Net promoter score (NPS)

Net Promoter Score, or NPS, converts willingness to recommend into a compact customer KPI. It is easy to communicate, but customer satisfaction, loyalty and future revenue cannot be inferred from the score alone.

When to use it

• Answer: “To what extent are our customers willing to recommend us?”
• Assess the KPI within the Customer perspective.
• Plan representative collection, formula, frequency, privacy and follow-up.
• Compare like with like and retain the underlying response distribution.

Origins

NPS was developed by Fred Reichheld with Bain & Company and Satmetrix and promoted as a way to hold organisations accountable for customer relationships. Related names and marks have trademark or service-mark status; check current usage guidance when publishing them commercially.

The method became prominent through the claim that recommendation intent could act as a concise loyalty and growth signal. Independent evidence does not establish that it is universally superior to satisfaction, repurchase or behavioural measures.

What it is

Perspective: Customer perspective.

Key performance question: To what extent are our customers satisfied and loyal?

Ask how likely a customer is to recommend the specified company, product or service to a friend or colleague. The score groups respondents into Promoters, Passives and Detractors. Those groups simplify reporting but discard information within the original scale.

Do not state that each promoter will remain loyal or refer, or that every detractor will damage the brand. These are labels derived from a response, not observed behaviours.

How to use it

Measurement

Keep wording, entity, timing, channel, population and language consistent. Analyse recommendation alongside actual retention, repurchase, complaints, effort and satisfaction.

Data collection method