Product management glosary

NPS (Net Promoter Score)

What is NPS (Net Promoter Score)?

Net Promoter Score (NPS) is a metric used to measure customer loyalty and satisfaction towards a brand or product. It was introduced by Fred Reichheld, a partner at Bain & Company, in 2003 and has since become a popular tool for businesses to gauge customer satisfaction.

How is NPS calculated?

NPS is calculated by asking customers a single question: "On a scale of 0 to 10, how likely are you to recommend our product/service to a friend or colleague?" Based on their responses, customers are classified into three categories:

  • Promoters (score 9-10): Customers who are highly satisfied and loyal to the brand. They are likely to recommend the product/service to others.
  • Passives (score 7-8): Customers who are satisfied but not necessarily loyal. They may recommend the product/service but are also open to switching to a competitor.
  • Detractors (score 0-6): Customers who are dissatisfied and unlikely to recommend the product/service. They may even discourage others from using it.

The NPS score is then calculated by subtracting the percentage of detractors from the percentage of promoters. The score can range from -100 (if all customers are detractors) to +100 (if all customers are promoters).

Why is NPS important?

NPS is important because it provides businesses with a simple and effective way to measure customer satisfaction and loyalty. By tracking NPS over time, businesses can identify trends and make improvements to their products/services to increase customer satisfaction and loyalty.

Moreover, NPS is a leading indicator of business growth. Studies have shown that companies with high NPS scores tend to have higher revenue growth rates than those with low scores. This is because loyal customers are more likely to make repeat purchases and refer others to the brand.


NPS is a powerful tool for businesses to measure customer satisfaction and loyalty. By asking a simple question and calculating a single score, businesses can gain valuable insights into their customers' perceptions and make data-driven decisions to improve their products/services. Moreover, NPS is a leading indicator of business growth, making it a key metric for businesses to track and optimize.