KPI Name

Net Promoter Score (NPS)

Introduction to the Net Promoter Score (NPS) KPI

The Net Promoter Score (NPS) KPI measures how likely customers are to recommend your product or service to others. It’s one of the most widely used customer experience and loyalty metrics, offering clear insight into brand perception and long-term customer relationships.

What Is Net Promoter Score (NPS)?

NPS is collected by asking a single question:
“How likely are you to recommend us to a friend or colleague?”
Customers rate their answer on a scale from 0 to 10 and are categorized into:

  • Promoters (9–10): Loyal, enthusiastic customers

  • Passives (7–8): Satisfied but not enthusiastic

  • Detractors (0–6): Unhappy customers who may discourage others

The formula is:
NPS = % Promoters – % Detractors

Why This KPI Matters

NPS offers a simple yet powerful measure of customer loyalty. It helps companies understand:

  • Overall customer sentiment and brand love

  • Likelihood of organic growth through referrals

  • Pain points causing dissatisfaction

  • Effectiveness of customer experience initiatives

  • Risks of churn and negative word-of-mouth

Higher NPS scores indicate strong loyalty, while lower scores highlight critical issues that may impact retention and revenue.

How to Use This KPI Effectively

Organizations often segment NPS by customer type, product, region, or lifecycle stage to uncover actionable patterns. Pairing NPS with Customer Satisfaction Score (CSAT), Customer Effort Score (CES), Churn Rate, and Retention Rate gives a holistic view of customer health and helps shape effective improvement strategies.

KPI Description

Measures customer likelihood to recommend a business on a scale of -100 to 100.

Tags

Category

Customer Support

Alternative Names

Customer Loyalty Score

KPI Type

Quantitative, Lagging

Target Audience

Customer Success Managers, Business Owners, Marketing Teams

Formula

NPS = % Promoters – % Detractors

Calculation Example

If 60% are promoters and 20% are detractors, NPS = 60 – 20 = 40

Data Source

Customer surveys, feedback forms

Tracking Frequency

Quarterly, Annually

Optimal Value

A score above 50 is excellent, above 30 is good.

Minimum Acceptable Value

A negative NPS suggests a serious customer satisfaction issue.

Benchmark

Industry benchmarks: SaaS ~30-50, Retail ~20-40, Telecom ~10-30

Recommended Chart Type

Bar chart (to compare segments), Line chart (to track trends)

How It Appears in Reports

Displayed in customer experience reports to measure loyalty.

Why Is This KPI Important?

Indicates how likely customers are to promote a brand.

Typical Problems and Limitations

May not reflect actual customer behavior; promoters may not always refer new customers.

Actions for Poor Results

Improve customer experience, reward loyal customers, address detractor concerns.

Related KPIs

Customer Satisfaction Score (CSAT), Churn Rate, Customer Lifetime Value (CLV)

Real-Life Examples

A fintech company increased NPS from 25 to 55 by improving customer onboarding.

Most Common Mistakes

Focusing on increasing NPS without actively leveraging promoters for referrals.