Glossary

Net Promoter Score (NPS)

The Net Promoter Score (NPS) is a special index in customer satisfaction research which is used to determine customer loyalty. NPS measures the probability of customers to recommend a product, company or service.  

Calculation of NPS:
The difference between promoters and detractors of the company, product or service in question is determined. The following question is asked: “How likely is it that you would recommend company/brand x to a friend or colleague?” This question is answered on a scale of 0 (very unlikely) to 10 (very likely).

• Promoters are customers that provide a rating of 9 or 10 on the scale, which means they are very likely to recommend the company or brand.
• Detractors are customers, who answer with 0 to 6. They are rather unlikely to or would not recommend the company or brand at all.
• Those customers who answer with 7 or 8 are called Passives. They are not included into the calculation of NPS.

Following equation is used to determine the Net Promoter Score:
NPS = Promoters (in %) − Detractors (in %)
The NPS ranges between plus 100% and minus 100%. A score of 75% or above is considered quite high.

In addition to the above-mentioned NPS-question customers should be asked a further question („Why“-question) that aims to determine the reasons for or against a recommendation. It is thus possible to find out more about the explicit customer needs, expectations and experiences.

Customer orientation - which is the aim of many companies - can be condensed into one single index through the Net Promoter Score (very useful for benchmarks). This index is fairly easy to determine, quick and easy to comprehend and above all it can be communicated very well.