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N is for Net Promoter Score


N is for Net Promoter Score

From A to I to Z: Jaid’s Guide to Artificial Intelligence

What are your customers more likely to do: champion your brand, or tell anyone who’ll listen that they should avoid you at all costs?

You can find out by working out your brand’s net promoter score. This is a measure of how satisfied and loyal your customers are, and whether your brand is generally perceived in a positive or negative light.

To find out your brand’s net promoter score, start by asking your customers how likely they are to recommend your brand to others on a scale of one to ten. 

Customers who answer with a nine or ten are promoters, those who answer with an eight or seven are ‘passives’, and those whose answer is six or lower are detractors. 

To find out your overall score:

  • Add the number of promoters, then divide it by the total number of customers in your sample and multiply by 100 to get a percentage
  • Add the number of detractors, then divide it by the total number of customers in your sample and multiply by 100 to get a percentage
  • Subtract the percentage of promoters from the percentage of detractors. Your answer is your brand’s net promoter score.

Some facts:

Management consultant Fred Reichheld developed the net promoter score as a simpler way to measure customer loyalty and predict growth. 

At the time, most businesses measured loyalty using customer satisfaction surveys. But Reichheld came to believe these were too complex and time-intensive to do, and of little practical value.

According to his research, the single biggest indicator of customer loyalty was their willingness to recommend a product or brand to others. So he made this the centerpiece of his new model. 

Today, net promoter score is the gold standard metric for customer experience measurement, and it’s used by brands across many industries. This is because it’s simple, easy to understand, and, most importantly, actionable. 

Research has found that businesses with higher net promoter scores are more likely to outperform their competitors. Knowing how customers perceive you — and how strong your relationship with them is — also helps you understand what you need to focus on to move the business forward.

Want to know more?

This is the article that started it all. Writing in the Harvard Business Review, Fred Reichheld introduces the idea of the net promoter score and explains how improving it helps your business grow. 

Despite its popularity and widespread usage, the net promoter score has also received its fair share of criticism. This article argues that, while it’s true that more successful businesses tend to have more customers who are willing to recommend them, this isn’t necessarily proof there’s a direct correlation between loyalty and growth.

Jaid’s perspective

Boost your net promoter score by utilizing Jaid’s AI-powered platform – contact us today!