Posted inAll private sectors / Customer / Marketing

Net promoter score

Definition of this KPI:
Net Promoter Score (NPS) is a key performance indicator (KPI) that measures customer loyalty and satisfaction based on the likelihood of customers recommending a company's products or services to others. The concept was introduced by Fred Reichheld in 2003 and has since become widely adopted as a simple yet powerful metric for assessing customer satisfaction and loyalty.

Calculation of Net Promoter Score:

Survey Question:
Customers are typically asked a single question: ""On a scale of 0 to 10, how likely are you to recommend our product/service to a friend or colleague?""

Categorizing Responses:
Based on their responses, customers are categorized into three groups:

Promoters (score 9-10): These are customers who are highly satisfied and likely to recommend.
Passives (score 7-8): These are customers who are satisfied but not enthusiastic. They are considered neutral.
Detractors (score 0-6): These are customers who are dissatisfied and unlikely to recommend.

The result is a score that can range from -100 to +100.

Interpretation of Net Promoter Score:

Positive NPS (Above 0): Indicates that a business has more promoters than detractors, suggesting a positive customer experience and a higher likelihood of customer loyalty and advocacy.
NPS of +50 or Higher: Generally considered excellent, indicating a strong likelihood of customer loyalty and positive word-of-mouth promotion.
NPS Between 0 and +50: Indicates a good level of customer satisfaction, but there may be room for improvement.
Negative NPS (Below 0): Suggests that there are more detractors than promoters, signaling potential issues with customer satisfaction and loyalty.

  • This KPI can be calculated as: NPS=% Promoters−% Detractors
  • The KPI will be measured as: ratio (number)
  • How to interpret the KPI: higher is better
  • The strategic objective to measure with this KPI: Happy customers (customer satisfaction)
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