What is NPS (Net Promoter Score)?
Net Promoter Score measures customer loyalty by asking "How likely are you to recommend this product/service to a friend?" on a 0-10 scale. Respondents are classified as Promoters (9-10), Passives (7-8), or Detractors (0-6). NPS equals the percentage of Promoters minus the percentage of Detractors.
NPS has become the standard metric for customer satisfaction and loyalty across industries. Scores range from -100 (all detractors) to +100 (all promoters). A score above 0 is acceptable, above 30 is good, above 50 is excellent, and above 70 is world-class. However, benchmarks vary significantly by industry—SaaS companies average 30-40, while airlines average 20-30.
The power of NPS lies in its simplicity and predictive value. Research by Bain & Company (which created NPS) shows strong correlation between NPS and revenue growth—companies with the highest NPS in their industry tend to grow at 2-3x the industry average. The follow-up question "Why?" provides qualitative insights for improvement.
In case interviews, NPS data might appear in customer analytics exhibits. A declining NPS signals deteriorating customer satisfaction and predicts future churn. When advising on customer experience improvements, NPS provides a single metric to track progress. However, be aware of NPS limitations—it's a lagging indicator and doesn't capture the full customer experience.
Real-world example
Tesla consistently achieves NPS scores above 95—nearly every customer is a promoter. This extraordinary score drives organic referrals and has historically allowed Tesla to spend $0 on traditional advertising.
Related terms
Customer Journey
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Churn Rate
Churn rate measures the percentage of customers who stop using a product or service during a given t…
Retention Rate
Retention rate measures the percentage of customers who continue using a product or service over a g…
Product-Market Fit
Product-market fit describes the degree to which a product satisfies strong market demand. Achieved …
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