The Importance of the Net Promoter Score (NPS)

The Net Promoter Score (NPS) is a useful tool to assess customer loyalty to your brand. It is becoming extremely popular today particularity with Fortune 1000 companies. In fact, two-thirds of all Fortune 1000 companies use this metric.

A Net Promoter Score (NPS) is calculated based on the results from the net promoter score survey question. The question asks customers “How likely is it that you would recommend this [product/brand/company] to a friend or colleague?” Respondents are given response options ranging from 1 = not at all likely to 10 = extremely likely.

How a person responds determines whether they are a Promoter, Passive, or Detractor. Promoters are individuals who answer the aforementioned question with a 9 or 10. These individuals are loyal enthusiasts. They will continue to buy products and/or services from your company. They also would refer others, thereby promoting growth of your company. Passives respond to the survey question with a 7 or 8. These consumers are satisfied with your products and/or services, but they are unenthusiastic. They are not necessarily loyal to your brand or company and may pursue business with your competitors. Detractors answer the question with a response of 6 or below. These individuals are unhappy customers. They can ruin the reputation of your company or brand via negative word-of-mouth.

The Net Promoter Score (NPS) is calculated by subtracting the percentage of Detractors from the percentage of Promoters. Scores can range from -100 (if every respondent is a Detractor) to 100 (if every respondent is a Promoter). A positive score (anything over zero) is considered to be a good score. A score of over 50 is considered to be outstanding.

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