Net Promoter Score

Definition

The Net Promoter Score is an index based on the question “How likely are you to recommend us?” and measures the likelihood of your customers recommending your product or service.

Why use it

The score gives you a feeling about brand perception and your chances of receiving word of mouth advertising.

Adaptation

The same metric can also be calculated on an annual basis (Annual Recurring Revenue). This can make sense, for example, when the minimum subscription period is one year.

AliasNet Promoter
AbbreviationNPS
UnitIndex ranging from -100 to +100

 

Calculation

The Net Promoter Score is based on the outcome of the following question: “How likely is it that you would recommend us on a scale from 1 to 10?”

The answers are clustered as follows:
1-6: detractors
7-8: neutral
9-10: promoters

Promoters (in percent)
– Detractors (in percent)
NPS

Example

A company asks their users how likely they are to recommend their service. 20% answer with a score between 1 and 6, 40% with 7 or 8 and 40% with a score of 9 or 10.

40%
– 20%
+20