Customer
Net Promoter Score (NPS)
Net Promoter Score (NPS) is a widely used metric that measures customer loyalty and the likelihood of customers recommending a company's product or service to others. It categorizes customers into Promoters, Passives, and Detractors based on their likelihood to recommend.
HOW TO MEASURE
NPS is calculated by asking customers a single question: "On a scale of 0 to 10, how likely are you to recommend our product or service to a friend or colleague?" Customers who respond with a score of 9-10 are Promoters, 7-8 are Passives, and 0-6 are Detractors. NPS is the percentage of Promoters minus the percentage of Detractors.
HOW TO IMPROVE
Enhance Customer Experience: Address issues promptly, improve product quality, and personalize customer interactions.
Engage with Feedback: Actively respond to and implement customer feedback to improve satisfaction.
Build Community: Foster a sense of community among customers through events, forums, and engagement on social platforms.
Employee Training: Ensure all team members are equipped to provide exceptional service and enhance customer satisfaction.
Focus on Relationship Building: Develop long-term relationships with customers through regular communication and tailored services.
FORMULA
NPS=( Number of Promoters−Number of Detractors/Total Number of Respondents )×100%
EXAMPLE
If a software company receives feedback from 100 customers: 70 are Promoters, 20 are Passives, and 10 are Detractors, the NPS would be: (70−10/100)×100%=60%
DEPARTMENT USAGE
Marketing: Uses NPS to gauge brand loyalty and identify advocates.
Customer Success: Focuses on improving customer support and engagement based on NPS feedback.
Sales: Adjusts strategies based on customer loyalty insights to better target high-potential leads.
Leadership: Uses NPS as a strategic metric to guide overall business strategy and customer relationship management.
NPS is a powerful tool for understanding customer loyalty and predicting business growth through customer referrals. It helps companies identify areas needing improvement and recognize their strongest advocates.
View the collection of Metrics Workshops.