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The Net Promoter Score (NPS) is one of the many different methods for measuring the customer's attitudes and behaviours. NPS evaluates customer loyalty, and it's a way of measuring how well an organization treats their customers. This type of data helps a company to improve their products and services.

How does NPS work?

It's very simple. The company sends a one question survey to their customers.

"How likely is it that you would recommend Company/Product X to a friend or a colleague?"

Then, the question is rated on a scale from 0 to 10, where 10 means extremely likely to recommend and 0 means not likely at all.

People who score a 9 or a 10 are what's called "Promoters". They are loyal customers, they buy regularly and they recommend the brand to other people.

People who score a 7 or an 8 are "Passives". They are satisfied but they are not loyal. They would switch to the competition at any moment.

Finally, people who score 6 and below are "Detractors". They are unhappy customers and they would speak badly about the brand/product.

The Net Promoter Score can be calculated by finding the percentage of promoters and then subtracting the percentage of detractors.

NPS Benefits

  • It's a very simple survey. It's also a single number that can be tracked month by month so you can analyse the evolution in detail.
  • It's easy to use. You can conduct an NPS survey by phone, email or web forms. Customers can answer the question quickly. And it's also easy to share with your colleagues and employees.
  • The company can have the customer feedback very quickly. Then, you can make decisions and changes according to the score.
  • It works in different types of businesses (retail, services, etc.).
  • The company can see if they are winning promoters or losing them and take action. An NPS of 50% is considered a pretty good score. If you use this indicator regularly you can see if you are winning more customer advocates, you need them to spread positive word of mouth.

NPS disadvantages

  • You don't know the driving factors behind the customer's answer to the question. You will need other types of customer satisfaction questions or methods to identify the reasons why people don't like the brand or product.
  • It won't be useful in some countries. For cultural reasons, in some countries, giving a rate of 8 may be considered a pretty good rate (like a 9 or 10). So the score can't be unified for a worldwide strategy.

As you can see, NPS is a very useful tool to measure customer's loyalty. We recommend combining the NPS score, with only one question, with other customer metric techniques that can help you identify what actions need to take place to improve the customer experience.