December 22, 2023

One metric that stands tall in business success and customer satisfaction as a beacon of insight is the Net Promoter Score (NPS). It’s not just another acronym in the corporate alphabet soup; it’s a powerful tool that can revolutionize your understanding of customer loyalty and guide your path to success. What is Net Promoter Score (NPS) At its core, Net Promoter Score (NPS) is a metric designed to gauge customer loyalty and overall satisfaction with your business. Fred Reichheld introduced it in his 2003 Harvard Business Review article “The One Number You Need to Grow.” NPS serves as a compass, helping you navigate the turbulent waters of customer sentiment. Here’s how it works: Customers are asked a single question – “On a scale of 0 to 10, how likely are you to recommend our company/product/service to a friend or colleague?” Based on their responses, customers are categorized into three groups: Promoters (Score 9-10): Promoters are your loyal customers who sing your praises and evangelize your brand. Passives (Score 7-8): Passives are satisfied, but unenthusiastic customers are easily swayed by the competition. Detractors (Score 0-6): Detractors are unhappy customers who can damage your brand and hinder growth through negative word-of-mouth. The NPS is calculated by subtracting the Detractor percentage from the Promoter’s percentage. The resulting score can range from -100 (if all respondents are Detractors) to +100 (if all respondents are Promoters). Calculating Your NPS The NPS formula is simple: NPS=%Promoters−%Detractors To illustrate, let’s consider an example: Promoters: 70% Passives: 20%