Sales Dictionary
Net Promoter Score (NPS)
Definition
A metric used to measure customer loyalty and satisfaction.
Deep Dive
The Net Promoter Score (NPS) is a widely used management tool and metric that measures customer loyalty and satisfaction by asking a single question: "On a scale of 0 to 10, how likely are you to recommend [Company/Product/Service] to a friend or colleague?" This question categorizes customers into three groups: Promoters (9-10), Passives (7-8), and Detractors (0-6). The NPS is then calculated by subtracting the percentage of Detractors from the percentage of Promoters, yielding a score that can range from -100 to +100.
Examples & Use Cases
- 1A SaaS company sends out a quarterly survey asking users, "How likely are you to recommend our software?" to measure their overall customer base's loyalty.
- 2A retail chain analyzes NPS feedback after product launches to see which new items resonate most positively with their customer base and drive recommendations.
Related Terms
Customer LoyaltyCustomer SatisfactionCustomer Churn