What is the Net Promoter Score (NPS)?

Origin and context

In an increasingly competitive business environment, understanding what customers think is crucial. This is where the Net Promoter Score (NPS) comes into play a simple yet powerful metric for measuring satisfaction and assessing customer loyalty.

This metric assesses the likelihood that a customer will recommend a product or brand to others. By asking a single question, companies can gain valuable insights into customer satisfaction and track the evolution of the customer relationship over time.

The NPS is the result of several years of research. While the calculation itself is simple, this KPI is backed by a rigorous methodology. It was introduced in December 2003 by Frederick F. Reichheld of the Bain & Company consulting firm in his Harvard Business Review article, The One Number You Need to Grow.

How is the NPS calculated?

The only question that matters

The NPS is based on this essential question:

“On a scale of 0 to 10, how likely are you to recommend [X] to your friends and family?”

The structure of the question may vary depending on the context, but the goal remains the same: to measure customer engagement and satisfaction in a single number. But why is it so powerful? Because it forces the respondent to synthesize their experience in a quantitative and not qualitative way. Recommending a brand, product, or service is an act of trust and satisfaction. Through this question, the NPS captures the attachment and feelings of customers.

The principle of promoters, passives, and detractors

The score obtained in response to this simple question then allows for the classification of customers into three categories:

• ‍Promoters‍

These are customers who have given a rating between 9 and 10. They are very satisfied and loyal customers, who transmit a positive experience to those around them and participate in the development of the brand. They not only generate positive recommendations but are also more likely to repeat their purchases and remain customers over the long term.

• ‍Passives

Passives are satisfied customers, but they are not excited about the experience. They give ratings between 7 and 8, indicating that they are not dissatisfied but are not enthusiastic enough to recommend the brand. They remain neutral, leaving them open to the competition if a better offer arises.

• ‍Detractors

Detractors are the most unhappy customers, having given a rating between 0 and 6. These customers have likely had a bad customer experience or have been disappointed by the product or service. They can harm the company’s reputation through negative word-of-mouth or unfavorable reviews. Detractors pose a direct risk to business growth, customer retention, and the brand’s image.

The magic formula of NPS

Calculating the NPS is simple: first, convert the number of responses in each category into percentages, then subtract the percentage of detractors (score of 0 to 6) from the percentage of promoters (score of 9 to 10).

For example, let’s say a DIY store wants to calculate its NPS. If 70% of customers are promoters, 20% are passives, and 10% are detractors, the store's NPS will be 60.

An NPS score between 50 and 100 means that customers are highly satisfied with the company's products or services. A score between 0 and 50 is generally considered good or average, while a score below 0 indicates that there are more dissatisfied customers than satisfied ones, necessitating immediate improvement.

What are the benefits of NPS?

Ease of implementation

NPS is easily deployed and does not require complex technical resources. Additionally, automated tools allow for real-time score tracking, facilitating quick adjustments in customer satisfaction improvement strategies.

It is important to note that the sending methods play a crucial role in the interpretation of the results. For example, sending the NPS survey shortly after a purchase or a specific interaction captures the immediate feelings, while a later send may provide a more holistic perception. Regardless, maintaining a consistent sending timing is essential to make this KPI comparable over time.

A value that serves as a standard

The NPS is a globally recognized KPI used by companies of all sizes and across all sectors. Its widespread global adoption makes it a true standard, allowing businesses to easily benchmark themselves against competitors. By measuring customer sentiment in a standardized way, the NPS helps identify a company's key strengths and weaknesses.

The limitations of the NPS

Although the NPS is highly convenient and useful for quickly obtaining an overview of customer satisfaction, it lacks depth on its own. Quantitative data does not allow for an in-depth exploration of the motivations behind a rating, making it difficult to understand the true reasons for a customer's dissatisfaction or moderate enthusiasm. Alone, the score cannot provide a comprehensive view of the customer experience.

At Episto, when we manage NPS for our clients, we enrich the traditional scoring question with open-ended questions that allow respondents to express their feelings in their own words. This approach helps pinpoint the specific drivers of satisfaction or dissatisfaction. These studies can also be combined with other analytical tools such as detailed post-purchase surveys or qualitative ad-hoc feedback conducted across multiple waves. Tracking these variations and trends over time provides a meaningful overview of overall satisfaction, allowing companies to adjust their strategies accordingly.

For example, consider our DIY store surveying customers after an online purchase. A customer gives a score of 6/10. Without follow-up questions, it is impossible to know if this mediocre score is due to a website navigation issue, product quality, or a poor delivery experience. By integrating an open-ended question like, "Can you explain the main reason for your rating?", the customer can specify that the order arrived late or that the assembly instructions were confusing. By tracking these NPS surveys at regular intervals, the store can observe shifts over time, building a truly actionable overview of customer satisfaction.

The NPS and its "competitors"

Although the Net Promoter Score is the most widely used CX (Customer Experience) metric, other indicators are equally valuable for measuring customer satisfaction.

One such alternative is the CSAT (Customer Satisfaction Score), which measures short-term satisfaction with a specific product, service, or interaction. It is typically sent immediately after a transaction to gather instant feedback. Calculating CSAT is straightforward, relying on a question like:

"How satisfied were you with [X]?"

Responses are captured on a scale from 1 (very dissatisfied) to 5 (very satisfied).

The CES (Customer Effort Score) is an indicator designed to measure the friction within a customer journey. The question is typically framed as: "How much effort did you personally have to put forth to handle your request?" on a scale from 1 (very low effort) to 7 (very high effort). This metric aims to measure the seamlessness of an interaction; the less effort required from a customer to solve a problem, the more likely they are to remain loyal.

A third relevant indicator is the repurchase rate, which is closely tied to the customer retention rate. Unlike CSAT and CES, which rely on surveys, this KPI focuses purely on objective behavioral data. It measures active customer loyalty by tracking the exact proportion of customers who continue to buy or use a service over a given period.

Conclusion

The Net Promoter Score (NPS) is a simple yet powerful tool for understanding customer satisfaction and the likelihood of customers recommending a brand or service. However, its simplicity can sometimes be a limitation, as it does not allow for an in-depth exploration of the reasons behind a score which is why it is essential to complement it with open-ended questions to gather richer insights.

Furthermore, to derive truly actionable data, consistency is key. Conducting regular NPS surveys allows companies to track the evolution of customer satisfaction over time and identify critical trends. When deployed effectively, the NPS becomes a powerful lever for optimizing customer retention and engagement strategies.