What Is Net Promoter Score® (NPS)?

Net Promoter Score® (NPS) is a trademarked metric between -100 and 100 that captures in aggregate the propensity of a company’s customers to attract and refer new business or/and repeat business.

customer loyalty in retail

Net Promoter Score® (NPS) is a trademarked metric between -100 and 100 that measures the likelihood of a company’s customers to to promote the brand through new customer references or/and repeat business.

NPS also stands for the Net Promoter System®, a trademarked system and framework that was built around the Net Promoter Score, It is a model that essentially tries to tie a corporation’s bottom line with its customers’ happiness and satisfaction with the company’s products and services. This system aims at managing corporate profits and sustainability through a customer experience lens.

When Was the Net Promoter Score Developed?

The Net Promoter Score® is a framework created by Bain & Co consultants in early 2000, and more specifically by Fred Reichheld, a partner at the firm who was leading the customer loyalty practice at the time. This Net Promoter Score concept came about after obtaining decades of field experience in customer market research, advising senior executives of Global 2000 companies on topics of customer loyalty and growth, and publishing a decent amount of literature on the subject. Harvard Business School Press published his first book on the Loyalty Effect in 1996, followed by his book Loyalty Rules in 2001.

When was net promoter score developed? Look at this NPS Timeline

Realizing the limitations of the traditional approach to customer surveys – highly complex, lengthy, labor-intensive (cross-departmental inputs), and the low response rates leading to modest or unreliable insights – Fred Reichheld and his team of consultants embarked on a quest to downsize the customer survey. This quest entailed finding a single question that would unearth a similar amount of insights as its lengthy and unwieldy customer survey counterpart and whose answer would somewhat be predictive of a company’s revenue growth.

The research project culminated in the paper The One Number You Need to Grow published in the Harvard Business School review in 2003. It summarized the findings and revealed the now extremely popular survey question “How likely is it that you would recommend our company/product/service to a friend or colleague?” and its associated Net Promoter Score.

The success of the paper, and the rapid adoption of the Net Promoter Score across organizations globally, encouraged the team to further develop the metric into a broader management model. Fred Reichheld and his disciple Rob Markey published subsequently two books: The Ultimate Question: Driving Profits and True Growth, in 2006 and The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer-Driven World in 2011.

GUIDE

The Modern Guide to Winning Customers with Net Promoter Score

8 Ways to Modernize Your NPS Program and Create a Culture of Customer Happiness

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How Is Net Promoter Score Calculated?

A Net Promoter Score survey asks a single question, “How likely are you to recommend this product or service?” and a customer responds on a scale of 0-10.

The Net Promoter Score Formula is equal to the percentage of promoters minus the percentage of detractors. Promoters are customers who answered 8 or 9 to the NPS question, and detractors are customers who gave an NPS score of 0 to 6 to this same question. …Read more

What are NPS detractors, passives and promoters

What Is a Good Net Promoter Score?

A +50 NPS, would mean that the company has more than 50% promoters and less than 50% detractors. Any score above 50 is then probably good. Benchmarking is popular, but it is best to focus on continual improvement of your own Net Promoter Score.
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How Do You Improve Your NPS?

There is no shortcut to improving your Net Promoter Score. Go underwater to look at the iceberg, and understand the “why” behind the score. Learn to love unhappy customers’ feedback. And make the most of the Net Promoter System.
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GUIDE

The Net Promoter Score Software Buyer’s Guide

Choosing the right Net Promoter Score software is an important decision—but it’s no easy feat.

There are many tools and solutions to choose from, all of which have varying features — it can all be overwhelming. Luckily, there are ways to determine if a Net Promoter Score solution is right for you. Download this free guide and uncover the key questions to ask when evaluating a vendor.

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Net Promoter Score Survey Methods – Email NPS or In-App NPS?

When it comes to gathering customer feedback for your Net Promoter Score, there are a number of different options to consider. Before we address which survey method is best for your business, let’s look at what email NPS and in-app NPS surveys look like.

Example of NPS Email Survey

InMoment offers NPS email templates that enable you to send surveys directly from your favorite email provider or CRM (like MailChimp or Marketo.) Results appear in your InMoment dashboard.

In general, respondents are more likely to leave qualitative feedback in an email survey vs. in-app respondents.

ACME Inc. email
Example of NPS In-app Survey

InMoment in-app surveys appear when customers are on your website or logged into your SaaS product or mobile app. Set-up requires adding a Javascript snippet or SDK to your application. In-app NPS surveys generally attain much higher response rates than email NPS surveys.

NPS In-app Survey example

Which Is the Best NPS Method?

What should you use – email, in-app (or even SMS) NPS surveys? This depends entirely on your business model. It’s best to engage your customers where they are. Where are they expecting to hear from you? Where are they most likely to respond? Learn how to choose the best customer feedback channel for your customer base.

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