Analyzing Net Promoter Score (NPS)

Net Promoter Score (NPS) is a widely used metric for measuring customer loyalty and predicting churn. It asks customers one key question: "How likely are you to recommend our product/service to a friend or colleague?" Responses are on a scale of 0-10, categorized as follows:

• Promoters (9-10): Loyal enthusiasts likely to keep buying and refer others
• Passives (7-8): Satisfied but unenthusiastic customers vulnerable to competitive offerings
• Detractors (0-6): Unhappy customers who can damage your brand through negative word-of-mouth

The NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters. Scores can range from -100 (all Detractors) to +100 (all Promoters).

While the score itself is valuable, the follow-up question asking why customers gave their rating provides crucial qualitative insights. Analyze these responses to identify common themes and areas for improvement. Regular NPS tracking can help gauge the impact of your retention efforts over time and predict potential churn risks.^[1]