Net Promoter Score

Net Promoter Score (NPS), a crucial metric in assessing customer loyalty and predicting churn, gauges customer perception of a brand’s impact on revenue growth or decline. NPS typically relies on a single question: “How likely is it that you will recommend [company X] to friends or family?” Customers respond on a scale from 0 (not likely) to 10 (extremely likely).

The NPS is calculated by subtracting the percentage of 0-6 responses from the percentage of 9-10 responses. For example, if 20% of customers answer 9 or 10, and 15% answer with 0-6, the NPS is 5. A higher score, approaching 100, is favourable, while scores nearing -100 signal a need for immediate action.

Customers fall into three segments based on scores:

• Promoters (9-10): They buy more from the brand, refer friends and family, and contribute to revenue growth.
• Passives (7-8): Satisfied but indifferent, they could be swayed by a compelling competitor offer.
• Detractors (0-6): They hold negative views about the brand and may share their opinions with others.

While NPS is a valuable metric to measure, it lacks insight into the “why” behind scores. Contact centres often supplement NPS surveys with additional questions, including open-ended ones, for a more comprehensive understanding of their performance.