What is Net Promoter Score (NPS)?
What's the Formula for Net Promoter Score (NPS)?
Why is Net Promoter Score Important to Startups?
You may have heard of Net Promoter Score, or NPS. It's a metric that measures customer satisfaction and can be a predictor of growth. In other words, it's a metric that startups need to pay attention to. But what exactly is NPS? And why is it so important? Let's take a closer look.
NPS is a metric that measures customer satisfaction. It does this by asking customers how likely they are to recommend a product or service to a friend or family member on a scale of 0-10. Customers who score the product or service a 9 or 10 are considered "promoters." Customers who score the product or service a 7 or 8 are considered "passives." And customers who score the product or service a 0-6 are considered "detractors."
The formula for calculating NPS is as follows:
NPS = % of Promoters - % of Detractors
So, if 50% of respondents are promoters and 10% are detractors, the NPS would be 40.
NPS is important because it's a predictor of growth. Studies have shown that companies with high NPS grow 2X as fast as companies with low NPS. So, if you're looking to grow your startup, you need to pay attention to your NPS.
There are a few reasons why NPS is such a strong predictor of growth. First, promoters are more likely to buy again and refer others. Second, promoters tend to be more loyal and less price sensitive. And third, detractors can cost you customers—not just through churn but also through negative word-of-mouth.
If you're looking to grow your startup, you need to pay attention to your Net Promoter Score (NPS). NPS is a metric that measures customer satisfaction and can be a predictor of growth. Studies have shown that companies with high NPS grow 2X as fast as companies with low NPS. So, if you want your startup to succeed, make sure you're paying attention to your NPS!
