What are Net Promoter Scores?
Net Promoter Scores (NPS) are a popular metric used by businesses to gauge customer loyalty and satisfaction. Introduced by Fred Reichheld of Bain & Company in 2003, NPS has become a staple in customer experience management. The concept is simple yet powerful: it measures how likely customers are to recommend a company’s product or service to others on a scale of 0 to 10. Based on their responses, customers are categorized into three groups: Promoters (9-10), Passives (7-8), and Detractors (0-6). The difference between the number of Promoters and Detractors is the NPS, which can range from -100 to 100. A positive NPS indicates that a company is doing well in retaining and acquiring customers, while a negative NPS suggests that there are areas for improvement.
In this article, we will explore the significance of NPS, how it is calculated, and its role in customer experience management. We will also discuss the benefits of using NPS and its limitations, as well as some best practices for implementing this metric in your business. By the end of this article, you will have a better understanding of what NPS is and how it can help your company thrive in the competitive market.
