In the simplest of terms – it’s a tool that measures the degree of customer loyalty to a particular brand. The aim goal of NPS is to calculate what level of consumers is willing to recommend a particular company to their friends, as well as how likely it is that they will use its services again.
This tool is invented to be an alternative version of traditional customer satisfaction research. NPS has been developed by Frederik F. Reichheld and accurately described in the Harvard Business Review, in the article called: ‘’The One Number You Need To Grow’’.
The definite advantage of the NPS is its simplicity and speed of realization. The results are measured by using only one question: ‘’ In a scale 1 to 10, how likely is it that you would recommend our company/product/service to a friend or colleague?’’
Participants are divided into three groups:
1. Detractors – customers who responded 0-6, the ones who wouldn’t recommend the brand.
2. Passives – customers who responded 7-8, the ones who appreciate the brand, but are also vulnerable to competitive bids.
3. Promoters – the ones who responded 9-10, the ones who are loyal to the brand, are willing to recommend it to others and willing to use its services again.
Companies, whose degree of NPS is above 70% are the most appreciated and recommended by customers.