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Is the Net Promoter Score (NPS) the right metric for your company?

Net Promoter Score (NPS) is a widely used metric for measuring customer loyalty, embraced by companies like eBay, PayPal, and Amazon. Developed by Fred Reichheld from Bain & Company, it classifies customers into three categories: Promoters, Passives, and Detractors.

NPS is measured on a scale of 0–10, based on likelihood of recommendation: “How likely is it that you would recommend company X to a friend or colleague?” Customers who provide a score of 9–10 are categorized as promoters, those who give a score of 8–7 are dubbed passive and those who give a score of six and below (6–0) are classified as detractors. Any company’s NPS score is equal to the percentage of customers who are promoters subtracted by percent of customers who are detractors. NPS = Promoters — Detractors

But is NPS the best metric? Let’s look at it more closely. Many researchers have pointed out problems with NPS, and these are my thoughts based on my experience, other researchers have also identified the same issues with NPS.

The Three Problems with NPS

Problem 1: Flawed question

• In my opinion, the NPS question is overall flawed since it measures intention (how likely are you to recommend a company) not behavior. As researchers we quickly learn not to ask respondents what they say they would do (intent) versus what they do (behavior). But NPS does exactly that. In addition, we rarely recommend a company to friends and family. Can you remember the last time you picked up the phone to recommend a company to friends or family? Probably not.

Problem 2: Variability and lack of labels

• Lack of Clear Labels: Without clear definitions, a score of 9 might mean ‘extremely good’ to some but not to others. Precise labeling for each score is crucial to eliminate response bias.
• High Variability: The scale goes from 0 to 10 meaning that there are 11 options that a respondent can choose from. That is too many options putting heavy cognitive load on respondents, ideally there should not be more than 5 or 7 options.
• Wider Range for Detractors: Detractors, scoring between 0 and 6, have a wider range compared to the narrow bands for Promoters (9–10) and Passives (7–8). This unequal range can skew results, unfairly amplifying negative perceptions.

Problem 3: Cultural Differences in Scoring

• Varied Scoring Habits: In cross-national studies, people from different cultures score differently. For instance, a score of 8 might signify excellent service in India, but NPS categorizes it as passive. Research has shown cross-culture variability in scoring, but there is no way to account for this in NPS even when conducting a global study.

Alternative Suggestions

1. Rethink NPS Scaling: Understand that an 8/10 might actually reflect a promoter rather than a passive. Report these separately if needed.
2. Segment Customers: Acknowledge regional and cultural differences when interpreting scores.
3. Additional Labels: Provide clear definitions for each 3 types of segments to ensure uniform understanding. Ideally, each score should be labeled, but it’s hard to do that for a 11-point scale.

More Radical Advice

Consider replacing NPS with Customer Satisfaction Score (CSAT), which can be more effectively measured on a 5 or 7-point labeled scale. In companies where I have worked and run trackers to measure customer happiness and engagement over time, I have always used a satisfaction metric and found it to be a good metric to measure future retention or loyalty.

Concluding Thoughts

These are my personal views, informed by extensive research and experience. They reflect a critical look from my perspective at a popular metric and suggest ways to improve it for more accurate customer loyalty measurement.

PS: This blog is a rewrite of this Linkedin article that I wrote in 2015.