What is Net Promoter Score (NPS)?

Net Promoter Score (NPS)

Net promoter score, also known as NPS, is a metric that measures how likely customers will recommend the company’s products or services. This metric is considered to be one of the most effective ways to improve customer experience management programs.

Depending on the NPS provided by the NPS survey, customers fall into one of the following categories:

Detractors. These are clients that have responded to the survey with a recommendation score from 0 to 6. These are customers that weren’t satisfied with the company’s products and wouldn’t recommend it to anyone.

Passives. Passives are people with an NPS of 7 or 8. These are people, who are satisfied with the purchase but won’t be promoting the product or services due to the insufficient amount of interest in it.
Promoters. Promoters are customers who have responded with a score of 9 or 10. These customers are fully satisfied with the purchase from the company and will be more than glad to recommend its products or services to acquaintances or friends.

NPS formula

The formula for the net promoter score is quite simple. To find your company’s NPS one needs to subtract a percentage of detractors from the percentage of promoters.

For example, if a company has 60% of promoters, 30% of passives, and 10% of detractors, the NPS will be 60%-10% = 50%. Passives are not included in the formula, because they remain idle and won’t change the attitude to the company.

NPS score can be applied not only for the company’s overall level of customer loyalty but also can be calculated for certain products, physical stores, web pages, and even the company’s employees. This metric is also used to compare its own NPS with competitors.

Relational and transactional NPS

NPS surveys can be divided into two groups, which are transactional relational NPS surveys. Relational NPS surveys are provided on the regular basis, which can be daily, monthly, quarterly, or annually. This survey is provided to get customer feedback and find out what they think about the company after being a client for some time. Transactional surveys are used to find out the customer’s immediate reaction after the purchase of the product. Transactional surveys are also sent after the customer has made a support call to find out whether he is satisfied with the assistance provided.

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