Marketing 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 recognized management tool used to gauge the loyalty of a firm's customer relationships. It is derived from a single, simple question: "On a scale of 0 to 10, how likely are you to recommend [Company/Product/Service] to a friend or colleague?" Based on their responses, customers are categorized into three groups: Promoters (score 9-10) who are loyal enthusiasts, Passives (score 7-8) who are satisfied but unenthusiastic, and Detractors (score 0-6) who are unhappy customers potentially damaging the brand.
Examples & Use Cases
- 1A post-purchase survey sent to customers asking the NPS question
- 2An annual customer satisfaction survey distributed to the entire client base
- 3Using NPS data to benchmark customer loyalty against direct competitors
Related Terms
Customer LoyaltyCustomer SatisfactionChurn Rate