Net Promoter Score (often simply referred to as NPS) is a widely used and accepted measure for the loyalty and satisfaction of a brand’s customers.
NPS is regarded by many consumer facing businesses as the one key metric that drives growth and success.
It is measured on a 10-point scale, where everyone rates company in response to the following question:
‘How likely are you to recommend Company A’s product or service to a friend or a colleague?’
The responses are then pooled into 3 sections:
0-6 = Detractors - unlikely to purchase the product again, and may actually damage the brand’s reputation.
7-8 = Passives - not so dissatisfied as to bad-mouth the brand, but not satisfied enough to actually recommend it.
9-10 = Promoters - brand evangelists who repeatedly buy the product or service, and are extremely likely to recommend it to people.
This gives the ‘raw’ data from which the NPS can be calculated. To get the NPS, you must subtract the percentage of detractors from the percentage of promoters. (Passives are left out of the calculation.)
You then have an NPS: an index ranging from -100 to 100, typically expressed as a percentage.
You’ll note that with only 9 and 10s considered ‘Promoters’, it’s a high bar to enjoy strong NPS, so brands with a great NPS are understandably proud of this achievement.
For many businesses, this is their ‘North Star’ metric, as it shows just how happy and satisfied their customers are with their business (making it more of a ‘leading’ metric than sales/revenue, which is a ‘lagging’ indicator.)
For example if your new customer acquisitions continue to grow, you might think everything is great - but if your NPS is starting to trend down, you may be in danger of seeing higher levels of churn and miss the warning signs that new customers are less likely to stick around.
It’s also important to measure your competitor’s NPS too, because if you can spot a weakness there (and learn why), this is a great opportunity for you to win over their existing customers. However if their NPS is increasing relative to yours, then you will also know you need to respond so they don’t start to win your business.
The important thing about NPS is seeing how it changes over time - giving you an overall trend for you and your competitors.
Therefore you should aim to measure NPS at least every month, providing you enough data-points to give you a trend line on a regular basis - rather than trying to measure it once a year.
Using Attest's real-time Consumer Insight Platform, track your businesses Net Promoter Score and understand how to improve it: