Every business thrives on customer trust—and the Net Promoter Score (NPS) is a powerful way to measure it. Developed by Fred Reichheld at Bain & Company in 2003, NPS helps businesses evaluate customer satisfaction and loyalty, revealing how likely your customers are to recommend your brand to others.
What is NPS and How is it Calculated?
NPS is measured on a 0–10 scale:
- 0–6: Detractors (unsatisfied customers)
- 7–8: Passives (neutral customers)
- 9–10: Promoters (highly satisfied customers)
Formula:NPS = % Promoters - % Detractors
This score shows how effectively your company builds customer relationships worthy of loyalty.
Why NPS Matters for Your Business
While it’s often used to benchmark your brand in the market, NPS is more than just a metric—it’s a mirror of your customer experience. It highlights:
- 1. Areas where your services need improvement
- 2. What excites and delights your customers
- 3. Insights for shaping customer-centric strategies
Organizations that use NPS actively close feedback loops faster and improve long-term retention.
Benefits of Using NPS for Your Business
1. Improve Customer Satisfaction and Reduce Churn
A higher NPS typically signals more satisfied customers. Acting on this feedback strengthens retention and reduces churn. It sends a positive signal to future customers—and to your internal teams.
2. Align Sales Policies with Real Customer Needs
NPS feedback often reveals gaps in product offerings or service delivery. Use this input to revise policies or introduce new features. A declining NPS can be a real-time signal to act fast and build internal confidence.
3. Identify and Resolve Customer Pain Points
Whether it’s a product bug or a service glitch, NPS helps spot issues quickly. Proactively solving them builds credibility and positions your brand as customer-first—crucial for long-term market competitiveness.
4. What is Considered a Good NPS Score?
According to Bain & Company:
- Above 0: Good
- Above 20: Favorable
- Above 50: Excellent
- Above 80: World-Class
While hitting 100 is rare, a consistent upward trend shows your efforts are resonating with customers.
Why NPS Matters More in the Digital Era
In the age of online-first experiences, NPS becomes your reputation thermometer. It offers a quantifiable view of how your brand performs on expectations, promises, and trust—across all touchpoints.
Ready to transform your NPS into business growth?
Net Promoter, Net Promoter Score and NPS are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld.
Frequently
Asked Questions
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How often should I run NPS surveys?
Quarterly or bi-annually is ideal, depending on your customer lifecycle.
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Can NPS be negative?
Yes. A score below 0 means more detractors than promoters—a red flag.
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Is NPS suitable for all industries?
Yes, from SaaS to retail, NPS is a versatile metric applicable to all customer-facing businesses.
