a product or service and would recommend it to others. Passives are customers who are somewhat satisfied but may not be enthusiastic about recommending it to others. Detractors are customers who are unhappy with their experience and may actively discourage others from using it.
Fun Fact:
"Net Promoter Score (NPS) is a customer loyalty metric used to measure customer satisfaction. According to a survey conducted by Bain & Company, NPS has been shown to be correlated with revenue growth, with companies that score higher on the Net Promoter Score growing their revenues at two times the rate of those with lower scores." (Gurau, 2019)