Net Promoter Score (NPS) is a widely adopted metric that gauges customer loyalty. It measures how willing customers are to recommend a company’s products or services, serving as an indicator of business growth and long-term customer relationships. By focusing on a single, standardized question, businesses create a clear, quantifiable objective. Understanding the different ways this score is measured is fundamental for turning customer feedback into effective business strategy.
Understanding the Net Promoter Score Calculation
The Net Promoter Score is derived from a single survey question: “How likely are you to recommend [Company/Product/Service] to a friend or colleague?” Respondents answer using an 11-point scale, ranging from 0 (Not at all likely) to 10 (Extremely likely). This rating is used to categorize all respondents into one of three groups.
Customers who select a 9 or 10 are classified as Promoters. These are enthusiastic and loyal individuals likely to repurchase and refer others to the business. Those who score 7 or 8 are called Passives; they are satisfied but lack the enthusiasm of Promoters and could be swayed by competitors. Detractors score in the 0-6 range, indicating dissatisfaction and a potential for negative word-of-mouth.
The final NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters. Passives are included in the total response count but are excluded from the final calculation, as they represent a neutral segment. The resulting score is expressed as a whole number, not a percentage, and ranges from -100 to 100. A score above zero indicates the company has more Promoters than Detractors, signaling positive loyalty.
Relational vs. Transactional NPS
Customer-focused NPS measurements fall into Relational or Transactional categories, distinguished by their timing and purpose. Relational NPS (rNPS) serves a strategic function by assessing the overall, long-term health of the customer relationship and brand loyalty. These surveys are distributed periodically, independent of any recent customer interaction. The data informs long-term business strategy, tracking sentiment trends and high-level benchmarking.
Transactional NPS (tNPS) is designed for tactical use, focusing on immediate feedback following a specific service interaction or transaction. Examples include feedback after an online purchase, a customer service call, or a product installation. The immediacy of the survey captures the customer’s fresh perception of a single, defined event in the customer journey.
Transactional surveys allow companies to quickly identify specific friction points or successes within operational processes. This highly specific feedback enables teams to make rapid, targeted improvements, such as refining a checkout process. Relational NPS provides a broader assessment, guiding which specific touchpoints might require a deeper tNPS investigation. Using both types allows a company to manage overall brand perception and the quality of individual experiences.
Employee Net Promoter Score (eNPS)
The NPS methodology is adapted for internal use through the Employee Net Promoter Score (eNPS), which measures employee loyalty and engagement. This metric applies the same 0-to-10 scoring system to the question: “How likely are you to recommend this organization as a great place to work to your friends and family?”. Measuring internal sentiment provides a snapshot of employee satisfaction and their willingness to act as advocates.
The calculation of eNPS follows the same formula as the customer score, subtracting the percentage of employee Detractors (0-6) from Promoters (9-10). A positive eNPS suggests the company has more happy and engaged employees than dissatisfied ones. Human Resources teams use this score to benchmark engagement, assess culture initiatives, and improve the overall employee experience. A strong eNPS often correlates with reduced staff turnover and increased productivity, which positively affects customer NPS.
Actioning NPS Data and Closing the Loop
Collecting NPS data is the first step; its true value is realized when feedback is transformed into actionable business change. Companies use the scores to establish internal and external benchmarks against past results and industry competitors. The feedback, especially the open-ended comments, is segmented by customer type or interaction point to reveal specific drivers of satisfaction or dissatisfaction. This segmentation allows for precise allocation of resources to address pressing issues.
The most important action is “closing the loop,” which involves following up directly with respondents to acknowledge feedback and take appropriate steps. For Detractors, follow-up must be rapid, often within 24 to 48 hours, to understand and resolve the negative experience. This direct engagement is a mechanism for reducing customer churn and rebuilding trust.
Promoters also require follow-up, not for service recovery, but for activation and appreciation. Businesses thank Promoters for their loyalty and encourage them to write public reviews or provide testimonials, leveraging their enthusiasm to attract new customers. Passives represent an opportunity to upgrade a neutral experience; companies may offer personalized deals to convert them into full Promoters. Consistently closing the loop proves the organization is listening, driving ongoing operational improvements and reinforcing customer relationships.