Net Promoter Score (NPS)

Definition of Net Promoter Score (NPS)

A metric used to measure customer loyalty and satisfaction by asking customers how likely they are to recommend a company’s product or service.

Explanation of Net Promoter Score (NPS)

Net Promoter Score (NPS) is a metric used to measure customer loyalty and satisfaction by assessing the likelihood of customers recommending a company’s products or services to others. NPS is calculated based on responses to a single question: “On a scale of 0 to 10, how likely are you to recommend our company/product/service to a friend or colleague?” Respondents are categorized into three groups: Promoters (scores 9-10), Passives (scores 7-8), and Detractors (scores 0-6). The NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters. For example, if 60% of respondents are Promoters and 20% are Detractors, the NPS would be 40. NPS provides valuable insights into customer loyalty, satisfaction, and overall brand perception. By tracking NPS over time, businesses can identify trends, address issues, and improve customer experiences. The goal is to increase the number of Promoters and reduce the number of Detractors, enhancing customer loyalty and driving business growth.

This dictionary entry was written by

Per-Gulbrand Peter Braathen

With a foundation in doctoral-level research, Per-Gulbrand Peter Braathen is a seasoned expert in the areas of marketing, branding and communication. His proficiency extends to marketing management, branding and communication strategy. Braathen's experience is underscored by his rich background from various industries, including entertainment. A distinguished alumnus of the USC Marshall School of Business, Braathen boasts a Master of Science in Marketing, complemented by a Graduate Certificate in the Business of Entertainment from the USC School of Cinematic Arts as well as two undergraduate Bachelor degrees from the esteemed University of Southern California.