More About Net Promoter Score
The concept of NPS was invented by Fred Reichheld of Bain & Company in 2003. He first mentioned about it in his book, “The Ultimate Question: Driving Good Profits and True Growth.” The score defines an approach to measuring the satisfaction of customers based on their experience with the company.
The higher the score, the more likely the company is to retain existing customers and attract new ones. NPS has made it possible to get quantitative and qualitative images of customer sentiment for a company as a whole!
When a business wants to learn about its brand’s products and services, it usually conducts surveys with a score range of 0-10. The results divide the customers into three groups according to their survey responses:
- Promoters: These are consumers who gave an NPS rating of 9 or 10. They are quite loyal customers who share good word of mouth or provide positive remarks about the brand.
- Passives: These are the consumers who gave a lower NPS rating of 7 or 8. They have an average viewpoint toward the business and can move on when an ideal chance arises.
- Detractors: These are dissatisfied consumers who provided an NPS rating of 0 to 6. They are not loyal to the business and will most likely pass on negative word of mouth or comments about the business.
Calculating the NPS of your business is an easy formula that includes subtracting the percentage of detractors from the percentage of promoters. The score will range from -100 to 100.
Net Promoter Score = % of promoters – % of detractors
