GTM Dictionary

The Go-to-Market Dictionary: Net Promoter Score (NPS)

Learn all about Net Promoter Score (NPS) in our comprehensive Go-to-Market Dictionary.

Businesses exist solely because of their customers, and it's essential for them to provide their customers with the best experience possible. One way to measure how happy customers are with the product or service a company provides is by using Net Promoter Score (NPS). NPS is a metric that measures customer loyalty and provides great insight into how your business is doing in the market. In this article, we will dive into what NPS is, why it matters, and how you can improve it.

Understanding Net Promoter Score (NPS)

Before jumping into how to calculate NPS, it's important to understand what it is and why it's important. NPS is an indicator that measures how much customers would recommend your company to others. A high NPS score means that your company is doing an excellent job and that your customers are happy enough to recommend it to their friends, family, and colleagues. A low score, however, means that customers are unhappy and might end up bad-mouthing your company.

What is Net Promoter Score (NPS)?

Net Promoter Score (NPS) is a customer loyalty and satisfaction measurement that calculates the likelihood of a customer recommending a brand's products or services to others. Calculated as scores ranging from -100 to 100, a high NPS score demonstrates that customers are happy and satisfied with a brand's offerings and are likely to become loyal customers.

For example, if your company has an NPS score of 70, it means that 70% of your customers are promoters, or those who are most likely to recommend your company to others. On the other hand, if your NPS score is 0, it means that you have an equal number of promoters and detractors, or those who are not likely to recommend your company to others.

The History of NPS

NPS was created by Fred Reichheld, Bain & Company, and Satmetrix in 2003. It started as a simple, two-question survey that asked customers if they would refer their friends or family to the company, followed by a good or bad score. Its simplicity quickly caught on, and now it's become a popular tool to determine a company's customer loyalty, customer satisfaction, and overall growth prospects.

Over the years, the NPS survey has evolved to include more questions, such as open-ended questions that allow customers to provide more detailed feedback. Some companies have even started to incorporate NPS scores into their employee performance evaluations, as a way to measure how well employees are meeting customer needs and expectations.

Why NPS Matters in Business

A high NPS score can lead to a competitive advantage for your company. It helps you identify the root cause of problems and improve customer satisfaction, leading to more sales, more customer loyalty, and greater profit. A high score means happy customers, which leads to positive word-of-mouth marketing and less spending on advertisements since your happy customers will spread the word for you!

On the other hand, a low NPS score can be a warning sign that something is wrong with your business. It could mean that your products or services are not meeting customer expectations, that your customer service is lacking, or that your prices are too high. By identifying the root cause of the problem and addressing it, you can turn detractors into promoters and improve your NPS score.

In conclusion, NPS is an important tool for any business that wants to measure customer loyalty, customer satisfaction, and overall growth prospects. By understanding what NPS is, how it's calculated, and why it matters, you can use it to improve your business and stay ahead of the competition.

Calculating Your Net Promoter Score

Calculating your Net Promoter Score (NPS) is an essential step in understanding how satisfied your customers are with your product or service. It's a metric that measures how likely your customers are to recommend your company to others. Let's dive deeper into how to calculate your NPS.

Identifying Promoters, Passives, and Detractors

The first step in calculating your NPS score is dividing your customers into three categories: promoters, passives, and detractors. Promoters are customers who would be happy to recommend the company to others. They are your loyal customers who are satisfied with your product or service. Passives are those who are satisfied with the product or service but are unlikely to recommend it to others. Detractors are customers who are unhappy with the product or service.

It's essential to identify these categories to understand how your customers feel about your product or service. By understanding the different categories, you can focus on improving the experience for each group.

The NPS Formula

The NPS score is calculated by subtracting the percentage of detractors from the percentage of promoters. The range of NPS scores is typically -100 to 100, and a score above zero is considered good. A score above fifty is considered excellent, and anything above seventy-five is considered world-class.

For example, if you have 50% promoters, 30% passives, and 20% detractors, your NPS score would be 30 (50%-20%=30%).

Interpreting Your NPS Results

Your NPS score is not the end-all-be-all. It's essential to take a deeper look into the data and analyze it with other metrics to understand your customer feedback fully. A low score could indicate an area for improvement in the company, while a high score can help identify the primary selling points of the company.

It's important to note that your NPS score can vary depending on the industry you're in. For example, a score of 50 might be considered excellent in one industry but average in another. It's crucial to compare your score to the industry average to gain a better understanding of how your company is performing.

In conclusion, calculating your NPS score is a crucial step in understanding how your customers feel about your product or service. By identifying promoters, passives, and detractors, you can focus on improving the experience for each group. Remember to analyze your NPS score with other metrics to gain a better understanding of your customer feedback.

Improving Your Net Promoter Score

Net Promoter Score (NPS) is a crucial metric for any business. It is a measure of customer loyalty and satisfaction, and it can have a significant impact on the success or failure of a company. A high NPS score indicates that customers are satisfied with the company, while a low score indicates that improvements are needed. In this article, we will discuss how to improve your NPS score.

Gathering Customer Feedback

The best way to improve your NPS score is by gathering customer feedback. This feedback can come from various sources, such as surveys, online reviews, or social media. It is essential to collect comprehensive feedback to identify the root cause of any issues. This feedback can be used to rectify and improve any potential issues.

One way to gather feedback is through surveys. Surveys can be conducted via email, phone, or in-person. They can be either quantitative or qualitative. Quantitative surveys use closed-ended questions, while qualitative surveys use open-ended questions. Qualitative feedback is more detailed and can provide valuable insights into the customer experience.

Another way to gather feedback is through online reviews. Online reviews are a great way to get feedback from customers who have used your product or service. They can be found on various platforms, such as Google, Yelp, or Facebook. It is essential to monitor these reviews regularly and respond to any negative feedback promptly.

Analyzing Feedback for Actionable Insights

Analyzing customer feedback is key to understanding your NPS score. From this feedback, you can identify strengths and weaknesses and make the necessary changes to improve your company's customer experience. Commonly used software and tools such as analytics and customer management software can automate and simplify qualitative data analysis processes.

Once you have gathered feedback, it is essential to categorize it into themes. This will help you identify the most common issues that customers are facing. You can then prioritize these issues and create an action plan to address them.

Implementing Changes to Boost Customer Satisfaction

Once the company has the relevant feedback, it can then implement changes to boost customer satisfaction. This may mean improving product or service features, revising customer service protocols, or overhauling your communication strategies.

It is essential to communicate these changes to your customers. This can be done through email, social media, or other communication channels. Customers appreciate when companies take their feedback seriously and make changes to improve their experience.

In conclusion, improving your NPS score requires a comprehensive approach. Gathering customer feedback, analyzing it for actionable insights, and implementing changes to boost customer satisfaction are all essential steps. By doing so, you can improve your customer experience and increase customer loyalty.

NPS Best Practices and Tips

Net Promoter Score (NPS) is a crucial metric for businesses to track customer satisfaction and loyalty. To make the most out of your NPS surveys, it's essential to follow best practices and tips that will help you design, distribute, and analyze your surveys effectively.

Survey Design and Distribution

When designing your NPS survey, it's vital to keep it short and concise. Customers are more likely to respond if the survey is easy to complete and doesn't take up too much of their time. Consider using a scale of 0-10 to measure customer satisfaction, with 0 being the least satisfied and 10 being the most satisfied.

Positioning your NPS survey at the right moments in the customer journey is also crucial. You want to make sure that your customers have had enough interaction with your business to provide accurate feedback. Consider sending surveys after a purchase, a customer service interaction, or after a specific event, such as a webinar or conference.

Timing and Frequency of NPS Surveys

The frequency of NPS surveys is essential. You want to monitor your NPS score regularly to track progress and identify trends over time. However, you also need to be mindful of survey fatigue. Sending too many surveys can lead to a decrease in response rates and lower quality feedback.

Consider sending NPS surveys on a quarterly or bi-annual basis, depending on your business's size and customer base. Additionally, you want to perform NPS surveys immediately after a customer interaction. This ensures that the feedback is relevant and fresh in the customer's mind.

Setting Realistic NPS Goals

Goals are essential in providing direction and inspiring progress. When setting NPS goals, it's crucial to be realistic. Consider your industry benchmarks and your business's historical NPS scores when setting goals. You want to set goals that are challenging but achievable.

Revising measurable goals and setting realistic NPS goals helps maintain focus and provides leadership with advanced warning of any potential issues. It allows them to nip any potential issues in the bud before they become significant problems.

Following these best practices and tips will help you make the most out of your NPS surveys. By designing, distributing, and analyzing your surveys effectively, you'll be able to improve customer satisfaction and loyalty, which will ultimately lead to increased revenue and growth for your business.


Overall, NPS is a valuable tool that offers insight into how your customers perceive your company. Understanding and improving your NPS score will help you build a better customer experience by capturing feedback and taking the necessary steps to create a customer-centric business.