The NPS score is a commonly used term in marketing land. But what exactly does this Net Promoter Score (NPS) mean? The NPS is an indicator of recommendation behavior from your customers. So it shows how loyal your customers are.
The Net Promoter Score (NPS)
The Net Promoter Score (NPS) measures customer recommendation intent and is related to sales growth. The Net Promoter Score was developed in 2003 by management consultant Fred Reichheld of Bain & Company in collaboration with the company Satmetrix. The goal: to determine a unified and easily interpretable customer loyalty score that can be compared over time or across industries.
Research method NPS
Survey participants are asked the following question, “To what extent would you recommend the company, brand or product ‘X’ to friends, family or colleagues?” Those surveyed answered this on an 11-point scale, ranging from 0 (very unlikely) to 10 (very likely). Based on the grade given is the respondent:
- A promoter – 9 or 10 points
- A passive – 7 or 8 points or
- A detractor – 0 to 6 points.
NPS score calculation
The NPS is between -100 and +100. If your company, brand or product scores higher than an NPS of 20, then you have reasonably loyal customers. If you score lower than an NPS of 0 (for example, -10), then you have significantly fewer loyal customers. Best, of course, is when every interviewee is a promoter. The score is then +100. So the NPS is a very important indicator of your company’s customer loyalty.
Conclusion
In this blog, you were able to read about what NPS is. However, this is only a method. It only gets interesting when you know what all you can do with NPS in daily practice. Download our white paper to read how to apply NPS.