Definition: Customer loyalty metric measuring the likelihood of users recommending a product or service, classifying respondents as promoters, passives, and detractors.
— Source: NERVICO, Product Development Consultancy
What Is NPS
Net Promoter Score (NPS) is a loyalty metric that evaluates customers’ willingness to recommend a product, service, or company. It is based on a single question: “On a scale of 0 to 10, how likely are you to recommend our product to a colleague or friend?” The response classifies users into three groups that determine the health of the customer relationship.
How It Works
Respondents are classified by their score: promoters (9-10) are loyal enthusiasts, passives (7-8) are satisfied but vulnerable to competition, and detractors (0-6) are dissatisfied customers who may damage reputation. NPS is calculated by subtracting the percentage of detractors from the percentage of promoters, resulting in a value between -100 and +100. A positive NPS is considered acceptable, above 50 is excellent, and above 70 is exceptional.
Key Use Cases
- Periodic customer satisfaction measurement after key interactions such as onboarding or support
- Loyalty comparison across customer segments, product plans, or geographic markets
- Early identification of churn risk by analyzing negative NPS trends
- Competitive benchmarking by comparing own NPS against industry averages
Advantages and Considerations
NPS is simple to implement and easy to communicate across all organizational levels. Its simplicity facilitates longitudinal tracking and period-over-period comparison. However, condensing customer experience into a single number can obscure important nuances. It is essential to complement it with open-ended questions explaining the score rationale and correlate it with operational metrics such as churn or retention.