Unlocking the Power of NPS: A Simple Metric with Big Insights

What is NPS?

Net Promoter Score (NPS) is a straightforward but powerful tool that measures how likely customers are to recommend your brand or product to others. It’s often seen as an indicator of customer loyalty and overall satisfaction.

The Formula: How to Calculate NPS

NPS is calculated by asking customers a single question: "On a scale of 0 to 10, how likely are you to recommend our product or service to a friend or colleague?"

Based on their responses, customers are categorized into three groups:

• Promoters (9-10): Loyal enthusiasts who will continue to buy and refer others.
• Passives (7-8): Satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
• Detractors (0-6): Unhappy customers who can damage your brand and impede growth through negative word-of-mouth.

The NPS formula is simple: NPS = % of Promoters – % of Detractors

The score ranges from -100 to +100, with any positive score indicating that you have more promoters than detractors—a reflection that more people would promote your brand than have issues with it.

Why NPS Matters

Even though NPS is a simple metric, it gives great insight into how customers feel about your brand. It helps you understand how likely they are to advocate for your company, which can impact growth. The real power of NPS comes when it’s measured over time. Tracking your NPS allows you to see how changes in your product or service affect customer sentiment, giving you real-time feedback on how the base is responding.

Measuring NPS Over Time

One of the most valuable aspects of NPS is how it reveals trends over time. By consistently tracking your score, you can:

• Identify if changes in your offerings positively or negatively impact your customer base.
• See how customer loyalty evolves with new product launches or service improvements.
• Measure the effectiveness of marketing campaigns or customer service initiatives.

Famous Companies and Their NPS Scores

Many well-known companies use NPS to track customer loyalty. Here are a few examples, based on data from CustomerGauge

• Tesla – Tesla boasts an incredibly high NPS of 97. This score reflects the brand's passionate and loyal customer base. Tesla's focus on delivering a unique customer experience, along with the brand's high customer retention and satisfaction, has helped it achieve one of the highest NPS scores in any industry
• Amazon – Amazon has an NPS of 73, placing it in the "world-class" category. The company's customer-centric approach, especially through its Prime membership, has driven high retention and customer loyalty
• Apple – Apple’s NPS varies across its products, with a score of 61 in recent years. While AirPods perform particularly well with an NPS of 75, other products like the iPhone score slightly lower at 51

The Takeaway: Positive NPS is Always a Good Sign

While many companies aim for high NPS scores, any positive score is a reflection that more customers are promoting your brand than complaining about it. Even a modest positive NPS means your promoters outweigh your detractors, which is a healthy sign of brand loyalty.

NPS is an essential tool for measuring customer loyalty and sentiment over time. While the calculation is simple, the insights it provides are invaluable. By consistently tracking NPS, companies can spot trends, respond to customer feedback, and ultimately foster stronger relationships with their audience.

Have you tracked your company’s NPS? How have you used it to improve customer loyalty? Share your thoughts in the comments below!