Net Promoter Score (NPS) is a well-known foundation-level client satisfaction framework that will provide comparable metrics for all clients. In essence, NPS is a management tool designed to gauge the loyalty of a firm’s client relationships. The NPS indicates a client’s likeliness to refer the firm to business associates, acquaintances, or friends. The NPS ‘Ultimate Question’ (question #1 in the survey module) may be answered by clients based on a scale of 0 to 10. Clients are then categorized into one of three groups based on their responses, including:
Promoters (respondents who select 9 or 10) – Are loyal enthusiasts who keep buying from an organization and urge their friends to do the same.
Passives (respondents who select 7 or 8) – Are satisfied but unenthusiastic customers whom the competition can easily woo. These respondents do not figure into the NPS formula.
Detractors (respondents who select 0 – 6) – Are unhappy customers trapped in a bad relationship.
The NPS is calculated by subtracting the percentage of detractors from the percentage of promoters (NPS = % of Promoters — % of Detractors). The scale of possible Net Promoter Scores ranges from -100 to +100.
Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company and Fred Reichheld.
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