Net Promoter Score (NPS)
Net Promoter Score Explained
What is Net Promoter Score?
The Net Promoter Score (NPS) measures the customer experience with a brand and is used to predict business growth.
The metric is proven and widely known for transforming the business world, and provides brands with the core metric for customer experience management programs worldwide.
The NPS metric was developed by Fred Reichheld, Bain & Company and Satmetrix. It was introduced by Reichheld in a Harvard Business Review article in 2003, “The One Number You Need to Grow“. Its popularity and broad use have largely been attributed to its simplicity: it’s just a single question.
How to calculate NPS?
Calculating NPS is based on the answer to a key question, using a 0-10 scale: How likely is it that you would recommend (the brand) to a friend or colleague? The NPS index ranges from -100 to 100, measuring consumers’ willingness to recommend a product or service to others. It can also inform a brand of the loyalty that they hold within their sector. are then grouped as follows:
Detractors
Detractors gave a score of 6 or lower. They aren’t thrilled by the product or service you offer. In all likelihood, they won’t purchase from the company again, whilst potentially damaging the company’s reputation through the negative spreading of word of mouth.
Passives
Passives graded your company a score of 7 or 8. They have been somewhat satisfied with what you offer, but could easily switch to a competitor if given a reason or opportunity. They won’t spread any negative reviews, but are not going to speak enthusiastically either.
Promoters
Promoters are your company’s backbone. They score 9 or 10 and have a strong affiliation with your product or service. They are repeat buyers and enthusiastic about your brand, who recommend the company to any new potential buyers they encounter.
Calculating the Net Promoter Score
The score is then determined by subtracting the percentage of customers who are detractors from the percentage who are your promoters. What is generated is a score on the -100 to 100 scale called the Net Promoter Score.
Understanding NPS is a great starting point for learning more about your business’s health. To find out more, you can read up on our Brand Tracking services and dashboards, BrandVision, which uses 9 Key Metrics (NPS included) as a way to understand your Brand Equity.
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