E-Commerce Dictionary
Net Promoter Score (NPS)
Definition
A management tool that can be used to gauge the loyalty of a firm's customer relationships.
Deep Dive
The Net Promoter Score (NPS) is a widely used management tool and loyalty metric that measures customer loyalty and satisfaction with a company's products, services, or brand. It is based on a single question: "On a scale of 0 to 10, how likely are you to recommend [Company/Product/Service] to a friend or colleague?" Respondents are categorized into three groups: Promoters (9-10), Passives (7-8), and Detractors (0-6). The NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters.
Examples & Use Cases
- 1A SaaS company surveys its users quarterly to track their likelihood of recommending the software
- 2An airline uses NPS feedback to improve its inflight service
- 3An e-commerce brand identifies Detractors and reaches out to resolve their issues
Related Terms
Customer SatisfactionCustomer LoyaltyKPI