Net Promoter Score (NPS)

What is Net Promoter Score (NPS)?

Net Promoter Score (NPS) is a metric that quantifies customer loyalty by measuring how likely customers are to recommend a company, product, or service to others. It is built around a single survey question:

“On a scale from 0 to 10, how likely are you to recommend [company/product/service] to a friend or colleague?”

Respondents are grouped as Promoters (9–10), Passives (7–8), or Detractors (0–6). The score is calculated by subtracting the percentage of Detractors from the percentage of Promoters, resulting in a value between -100 and +100.

NPS is widely adopted across industries—especially in SaaS, e-commerce, retail, financial services, and customer experience-driven sectors such as AI chatbot and automation. It is regarded as the gold standard for customer experience metrics.

Key Components

Promoters

Definition: Respondents scoring 9 or 10.

Behavior: Loyal, enthusiastic, likely to recommend, and frequently become brand advocates.

Business Impact: Drive growth through positive word-of-mouth and referrals.

Passives

Definition: Respondents scoring 7 or 8.

Behavior: Satisfied but unenthusiastic; vulnerable to competitors, unlikely to actively promote.

Business Impact: Do not affect NPS directly but represent opportunities for conversion into Promoters.

Detractors

Definition: Respondents scoring 0–6.

Behavior: Unhappy, at risk of churning, may generate negative word-of-mouth.

Business Impact: Lower your NPS and signal urgent areas for improvement.

How to Calculate NPS

Calculation Process

Collect Responses: Distribute NPS survey. Ensure standard question is asked and responses recorded on 0–10 scale.

Categorize Respondents:

• Promoters: 9–10
• Passives: 7–8
• Detractors: 0–6

Apply the Formula:

NPS = % Promoters - % Detractors

Passives are included in total respondent count but do not impact score directly.

Example: If out of 200 responses, 125 are Promoters (62.5%), 42 are Passives, and 33 are Detractors (16.5%), the NPS is 62.5 – 16.5 = 46.

How NPS is Used

Organizations leverage NPS to:

• Measure loyalty and satisfaction after transactions or throughout customer lifecycle
• Benchmark performance against industry and regional standards
• Identify journey strengths and weaknesses for product or service improvement
• Drive CX initiatives by acting on direct customer feedback
• Track trends over time and correlate with business changes
• Segment customers for targeted engagement strategies

NPS is especially prevalent in:

• SaaS and software firms
• E-commerce and retail
• Financial services and banks
• AI chatbot and automation platforms
• B2B and enterprise services

Interpreting NPS Scores

What is a “Good” NPS?

Above 0: Indicates more Promoters than Detractors (positive loyalty).

Above 50: Considered excellent.

Above 70: World-class, rare even among top brands.

Below 0: More Detractors than Promoters—urgent action needed.

Industry Benchmarks (2024)

Benchmarks are essential; what’s “good” varies dramatically by industry, business model, and geography.

Key Insights:

• Healthcare average: ~34
• Communication & Media: ~19
• Insurance: 22–22.3
• Airlines: 21.9
• Retail: ~33

Your own performance over time (internal benchmarking) is as important as industry averages (external benchmarking).

Cultural and Industry Variations

• Rating habits differ by country (e.g., Japanese respondents tend to give moderate scores)
• Customer expectations vary; a 30 may be excellent in one field, subpar in another
• Always compare scores to direct peers and consider regional nuances

How to Collect NPS Feedback

Survey Delivery Methods

Email: After purchases, support interactions, or periodic check-ins.

Web/Onsite Pop-Ups: On key website pages, after actions (checkout, signup).

SMS/Text: For quick, mobile-friendly responses.

Phone/IVR: Post-call customer service.

In-person: At point-of-sale or events.

Timing Strategies

Transactional NPS: Immediately after specific event.

Relationship NPS: At regular intervals (quarterly, annually) for overall sentiment.

Best Practices

• Always pair rating with open-ended question for context (e.g., “What is the main reason for your score?”)
• Segment results by customer type, product, region
• Avoid over-surveying; manage frequency to minimize fatigue

How to Act on NPS Data

Analyze and Segment

Break down NPS by customer segment, product, or interaction type. Identify patterns (e.g., Detractors clustered around particular product or region).

Close the Feedback Loop

Respond to Detractors: Quickly resolve issues and mitigate churn.

Leverage Promoters: For testimonials, referrals, and advocacy.

Investigate Passives: Identify conversion opportunities.

Integrate with Other Metrics

Combine NPS with CSAT (Customer Satisfaction Score), CES (Customer Effort Score), churn rate, and behavioral analytics for holistic view.

Track Over Time

Monitor NPS trends and correlate with business changes (product launches, support updates).

Share Insights Internally

Communicate findings organization-wide to foster customer-centric culture.

NPS vs. Other CX Metrics

NPS: Best for loyalty and benchmarking.

CSAT: For tactical, point-in-time feedback.

CES: For identifying process friction.

Benefits

Simplicity: One question yields actionable insights.

Benchmarking: Standardized, enabling cross-industry and internal comparison.

Predictive Value: High NPS correlates with retention and organic growth from referrals.

Alignment: Easy to communicate and share across teams for unified CX focus.

Limitations

Lacks Context: Single score reveals little without qualitative feedback.

Cultural Bias: Response styles differ globally, complicating comparison.

Limited Granularity: NPS summarizes overall loyalty, not specific pain points.

Statistical Validity: Requires large, representative sample sizes.

Can Be Gamed: Employees might selectively solicit happy customers.

Not Diagnostic Alone: Always supplement with open-ended questions and additional analysis.

Best Practices

• Survey regularly, but avoid fatigue—match cadence to customers’ journey
• Automate collection and analysis using digital tools
• Act on insights—use NPS as springboard for further research and improvement
• Share widely—make NPS results visible to all teams
• Benchmark wisely—always compare to relevant industry and regional standards

Practical Examples

SaaS & Tech

Use: Onboarding, support, or major product releases.

Example: Cloud vendors survey after onboarding; Promoters invited to advocacy programs, Detractors receive personalized outreach.

E-Commerce/Retail

Use: Post-purchase experience, customer service quality.

Example: Retailers trigger NPS pop-ups after checkout; negative feedback informs logistics improvements.

Financial Services

Use: Benchmarking digital and branch experiences.

Example: Banks email NPS surveys after account opening; insights drive mobile app enhancements.

AI Chatbot & Automation

Use: Gauge chatbot effectiveness and automation satisfaction.

Example: After chatbot use, present NPS survey; low scores prompt escalation to human agent.

Employee Experience (eNPS)

Use: Measure staff engagement and loyalty.

Example: HR deploys eNPS surveys to monitor satisfaction and retention risk.

Frequently Asked Questions

What is Net Promoter Score (NPS)? Metric measuring customer loyalty by asking how likely customers are to recommend your company or product.

How is NPS calculated? By subtracting percentage of Detractors (0–6) from Promoters (9–10).

What is a good NPS? Above 0 is positive; above 50 is excellent; above 70 is world-class. Always benchmark by industry and region.

Can NPS be negative? Yes. If Detractors outnumber Promoters, score will be negative.

How often should I measure NPS? After key interactions and at regular intervals (quarterly, annually).

What is eNPS? Employee Net Promoter Score, measuring staff loyalty and engagement using same methodology.

Is NPS useful on its own? NPS is valuable high-level indicator but should be paired with qualitative feedback and complementary metrics.

Can NPS be improved quickly? Short-term gains possible (e.g., addressing customer complaints), but lasting improvement requires consistency.

References

• Qualtrics: Net Promoter Score (NPS) Guide
• Contentsquare: What is Net Promoter Score (NPS)?
• Pendo.io: NPS Glossary
• Retently: What is a Good Net Promoter Score? (2025 NPS Benchmark)
• NPS Prism: US NPS Benchmarks 2024
• Qualtrics XM Institute: NPS 2024 Industry Report (PDF)
• Harvard Business Review: The One Number You Need to Grow
• Pendo.io: Pros and Cons of NPS Alternatives
• Pendo.io: How to Use NPS for Mobile App Success
• Fortune Business Insights: NLP Market Growth