Customer loyalty and NPS methodology
Currently, the most commonly known metric for customer loyalty is the net promoter score, or NPS. It is a metric that measures customer loyalty. It is based on the idea that customers can be divided into three categories:
- Promoters are customers who are loyal to the brand and will recommend it to others
- Passives are customers who are satisfied with the brand but are not loyal to it
- Detractors are customers who are dissatisfied with the brand and will not recommend it to others
NPS is used by many of the world’s leading companies, including Apple, Amazon, and Netflix.
It is calculated by taking the proportion of promoters and subtracting from it the proportion of detractors, where promoters are respondents who answer 9 or 10 to the question “How likely are you to recommend this company to a friend or colleague?” and detractors are respondents who answer 0 to 6 to the same question.
