Skip to main content

Understanding the Importance of NPS

Metrics are extremely important tools in business, as they help you to understand where your business is heading. Various metric tools can help you to map out your next course of action, so that you can continue to grow your business, and go from strength to strength.

One of the most useful of these metrics is NPS, or Net Promoter Score. While other metrics will deal with the cost of customer acquisition (CAC), or the retention of your current customers, or indeed, even the reacquisition of customers that have churned (been lost), NPS deals specifically with customer loyalty and satisfaction.

Learn how you can use this powerful tool in your business to help you to gain deeper insight into your customers, and head off churn at the pass.

Understanding the Importance of NPS

Net Promoter Score is essentially a way to measure your customer loyalty, as well as the overall satisfaction that your customers feel with your products and services. The way that it works is quite simple. Customers are asked, on a scale of one to ten, how likely they would recommend your products and/or services to their friends and family.

The data that is derived from this simple question can be invaluable to your business, as it helps determine future strategies and plans. However, NPS can also be used as an indicator of your business growth. If your NPS data is on par with, or higher than (preferably) the average within your industry, this is a good indicator that your business is doing well. It also indicates that you have a good relationship with your customers on the whole.

Calculating NPS

Calculating Net Promoter Score is a simple enough process:

To calculate NPS, all you need to do is take the percentage of customers that answered your survey with a score of six or lower, by the percentage of customers that answered your survey with a score of nine or ten.

Customers that score six or lower are known as detractors, while customers that score nine or ten are known as promoters. Customers that score a seven or eight are known as passives

To find out more, contact our Head of Business Development, Andrew Foster, at