Net Promoter Score (NPS) is a customer loyalty metric based on one question: "How likely are you to recommend us to a friend or colleague?" Customers respond on a 0-10 scale. You subtract the percentage of detractors from the percentage of promoters to get your score.
The 0-10 scale
- Promoters (9-10): Fans. Likely to refer others and stick around.
- Passives (7-8): Satisfied but not enthusiastic. They won't hurt you, but they won't drive growth either.
- Detractors (0-6): Unhappy customers who may churn or warn others away.
How to calculate NPS
NPS = % of Promoters minus % of Detractors. Passives don't factor in. If 60% are Promoters and 15% are Detractors, your NPS is 45. Scores range from -100 to +100. Above 0 is decent. Above 50 is considered excellent in most SaaS categories.
When NPS is useful and when it's not
NPS is good for tracking loyalty trends over time. A score that drops quarter over quarter is a signal something's wrong. A score that rises after a major release confirms you shipped the right thing.
Where it falls short: it's a lagging indicator. By the time someone rates you a 3, the damage is done. The score alone tells you nothing about why. The real value is in the follow-up question: "What's the main reason for your score?"
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