NPS = Net Promoter Score
A company’s Net Promoter Score is a reflection of customer loyalty that commonly translates to growth.
In 2003 Bain & Company launched a research project with data supplied by Satmetrix, to test a variety of questions to see how well the answers correlated with customer behavior.
One question worked best for most competitive industries, and this question lives at the center of our platform:
“What is the likelihood that you would recommend Company X to a friend or colleague?”
High scores on this question correlated strongly with:
• Buying more
• Staying longer
• Referring friends
• Providing feedback
The NPS Scoring System is based on the fundamental perspective that every company's customers can be divided into three categories.
Loyal enthusiasts who keep buying from a company and urge their friends to do the same.
Satisfied but unenthusiastic customers who can be easily wooed by the competition.
Unhappy customers trapped in a bad relationship.
Your score is calculated by taking the percentage of customers who are Promoters and subtracting the percentage who are Detractors.
If you survey 10 people and 8 give you 9’s and 10’s while 2 give you 0-6’s, your Net Promoter Score is 60.
Customer Satisfaction is a 'perception metric.' NPS is an 'Outcome metric'.”
-Wownow via Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld