What is Net Promoter Score (NPS)?
Net Promoter Score (NPS), introduced by Fred Reichheld in 2003, is a loyalty metric calculated from one question: "How likely are you to recommend [Company] to a friend or colleague?" on a 0-10 scale. Respondents are categorized: Promoters (9-10), Passives (7-8), Detractors (0-6). NPS = % Promoters − % Detractors, ranging from -100 to +100. Industry benchmarks vary: Apple ~70, Tesla ~95, large banks ~30, airlines often negative. The metric is criticized — single questions miss nuance, the scale is non-linear, scores depend heavily on collection method — but its simplicity makes it the most widely used loyalty metric in business. Best practice: combine NPS with open-ended "why?" question for actionable insight.
How Net Promoter Score (NPS) actually works
The framework breaks down into the following moving parts. Knowing what each piece is — and what it is not — is what separates a B-grade answer from an A-grade answer in a written assignment.
- Ask the single question on 0-10 scale
- Promoters: 9-10, Passives: 7-8, Detractors: 0-6
- NPS = % Promoters − % Detractors
- Always pair with open-ended "why?" follow-up
- Track over time and by segment
A worked example: Apple
Apple's NPS routinely measures around 70 — among the highest of any large company globally. Tesla often scores even higher (~95-97 in some surveys). Both reflect intense customer-product fit and strong post-purchase satisfaction. Apple uses NPS as one of several CX metrics; it is reportedly tied to executive compensation. The high NPS predicts high retention (90%+ iPhone renewal), high advocacy (Apple users disproportionately recommend), and pricing power (premium prices despite alternatives). The metric is criticized academically (correlation with growth not as strong as Reichheld claimed) but remains industry-standard.
Don't lose marks for these
- Treating NPS as the only CX metric
- Comparing across cultures without adjustment (Asia tends lower scores)
- Failing to ask the "why?" follow-up
How to use this on the exam
Score-maximizing moves
- Show calculation
- Cite industry benchmarks
- Pair with open-ended question
When to use Net Promoter Score (NPS) (and when not to)
Use Net Promoter Score (NPS) when your assignment asks you to analyze, structure, or recommend — and when you have at least two data points to populate every cell of the framework. Skip it when the question is asking for a numerical answer or a single recommendation, since Net Promoter Score (NPS) is a structuring tool, not a calculator.