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NPS (Net Promoter Score)

metrics

Quick Definition

NPS measures customer loyalty by asking "How likely are you to recommend us to a friend?" (0-10 scale). Score = % Promoters (9-10) minus % Detractors (0-6). Above 50 is excellent.

Detailed Explanation

Net Promoter Score is the gold standard for measuring customer satisfaction and predicting growth. Ask customers: "On a scale of 0-10, how likely are you to recommend [product] to a friend?" Responses group into: Promoters (9-10)—love your product, will refer others. Passives (7-8)—satisfied but not enthusiastic. Detractors (0-6)—unhappy, may churn or trash-talk. Calculate: NPS = % Promoters - % Detractors. Example: 100 responses—60 promoters (60%), 25 passives (25%), 15 detractors (15%) → NPS = 60 - 15 = 45. Benchmarks: <0 = disaster, 0-30 = needs work, 30-50 = good, 50-70 = excellent, 70+ = world-class (Apple, Tesla). High NPS predicts organic growth through word-of-mouth. Low NPS predicts churn and negative reviews. Track NPS monthly by cohort—are newer users happier than old users? Use follow-up question: "Why did you give that score?" to understand what drives score. Turn detractors into promoters by fixing their top complaints.

Formula

NPS = % Promoters (9-10 ratings) - % Detractors (0-6 ratings)

Real-World Examples

Apple

NPS of 72 (highest in tech). 80% of customers rate 9-10. Drives massive word-of-mouth growth, customers become brand evangelists.

SaaS with 45 NPS

60% promoters, 15% detractors. Good but not great. Investigated detractor feedback: slow customer support. Fixed support, NPS jumped to 58 in 6 months.

Failed startup

NPS of -20 (30% detractors, only 10% promoters). Product had bugs, users frustrated. Couldn't retain customers despite high CAC spend. Shut down.

Why It Matters for Your Startup

NPS >50 is strong PMF signal. High NPS companies grow 2.5x faster through referrals (lower CAC). Low NPS means retention problems ahead—users won't renew. Tracking NPS helps prioritize what to fix (ask "why" to detractors).

Common Mistakes

  • Only surveying happy customers (biased sample—email all users)
  • Not following up on "why" (number is useless without context)
  • Ignoring detractor feedback (they tell you exactly what's broken)
  • Calculating NPS wrong (passives don't count in calculation)
  • Surveying too often (quarterly is enough, monthly annoys users)

Frequently Asked Questions

What is a good NPS score?

Above 50 is excellent. 30-50 is good. 0-30 needs improvement. Below 0 means more detractors than promoters (serious problem). Track improvement over time.

How often should I survey NPS?

Quarterly for most startups. Monthly if you're iterating fast and need feedback. Don't survey same user more than once per quarter (survey fatigue).

What if my NPS is negative?

Emergency. Talk to detractors immediately, understand their pain points, fix top 3 issues. Track if NPS improves. If stays negative after fixes, may indicate fundamental product problem.

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NPS (Net Promoter Score) - Definition, Examples & Formula | StartupIdeasDB Glossary | startupideasdb.com