Net Promoter Score (NPS) is a measure of customer satisfaction and loyalty, based on their likelihood to recommend a business's products or services to others. It is calculated by asking customers to rate their likelihood to recommend the business on a scale of 0 to 10, with 10 being the most likely. Customers who give a rating of 9 or 10 are considered "promoters", those who give a rating of 7 or 8 are "passives", and those who give a rating of 0 to 6 are "detractors". The NPS is calculated by subtracting the percentage of detractors from the percentage of promoters. For example, if a business has 100 customers and 40 of them are promoters, 50 are passives, and 10 are detractors, its NPS would be 30 (40% - 10%).
Net Promoter Score (NPS) is important because it indicates the level of customer satisfaction and loyalty. A high NPS means that the business has a large number of satisfied and loyal customers who are likely to recommend the business to others, which can lead to increased engagement and conversions. On the other hand, a low NPS may indicate that the business has a high number of dissatisfied customers who are unlikely to recommend the business, which could lead to lower engagement and conversion rates.
The average Net Promoter Score (NPS) for a business can vary widely depending on the industry and other factors, such as the size of the business and the nature of its products or services. As a general benchmark, the average NPS for businesses in the software and technology industry is around 20, while the average NPS for businesses in the retail industry is around 30. It is important for a business to benchmark its NPS against other businesses in its industry in order to determine if its NPS is in line with industry norms. This can help the business identify opportunities to increase its NPS and improve its customer satisfaction and loyalty.
