What does a net promoter score measure?

A net promoter score (NPS) is a metric specifically designed to gauge customer loyalty and satisfaction. It assesses the likelihood of customers recommending a company’s products or services to others. Customers are typically asked to rate how likely they are to recommend the business on a scale from 0 to 10. Based on their responses, customers are categorized into three groups: promoters, passives, and detractors.

The calculation of the NPS involves subtracting the percentage of detractors from the percentage of promoters. A higher net promoter score indicates a higher level of customer loyalty and a positive relationship with the brand, which can lead to increased customer retention and referral business. This makes NPS a vital tool for companies seeking to understand their customer base and improve their overall customer experience and engagement strategies.

While the other options—revenue growth, operational efficiency, and market share—are all critical aspects of a business's performance, they do not specifically measure the customer’s loyalty or willingness to recommend. NPS is distinct in focusing exclusively on customer sentiment and advocacy.