About NPS

· NPS Definition

The Net Promoter Score (NPS) is a measure of the intention to recommend customers published by Frederick F. Reichheld through the Harvard Business Review (HBR). It means the percentage of net recommenders minus total consumers. For example, customer satisfaction is surveyed by measuring the answers to the question ‘How much would you recommend a specific product/service or brand to people around you?’ on a scale of 0 to 10. Referral customers are customers who give a question a score of 10 or 9, and non-referral customers are customers who respond with a score of 6 or less. If the NPS is lower than 0, it means that you have more detractors than referrals.

· NPS Customer Classification

· Why NPS?

Existing simple customer satisfaction surveys show a low correlation with actual customer behavior because respondents tend to give them a relatively ‘gracious score’, but NPS shows a high correlation with customer behavior. Therefore, you can manage the customer retention rate and predict the growth rate of the company through NPS.
In addition, NPS is simple and easy to apply because it can evaluate customer satisfaction with one question and answer.

· NPS Calculation Logic

NPS is scored through the formula below, and can have a minimum score of -100 to +100. Therefore, the NPS score can be increased only by reducing the non-recommended customer base and increasing the recommended customer base.