Net Promoter Score (NPS): Complete Guide for Businesses

Customer experience has become the new battleground for growth. People can copy products, match prices, but a loyal customer base remains priceless. One of the simplest yet most powerful ways to measure customer loyalty is through the Net Promoter Score (NPS).

If you want to see if your customers are happy and would recommend your product or service, use NPS. In this guide, we’ll break down what NPS is, why it matters, how to calculate it, and the exact steps you can take to make the most of it in 2025.

We’ll also explore how customer feedback, survey questions, and the customer journey can influence your score.

What is the Net Promoter Score (NPS)?

The Net Promoter Score is a customer experience metric designed to measure one thing: customer loyalty. It revolves around a single, straightforward NPS question:

“On a scale of 0–10, how likely are you to recommend our product or service to a friend or colleague?”

The genius of NPS lies in its simplicity. With just one survey question, you get a snapshot of how customers feel about your business. Unlike long, complicated surveys, NPS removes friction, increases the response rate, and helps you measure customer sentiment efficiently.

Here’s how responses are categorized:

Promoters (9–10): These are your loyal customers. They love your product, often make repeat purchases, and actively recommend you to others. Promoters are the backbone of organic growth and drive a high percentage of promoters in your customer base.

Passives (7–8): These customers are somewhat satisfied but not enthusiastic. They won’t actively promote you, and they’re vulnerable to switching if they find a better option.

Detractors (0–6): These are unhappy customers. They’re more likely to leave negative reviews, discourage others from buying from you, and eventually churn. Subtracting the percentage of detractors from the percentage of promoters gives you the NPS.

The score itself ranges from -100 to +100.

• If all customers are detractors, your score is -100.

• If all customers are promoters, your score is +100.

Most businesses fall somewhere in between.

This makes NPS a universal metric, easy to compare across industries and companies. Fred Reichheld, the creator of NPS, emphasizes that it predicts customer loyalty better than other metrics.

Why is Net Promoter Score Important?

Every business wants loyal customers, but loyalty is hard to measure. Revenue numbers tell you what happened in the past. Churn rates tell you who left. NPS, on the other hand, predicts the future by showing how your customers feel about you right now.

Here are the main reasons NPS is so important:

It predicts growth

Research shows that businesses with higher NPS scores tend to grow faster than their competitors. Why? Happy customers bring in new business through word-of-mouth. This is the most trusted marketing channel. It helps increase the number of loyal customers.

It improves retention

Churn is expensive. Acquiring a new customer can cost five times more than keeping an existing one. NPS highlights unhappy customers early, giving you the chance to fix problems before they walk away. Measuring customer loyalty through NPS helps you reduce detractors from the percentage of your customer base.

It aligns teams

Because the score is simple, NPS is a metric everyone can understand, from your CEO to frontline employees. It becomes a shared goal for product, sales, marketing, and customer support teams, driving action across the customer journey.

It benchmarks performance

NPS allows you to compare your performance against industry averages and your own historical NPS benchmarks. This helps you understand if you’re improving, staying the same, or falling behind.

It drives action

Beyond the score itself, NPS encourages follow-up. By asking customers why they gave a certain score, you gather useful information. This helps you improve your product, service, or customer support. Tracking customer feedback regularly helps ensure your product or service meets expectations.

In short, NPS is not just a vanity metric. It’s a tool that, when used consistently, can guide your entire customer experience strategy.

How to Calculate Net Promoter Score (NPS)

The good news is that calculating NPS is simple. Unlike complex survey analytics that require advanced statistical tools, NPS boils down to just a few basic steps.

Step 1: Collect responses

Start by sending out your NPS survey. Make sure it includes the core NPS question:

“On a scale of 0–10, how likely are you to recommend us to a friend or colleague?”

You can send it via email, embed it in your app, or show it on your website. The key is to get enough responses to make your data reliable.

For smaller businesses, even 50–100 responses can give useful insights. For larger companies, aim for several hundred or more. A higher response rate ensures your measure customer loyalty efforts are based on robust data. Learn how to create an NPS survey with Formester.

Step 2: Categorize responses

Once the results are in, divide them into three groups:

• Promoters (9–10)

• Passives (7–8)

• Detractors (0–6)

• Passives don’t affect the score but still matter for follow-up analysis.

Step 3: Calculate percentages

Find out what percentage of total responses fall into each group.

Formula:

% = (Number of respondents in category ÷ Total number of respondents) × 100

Step 4: Apply the NPS formula

• Now subtract the percentage of detractors from the percentage of promoters.

• NPS = % Promoters – % Detractors

• This gives you a score between -100 and +100.

Example 1: Small Business Scenario

A coffee shop surveys 100 customers:

• 65 gave 9 or 10 (Promoters)

• 20 gave 7 or 8 (Passives)

• 15 gave 0–6 (Detractors)

Promoters = 65%

Detractors = 15%

NPS = 65 – 15 = 50

This shows customers love your coffee shop and are likely to recommend it. The response rate and percentage of promoters indicate strong loyalty, while the percentage of detractors highlights areas to improve.

Example 2: SaaS Company Scenario

A SaaS product collects 500 responses:

• 300 promoters → 60%

• 100 passives → 20%

• 100 detractors → 20%

• NPS = 60 – 20 = 40

This is positive but shows room for improvement, especially in reducing detractors. Measuring customer feedback and acting on it is key to converting passives into promoters.

Example 3: Retail Brand Scenario

A retail chain surveys 1,000 customers:

• 700 promoters → 70%

• 200 passives → 20%

• 100 detractors → 10%

• NPS = 70 – 10 = 60

This indicates strong loyalty and a good net promoter score. Understanding the customer journey and addressing complaints from detractors can push this score even higher.

Why Percentages Matter More than Raw Numbers

Calculating percentages rather than just subtracting raw promoter and detractor counts matters. Imagine two companies:

• Company A: 70 promoters and 30 detractors out of 100 responses → NPS 40

• Company B: 700 promoters and 300 detractors out of 10,000 responses → NPS 40

Both companies have the same score, but Company B’s sample size and response rate make the result more reliable. Measuring customer loyalty accurately requires tracking the percentage of promoters and detractors, not just counts.

Why Industry Matters

Customer expectations vary widely by industry:

Hospitality (hotels, airlines): Even small service gaps create detractors. A score of 40 is impressive.

Software and SaaS: Customers expect constant improvement and easy-to-use features. Scores above 30 are strong.

Retail: Experiences can be inconsistent across locations. A score around 50 shows trust and repeat business.

Industry Benchmarks:

• Technology → 30 to 40

• Financial services → 25 to 35

• Healthcare → 40 to 50

• E-commerce → 45 to 60

• Hospitality → 30 to 40

• Telecom → 20 to 30

Being above your industry NPS benchmarks shows strong performance in building loyal customers.

Interpreting Scores by Business Stage

• Startups: Early NPS may fluctuate. Focus less on the number and more on learning from detractors.

• Growing businesses: A steady score of 30+ shows you’ve built loyalty. Turn passives into promoters.

• Established brands: Scores above 50 indicate strong customer advocacy. Protect it by listening closely to feedback.

Example Scenarios:

• SaaS startup with NPS 20 → Shows promoters exist but needs to reduce detractors.

• Retail chain with NPS 55 → Excellent. Loyal customers and strong repeat purchases.

• Airline with NPS 35 → Above industry average, giving a competitive edge in customer support.

The Bigger Picture

A good net promoter score isn’t about chasing a magic number. Focus on:

• Doing better than your industry average

• Improving over time

• Increasing promoters and decreasing detractors

Tracking NPS alongside customer feedback, survey questions, and the customer journey creates a complete picture of loyalty and satisfaction.

Pro Tip

Don’t obsess over the score alone. Pair NPS with follow-up questions like:

“What’s the main reason for your score?”

“What can we do to improve?”

This turns the number into actionable insights and helps improve the product or service and overall customer support.

Conclusion

Net Promoter Score is more than just a number. It’s an easy and strong way to see how customers feel about your product or service. It shows where you stand against competitors and what you need to improve. A good NPS score shows that people trust you and are ready to recommend you, while a low score highlights areas that need attention.

The real value is using NPS to guide actions. This means turning promoters into advocates, passives into fans, and detractors into loyal customers. Check it often, respond to customer feedback, and you will see how it boosts growth, keeps customers, and builds better relationships. Measuring customer loyalty with NPS helps you see the percentage of promoters and detractors. It also shows overall satisfaction among your customers.