Net Promoter Score, or NPS, is a management tool that can be used to gauge the loyalty of a firm's customer relationships. It serves as an alternative to traditional customer satisfaction research and claims to be correlated with revenue growth.
Net Promoter Score measures the loyalty that exists between a provider and a consumer. The provider can be a company, employer or any other entity. The provider is the entity that is asking the questions on the NPS survey. The consumer is the customer, employee, or respondent to an NPS survey.
The Net Promoter Score is calculated based on responses to a single question: How likely is it that you would recommend our company/product/service to a friend or colleague?; With options ranging from 0 to 10.
Promoters: Any individual who gives a score of 9 or 10. Promoters are likely to exhibit value-creating behaviors, such as buying more, remaining customers for longer, and making more positive referrals to other potential customers
Detractors: Those who respond with a score of 0 to 6. Detractors are considered far less likely to exhibit value creating behaviors.
Passives: Those individuals who provide a score of 7 or 8. Their behavior falls somewhere between a promoter and a detractor.
The Net Promoter Score is calculated by subtracting the percentage of customers who are Detractors from the percentage of customers who are Promoters. For purposes of calculating a Net Promoter Score, Passives count towards the total number of respondents, thus decreasing the percentage of detractors and promoters and pushing the net score towards 0.
In ChurnZero, your NPS Surveys can be found in the meg menu on the left hand side of your screen.
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