Net Promoter Score (NPS)
NPS measures customer loyalty and likelihood to recommend your product or service.
NPS Formula
NPS Categories
Promoters (9-10): Loyal enthusiasts who will refer others and fuel growth. These customers have high lifetime value and low churn risk.
Passives (7-8): Satisfied but unenthusiastic customers vulnerable to competitive offerings. They won't actively promote you.
Detractors (0-6): Unhappy customers who can damage your brand through negative word-of-mouth. High churn risk.
Example Calculation
Survey of 100 customers:
- 70 Promoters (9-10 ratings) = 70%
- 20 Passives (7-8 ratings) = 20%
- 10 Detractors (0-6 ratings) = 10%
- NPS = 70% - 10% = 60 (excellent score)
Why NPS Matters
NPS correlates with revenue growth, customer retention, and company valuation. Promoters have 3-8x higher lifetime value than detractors. Companies with NPS above 50 grow 2x faster than competitors.