What Is Net Promoter Score (NPS) In Customer Experience? A Complete Guide

Hannah Clark

on Jan 18, 2025

QUICK SUMMARY

Net Promoter Score (NPS) measures customer loyalty by asking how likely they are to recommend your brand, providing insights to improve satisfaction and drive growth.

Net promoter score or NPS is a widely used, trusted customer service metric for evaluating customer satisfaction. NPS gives your business insight into whether you have created a strong base of loyal brand advocates. It’s calculated based on responses to the question:

"On a scale of 0 to 10, how likely are you to recommend our product/service to a friend or colleague?"

Customers are categorized into three groups:

Promoters (9-10): Enthusiastic supporters likely to recommend the brand.
Passives (7-8): Satisfied but not actively promoting the brand.
Detractors (0-6): Unhappy customers who may discourage others.

The NPS formula is: NPS=%Promoters−%Detractors\text{NPS} = \% \text{Promoters} - \% \text{Detractors}NPS=%Promoters−%Detractors

Origins of NPS

The concept of Net Promoter Score (NPS) was introduced by Fred Reichheld in his 2003 Harvard Business Review article titled "The One Number You Need to Grow." Reichheld proposed NPS as a simple, effective way to measure customer loyalty by asking a single question: “How likely are you to recommend our product/service to a friend or colleague?” He argued that this metric could predict customer behavior and correlate directly with business growth.

The simplicity of NPS, combined with its actionable insights, led to its rapid adoption across industries. Over time, NPS has evolved into a cornerstone of customer experience management, helping businesses track loyalty, identify areas for improvement, and foster customer-driven growth.

Popularity and Usage of NPS

NPS is one of the most popular metrics for measuring customer loyalty and satisfaction, used by businesses of all sizes and industries worldwide. Its simplicity—asking one core question about likelihood to recommend—makes it easy to implement and understand.

Companies like Apple, Amazon, and Airbnb use NPS to track customer sentiment and guide improvements. Its widespread adoption stems from its ability to provide actionable insights, benchmark performance, and highlight areas for growth.

By connecting customer feedback to loyalty and business outcomes, NPS has become a trusted tool for driving customer-centric strategies.

Transactional vs. Relational NPS

Transactional NPS and Relational NPS are two approaches to measuring customer loyalty, each serving a different purpose:

Transactional NPS: Measures customer satisfaction after a specific interaction or transaction, such as a purchase, support call, or website visit.
- Purpose: Identifies immediate feedback on a particular experience, highlighting strengths and weaknesses at the touchpoint level.
- Example: After resolving a customer’s issue via live chat, asking, “How likely are you to recommend our support service based on this experience?”
- Best Use: For identifying and improving specific processes, touchpoints, or departments.
Relational NPS: Measures overall customer loyalty and satisfaction with the brand or organization as a whole, typically collected periodically (e.g., quarterly or annually).
- Purpose: Provides a broader view of how customers perceive the brand over time.
- Example: Sending a survey to customers asking, “How likely are you to recommend our company to a friend or colleague?”
- Best Use: For tracking long-term loyalty trends and benchmarking against competitors.

Use of NPS in Customer Experience (CX)

NPS is a key tool for managing customer experience because it helps measure how loyal customers are to your brand. By asking customers how likely they are to recommend your product or service, NPS gives you a clear idea of their satisfaction.

What is a Good NPS for CX?

With Net Promoter Score (NPS), the higher the score, the better your customer loyalty. The score ranges from -100 to +100, with higher scores indicating greater customer loyalty. Here’s a general guideline:

-100 to 0: Poor – Significant issues with customer satisfaction; requires immediate action.
0 to 30: Average – Customers are satisfied but not enthusiastic; room for improvement.
30 to 70: Good – Indicates strong loyalty and positive customer experiences.
70 to 100: Excellent – Outstanding loyalty; customers are highly likely to recommend your brand.

NPS Benchmarking by Industry

NPS expectations vary by industry. For instance:

Retail: A score above 50 is considered good.
Software/SaaS: Scores above 30 are competitive.
Healthcare: High scores (above 60) are common due to the personal nature of the services.
Telecommunications: Scores typically range from 0 to 30. Scores above 30 are strong due to high competition and customer dissatisfaction.
Financial Services: Scores typically range from 30 to 50. Scores above 50 reflect exceptional service and trust.
Automotive: Scores typically range from 30 to 50, with scores above 50 indicating strong after-sales loyalty.
E-Commerce and Retail: Scores typically range from 50 to 70, driven by convenient shopping and fast delivery.
Hospitality: Scores typically range from 40 to 70, with luxury brands often exceeding 70.
Education: Scores typically range from 40 to 60, tied to instruction quality and student satisfaction.
Energy & Utilities: Scores range from -10 to 20, with scores above 20 indicating strong performance.
Media & Entertainment: Scores typically range from 20 to 40, driven by high-quality content and user-friendly platforms.

While a "good" NPS depends on your specific sector, any score that trends upward over time shows progress in customer satisfaction and loyalty.

How to Collect NPS Data for Customer Experience

NPS surveys are commonly conducted via text, email, phone call or on a website. You can use popular NPS survey software to build and disseminate these forms. Here are my top recommendations:

In order to be an accurate representation of customer satisfaction, the NPS question is generally made available after the customer has received and used the product or service for some time

To be able to calculate a statistically relevant NPS from your NPS survey data, you need to receive around 250 responses on the low end.

Most customers who receive the survey will not respond, so it’s a good idea to assume a response rate of around 10–15 percent and attempt to gather results from at least 1,500 customers.

These customer responses can, of course, be spread out over time as long as you have enough to make a robust analysis.

NPS Survey Design: Tips & Tricks

A streamlined design ensures your NPS survey collects meaningful, actionable feedback while keeping customers engaged. Here are some tips:

Ask the Core NPS Question Clearly: Use the standard question, “On a scale of 0-10, how likely are you to recommend [company/product/service] to a friend or colleague?”
Include a Follow-Up Question: Add an open-ended follow-up, such as “What is the primary reason for your score?” to provide context for the customer’s rating.
Keep It Short: Limit the survey to 2-3 questions to respect customers’ time and increase response rates.
Personalize the Experience: Address respondents by name and tailor the survey to their specific interaction or experience.
Optimize for Multiple Channels: Make the survey accessible via email, SMS, in-app pop-ups, or your website, ensuring it’s mobile-friendly.
Time It Right: Send the survey shortly after a customer interaction to capture fresh, relevant feedback, or schedule periodic surveys for relational NPS.
Use Simple Rating Scales: Display the 0-10 scale visually with clear labels, such as 0 = “Not likely at all” and 10 = “Extremely likely.”
Ensure Anonymity (If Appropriate): Let customers know their responses will remain confidential to encourage honest feedback, especially for lower scores.
Test and Refine: Run a pilot survey with a small group to identify and fix any issues with wording, flow, or usability.
Automate Follow-Ups: Set up automated workflows to thank respondents, address concerns from detractors, and engage promoters for testimonials or referrals.

How to Improve your NPS in 7 Steps

Improving your NPS score may take some time. Tracking trends in NPS compared to the timeline of customer experience improvements allows you to see whether you are making a difference. Here are some places to start:

Enhance Customer Support: Train your support team to provide fast, empathetic, and effective assistance. Ensure agents resolve issues promptly and follow up with customers to show they care.
Streamline Onboarding: Simplify the onboarding process for new customers with clear instructions, tutorials, or personalized walkthroughs. A smooth start builds immediate trust and satisfaction.
Personalize Interactions: Use customer data to tailor communication, offers, and recommendations. Personalized experiences make customers feel valued and understood.
Act on Feedback: Regularly collect customer feedback through surveys or reviews and take visible action to address common complaints or suggestions.
Proactively Solve Problems: Use predictive analytics to identify potential pain points and address them before customers encounter issues. For example, notify them of delays early or offer solutions upfront.
Improve Product or Service Quality: Continuously evaluate and refine your offerings based on customer needs and industry trends to exceed expectations and reduce dissatisfaction.
Celebrate Promoters: Engage loyal customers by thanking them for their support, offering exclusive perks, or involving them in brand advocacy programs.

Criticism and Controversy of NPS

While NPS is widely used, it has faced criticism and controversy over its methodology and practical application:

Oversimplification: Critics argue that relying on a single question oversimplifies customer sentiment. It may not capture the full scope of customer experience, leaving out important nuances.
Lack of Context: NPS doesn’t explain why customers give certain scores. Without additional feedback, businesses may struggle to identify specific issues or areas for improvement.
Arbitrary Scoring: The categorization of Promoters (9-10), Passives (7-8), and Detractors (0-6) has been questioned for being overly broad and not universally applicable across industries or cultures.
Inconsistent Correlation with Growth: While NPS claims to predict business growth, some studies suggest the correlation is not as strong or reliable in certain industries.
Focus on Loyalty Over Satisfaction: NPS emphasizes loyalty rather than immediate satisfaction. A customer might recommend a brand despite a poor recent experience, skewing results.
Gaming the System: Companies may manipulate NPS by selectively surveying happy customers or encouraging customers to give higher scores, undermining its validity.
Cultural Bias: Cultural differences in scoring behavior can lead to skewed results. For example, some cultures may hesitate to give extreme scores, even if satisfied.

Addressing the Criticism:

To counter these issues, businesses often supplement NPS with follow-up questions (e.g., “Why did you give this score?”), additional metrics (like CSAT or CES), and deeper data analysis to gain a more comprehensive view of customer experience.

Use NPS Surveys to Improve Customer Loyalty

NPS is a simple yet powerful tool for measuring customer loyalty and improving the overall customer experience. By understanding how likely customers are to recommend your business, you gain valuable insights into their satisfaction and areas needing improvement. While it’s not without limitations, NPS remains a widely trusted metric for driving customer-focused strategies and fostering long-term growth.

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