NPS (Net Promoter Score)
NPS (Net Promoter Score) net promoter score is a customer loyalty metric that measures the willingness of customers to recommend a company's product or service.
By tracking the percentage of promoters versus detractors, businesses can gauge their overall customer experience and potential for organic growth.
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How NPS Works
Net Promoter Score (NPS) is a critical indicator of customer sentiment that goes beyond traditional satisfaction metrics. By asking customers a single question about recommendation likelihood, companies can segment their customer base into promoters, passives, and detractors.
The scoring methodology involves customers rating their likelihood to recommend on a 0-10 scale. Promoters (9-10) are enthusiastic advocates, passives (7-8) are satisfied but neutral, and detractors (0-6) are unlikely to recommend and potentially harmful to the brand's reputation.
Sophisticated businesses use NPS not just as a vanity metric, but as a strategic tool for understanding customer loyalty, predicting growth potential, and informing product development and customer success strategies.
Key Points
- •Calculates the percentage of promoters minus the percentage of detractors
- •Scores above 50 are considered excellent in most industries
- •Measures customer advocacy, not just satisfaction
- •Provides insights into potential organic growth and customer loyalty
- •Can inform product roadmap and customer success strategies
Frequently Asked Questions
Related M&A Concepts
Customer Satisfaction
A measure of how products and services meet or exceed customer expectations
Learn moreCustomer Retention
The ability of a company to retain its customers over a specific period
Learn moreCustomer Experience
The overall perception a customer has of a brand based on their interactions
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