Why Mindshare? - Glossary

 

Net Promoter Score (NPS)1:

Not to be confused with National Park Service (also NPS), the Net Promoter Score is an aggressive method of scoring customer survey responses that gauges the loyalty of a firm's customer relationships. Based on customers' response to one question ("How likely is it that you would recommend us to a friend or colleague?") customers can be categorized into three groups: promoters, passives, and detractors. From the 3 scores in these categories, the Net Promoter Score (promoters minus detractors) can be calculated.

This business management tool was developed in 2003 by Frederick F. Reichheld (author of "The One Number You Need to Grow"). NPS helps companies simplify their goals for increased profits by focusing employees' attention on creating more advocates for the company (the promoters who rave about a company's product or services) and fewer detractors (people who complain about a company and deter prospective customers, either in online postings or in conversations). Studies show that the NPS scoring method has strong predictive value of future profitability.

NPS is sometimes linked to asking only one question. Asking only one question is not recommended. (See Ultimate Question)

1 Net Promoter, NPS, and Net Promoter Score are trademarks of Bain & Company, Inc., Satmetrix Systems, Inc. and Fred Reichheld