Net Promoter Score (NPS)
Term from the CRM Glossary
Definition
The Net Promoter Score (NPS) is a metric for measuring a company's customer loyalty and satisfaction.
The basis is the question: "How likely is it that you would recommend Our company/product/service to a friend or colleague?" on a scale of 0 to 10.
Customers are divided into three categories based on their answer:
- Promoters (9-10): Satisfied, loyal customers who recommend your company as "brand ambassadors".
- Passives (7-8): Customers who are satisfied but not enthusiastic enough to be considered Promoters. These are not included in the calculation.
- Detractors (0-6): Unsatisfied customers who are unlikely to recommend the company and may churn.
Calculation: The NPS is the percentage of Promoters minus the percentage of Detractors.
Formula: NPS = % Promoters - % Detractors
Value Range: The value is between -100 (no Promoters, only Detractors) and +100 (only Promoters).