What Is the Net Promoter Score (NPS)?
The Net Promoter Score is a customer loyalty metric based on a single question: "How likely are you to recommend our company to a friend or colleague?" Responses are given on a scale from 0 to 10. NPS was developed in 2003 by Fred Reichheld and Bain & Company and has since established itself as a global standard.
NPS Calculation
Based on responses, customers are divided into three groups:
- Promoters (9–10): Enthusiastic customers who actively recommend and drive organic growth
- Passives (7–8): Satisfied but unenthusiastic customers vulnerable to competitive offers
- Detractors (0–6): Dissatisfied customers who may spread negative word-of-mouth
NPS = Percentage of Promoters – Percentage of Detractors
The score ranges from –100 (all customers are detractors) to +100 (all are promoters). An NPS above 0 is considered acceptable, above 30 is good, and above 70 is outstanding.
NPS Benchmarks by Industry
NPS varies significantly across industries:
- Technology/SaaS: Average 30–40
- Retail: Average 40–55
- Financial Services: Average 20–35
- B2B Services: Average 25–40
- Telecommunications: Average 10–25
NPS as a Strategic Management Tool
The true value of NPS lies not in the number itself but in the follow-up processes. An effective NPS program includes:
- Closed-Loop Feedback: Detractors are contacted, problems solved, and relationships repaired
- Root Cause Analysis: Systematic investigation of the causes behind low scores
- Trend Analysis: Regular measurement reveals developments over time
- Segmentation: Breaking down NPS by customer segments, products, or touchpoints
- Correlation Analysis: Examining the relationship between NPS and business metrics like revenue growth and customer retention
Criticism of NPS
NPS has legitimate criticism: A single question only captures the complexity of customer relationships to a limited extent. Cultural differences influence scale ratings. The division into only three groups is simplistic. Therefore, experts recommend always contextualizing NPS through supplementary questions and qualitative feedback.
NPS at Viola Marketing
At Viola Marketing, we use NPS as one of several building blocks in customer experience monitoring. Combined with Customer Satisfaction Score (CSAT), Customer Effort Score (CES), and qualitative customer surveys, a comprehensive picture of customer satisfaction emerges that serves as the foundation for optimization measures.