What is Net Promoter Score (NPS)?
Nexa Consultancy | Startup & Finance Glossary
Net Promoter Score (NPS) is a widely used market research metric that measures customer loyalty and satisfaction. It is based on a single question: "On a scale of 0-10, how likely are you to recommend our company/product/service to a friend or colleague?".
For Startups: For a startup, NPS is a powerful tool for gauging customer sentiment and predicting future growth. A high NPS is correlated with lower churn, higher retention, and stronger word-of-mouth marketing. It provides a simple, quantitative measure of how much customers love your product.
Calculation: Based on their responses, customers are categorized as Promoters (9-10), Passives (7-8), or Detractors (0-6). The NPS is calculated as: (% of Promoters) - (% of Detractors).
Example: If a survey results in 60% Promoters, 20% Passives, and 20% Detractors, the NPS score is 40.