Net Promoter Score methodology – does it measure intention, or behaviour?

Net Promoter or Net Promoter Score (NPS) is essentially a metric that measures customer loyalty.

It was first developed in 1993 by Fred Reichheld of the management consultancy company Bain & Company. Widely praised for its corporate culture, Bain & Company has been ranked #1 in Glassdoor’s Best Places to Work awards four times – in 2012, 2014, 2017, and 2019 – setting a new record.

The Net Promoter Score is calculated based on responses to this one single question: 

“How likely is it that you would recommend our company/product/service to a friend or colleague?”

The scoring for this answer is most often based on a 0 to 10 scale.

People who respond with a score of 9 to 10 are considered loyal customers and are most likely to make positive referrals to other clients. These are the Promoters.

Responses of 7 and 8 are labeled Passives, whereas those who respond with a score of 0 to 6 are labeled Detractors.

The Net Promoter Score is calculated by subtracting the percentage of customers who are Detractors from the percentage of customers who are Promoters.

Promoters (%) – Detractors (%) = NPS

There is however criticism regarding NPS, with arguments stating that the Net Promoter Score uses a scale that may not increase predictive validity and that it fails to predict loyalty behaviours.

In a recent article, Forbes magazine calls for companies to retire the NPS methodology for the following reasons:

  • It doesn’t explain why a customer would recommend the firm
  • It doesn’t take into account consumer demographics
  • It can incentivize undesirable behaviour

Whether you are a fan or not, it is definitely a useful tool and it is used by many companies. Some of the most relevant NPS software tools in 2019 are: ZenDesk, HotJar, LiveChat and Promoter.io

Net Promoter, Net Promoter Score, and NPS are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc. and Fred Reichheld.

Dragos77

Dragos Vuia is a Vancouver-based UX Designer that's passionate about user experience strategy, cognitive-based design decisions, and innovative mobile interactions, who also travelled to 108 countries and territories so far, carefully documenting these experiences through photos, videos and stories.