KPI ExamplesNet Promoter Score (NPS)

Net Promoter Score (NPS)

Net Promoter Score (NPS) is a metric to gauge customer loyalty and overall satisfaction. It involves a simple NPS survey asking customers to rate the likelihood of recommending a company's products or services, usually on a scale of 0 to 10. This score is critical to understanding the possibility of repeat business and brand advocacy, encapsulating customer satisfaction and loyalty in a single number.
NPS

Target Refinement

Identify key demographics of satisfied customers to refine target audiences.

Feedback Analysis

Use customer feedback to adjust strategies and improve the customer experience.

Performance Evaluation

In service-oriented sectors, use NPS to gauge employee performance and customer service.

Product Development

Analyze NPS responses to gain insights about product strengths and weaknesses.

NPS and Customer Advocacy

Why Net Promoter Score Is Important

NPS Score is essential for understanding customer loyalty and satisfaction. It offers a direct insight into how customers perceive a brand, providing a snapshot of their willingness to endorse the company to others. 

Moreover, NPS is a valuable tool for gauging the health of customer relationships. A high score often correlates with repeat business and organic growth through word-of-mouth referrals. By tracking NPS, organizations better understand their market position and the likelihood of customer advocacy.

Why KPIs are Important

Stop Wasting Time on Reports. Get Marketing Insights Faster & Drive Results.

Beyond the Basics

How Net Promoter Score Relates To Other KPIs

Net Promoter Scores often intertwine with other key performance indicators (KPIs), such as Customer Acquisition Cost (CAC). A high NPS and a low CAC is a favorable situation for businesses. It suggests that customers are cost-effective to acquire while being likely to recommend the brand to others. 

Similarly, NPS has a symbiotic relationship with Customer Lifetime Value (CLV). A high NPS often leads to increased CLV, as satisfied customers tend to stay longer and purchase more. Additionally, metrics like Engagement Rate and Click-through Rate may influence NPS. Positive engagement frequently correlates with a higher NPS, which indicates effective content that resonates with the audience. 

NPS also influences customer loyalty metrics like Customer Retention Rate and Churn Rate. That’s because highly satisfied customers are more likely to continue a business relationship over time. Conversely, dissatisfied customers have a higher chance of churning and seeking alternative options.

Image Illustrating How KPIs Interact
Customer satisfaction is ultimately the goal of a great partnership. Do clients love you even more because of a new service or product offering? Hopefully, the answer is yes! All other metrics are secondary.
James Shaw, Twin Creek Media
Understand Important Influencers

Key Factors That Impact Net Promoter Score

Several elements influence the Net Promoter Score, primarily centered around customer experience and satisfaction. One significant factor is the clarity and relevance of the NPS questions posed in Net Promoter Score surveys. A well-framed question captures genuine customer sentiments, which directly affects the overall NPS by distinguishing between promoters, passives, and detractors accurately.

Additionally, the effectiveness of the net promoter system hinges on consistent follow-up and feedback analysis. Implementing a robust Net Promoter Score system helps identify trends and areas for improvement, ensuring that the feedback collected leads to actionable insights and enhances customer loyalty.

NPS is more than measuring customer loyalty–it’s also about using the data with intention and improving this core business metric over time. By understanding the customer journey, agencies are better equipped to enhance engagement and fuel business growth. 

Other Impactor KPI Factors to Consider

Discover the Client Reporting Platform Trusted by Over 6,500 Marketing Agencies.

Formula

How To Calculate Net Promoter Score

To run a Net Promoter Score calculation, conduct a survey asking customers to rate their likelihood of recommending the company. A scale of 0 to 10 is typically provided, with 0 indicating “Very Unsatisfied” and 10 being “Very Satisfied”. Customers are categorized as Promoters, Passives, or Detractors. 

NPS is then derived by subtracting the percentage of Detractors from the percentage of Promoters. This simple Net Promoter Score calculation provides a clear indication of customer advocacy and loyalty.

NPS Score Formula Example

NPS
=
% Promoters
-
% Detractors

What Is a Good Net Promoter Score?

A good NPS score typically falls between +30 and +70. This range indicates a healthy amount of loyal customers and a high level of customer satisfaction.

Achieving average Net Promoter Scores above 50 is excellent, suggesting that many existing customers are satisfied. Strong NPS scores mean solid customer relationships, which may result in revenue growth or new customers.

What Is a Bad Net Promoter Score?

A NPS score below 0 is an indication that improvements are required. This ratio means that there are more Detractors than Promoters, suggesting widespread customer dissatisfaction. If a score deeps below -51, this highlights serious problems with customer satisfaction and brand perception.

A negative NPS score is a clear signal for a company to reevaluate and improve its customer experience, product quality, or overall brand perception. Even a negative word (or two) stunts business growth, which is why it’s important to address unhappy customers.

How To Set Net Promoter Score Benchmarks and Goals

To create benchmarks and goals for NPS, start by researching the average NPS based on industry. Next, analyze historical NPS scores to identify trends and influential factors. Use this data from NPS surveys to set specific benchmarks and realistic goals.

For instance, for a current NPS of 30 and an industry average NPS of 50, a goal of 45 is realistic. An internal definition of a good vs. bad NPS score also depends on historical data. For example, if the NPS score has been stable at +30 for several years, but suddenly dips to +10, that should raise concerns, even though the score has not yet dipped into what would otherwise be considered a problematic score.

Also, consider segmenting NPS by different customer groups or services to get more granular insights. Regularly review and adjust these goals as needed, considering industry changes and shifts in customer behavior. 

Report Smarter, Not Harder.

Better, Faster & Easier Client Reports Are Just a Few Clicks Away

Start Your Free Trial Today
The NPS Range of Responses

Understanding Passives, Promoters, and Dectractors

When respondents answer "How likely are you to recommend our product/service to a friend or colleague?" question on a scale of 0 to 10, their answers grouped into three categories:

  1. Promoters (score 9-10): Loyal customers who will keep buying and refer others, fueling growth.

  2. Passives (score 7-8): Satisfied but unenthusiastic customers who are vulnerable to competitive offerings.

  3. Detractors (score 0-6): Unhappy customers who damage the brand and impede growth through negative word-of-mouth.

The overall NPS score is then calculated by subtracting the percentage of Detractors from the percentage of Promoters.

Other KPI Factors to Consider
Customer Loyalty Decoded

Why Net Promoter Score Matters to Clients

Clients value Net Promoter Score because it clearly indicates customer perception and how well their brand resonates. A strong NPS score signifies a healthy customer base, suggesting that clients retain and leverage customers as brand advocates. 

This customer experience metric helps clients understand whether products or services are meeting customer needs. Plus, NPS identifies areas for improvement (e.g., fixing app bugs), which could affect brand perception and loyalty in the long run.

Why KPIs Matter to Clients
A Performance Meter

Why NPS Matters to Agencies

For agencies, Net Promoter Score is a tangible outcome of their marketing strategies and initiatives. A high NPS indicates that the agency’s efforts yield positive customer experiences, which also impacts client retention in the long run. 

NPS is also useful for benchmarking client performance against competitors and industry standards. By considering qualitative feedback from NPS surveys, agencies are better able to provide actionable improvements that help clients reach their goals.

Why Marketing KPIs Matter to Agencies

Showcase Your Agency’s Success. Unlock White-Label Reporting Today

Best Practices When Analyzing and Reporting on NPS

For effective Net Promoter Score reporting, agencies must convey insights clearly and strategically. Here are some tips to communicate NPS insights in a practical and client-friendly manner.

1

Explain the Methodology

Clearly articulate how NPS was calculated and what the response rates were, which ensures data transparency.

2

Incorporate Qualitative Feedback

Alongside quantitative NPS scores, include customer feedback to give more depth and highlight specific areas for improvement.

3

Segment NPS Data

Break down NPS results into customer segments (e.g., demographics, purchase history) to provide more nuanced insights.

4

Link NPS to Other KPIs

Show how NPS correlates with other metrics like Churn Rate and Customer Retention Rate to provide a holistic view of performance.

5

Discuss Implications for Strategy

Connect NPS data to marketing strategies, showing how specific approaches may have influenced customer perceptions and satisfaction.

6

Recommend Actionable Improvements

Based on NPS findings, suggest data-informed strategies for enhancing customer satisfaction and loyalty.

Reporting on Net Promoter Score

GatherUp Dashboard Example

To see how Net Promoter Score looks in a reporting context, explore the GatherUp dashboard in AgencyAnalytics. NPS data is automatically segmented according to Promoters, Detractors, and Passives, which gives a temperature gauge of a brand’s reputation. Along with quantitative NPS and historical data, it’s easy to evaluate long-term progress. View a more granular breakdown of customer feedback, including individual star ratings, comments, and contact information. This visual dashboard perfectly complements any marketing strategy, providing an effective way to manage online reputations and interpret data.
GatherUp KPI Dashboard Example
Helpful Tips

How To Improve Net Promoter Score

A favorable NPS is a crucial part of building a brand reputation and fostering loyal customers. Here are a few practical tips to increase this score.

1

Focus on Service

Ensure the customer service team is well-trained, empathetic, and quick to resolve issues. 

2

Gather Feedback

Seek regular customer feedback through surveys, forms, and direct communication.

3

Improve Product Quality

Put customer feedback into action by making improvements and ensuring their expectations are met.

Related Blog Posts

Agency Growth Tips, Delivered to Your Inbox.

Receive updates with actionable advice on growing your agency!

Easy to use. Decent value for the money. Been using it for just a few months but lots of updates keep on coming. Excellent after sales and support service from Trever and the team.

Ian McLoughlin
Ian McLoughlin

Lambourn Digital

We differentiate ourselves by showing clients their true marketing ROI and our AgencyAnalytics dashboard is the reason we are able to guarantee this knowledge to our clients. It aggregates their total marketing investment, total quote and sales value and–ultimately–their ROI.

Gabriela Paiva
Gabriela Paiva / Marketing Manager

Digilatics

AgencyAnalytics is simply brilliant. By providing our clients with a sleek, easy-to-understand live dashboard, they are able to view their campaign performance and results any time they want. This gives them something tangible and adds value to the services we provide.

Daniel Emery
Daniel Emery

PWD

With custom reports, we can zoom in on the key performance indicators and metrics that matter most to our clients, making our reporting experience incredibly valuable and directly relevant to their success.

Michelle van Blerck
Michelle van Blerck / Communications Manager

Digital Freak

See More KPI Examples

Get Started for Free

Try AgencyAnalytics risk-free for 14 days. No credit card required.
AgencyAnalytics Dashboard Preview