NPS (Net Promoter Score)
Definition
Net Promoter Score, or NPS, is a 0-to-100 metric that measures how likely customers are to recommend a business to friends and family.
What NPS (Net Promoter Score) Means for Your Business
What it means
NPS is based on one question: 'How likely are you to recommend us on a 0 to 10 scale?' Scores of 9 to 10 are promoters, 7 to 8 are passives, and 0 to 6 are detractors. The score is the promoter percentage minus the detractor percentage.
Why it matters
NPS is the single best predictor of organic growth. High NPS businesses grow from referrals with little marketing spend. Low NPS businesses fight for every new customer. World-class service businesses run NPS above 70.
How contractors use it
Shops survey customers with a single NPS question after every job, track the rolling 90-day average, and dig into detractors to find and fix root causes. Some tie tech bonuses to their personal NPS.
Real-World Example
A plumbing company ran NPS of 52 for two quarters. After dispatching root-cause fixes on the top 3 complaint patterns, NPS rose to 78 and referral-sourced revenue grew from 14% to 32% of the book.
Related Terms
Review Velocity
Review velocity is the rate at which a business earns new online reviews, typically measured as reviews per week or per month.
Customer Retention
Customer retention is the percentage of customers who continue doing business with a company over a defined time period, usually measured annually.
Reputation Management
Reputation management is the ongoing practice of monitoring, earning, and responding to online reviews to maintain a positive public image for the business.
Customer Churn
Customer churn is the percentage of customers who stop doing business with a company over a given period, usually measured annually.
Customer Lifetime Value
Customer lifetime value, or CLV, is the total amount of revenue a customer is expected to generate for a business over the entire duration of the relationship.
Put This Into Practice with Free Software
Kaldr Tech handles nps (net promoter score) and everything else you need to run your shop. $0/month, 3.5% + 30¢ per transaction.