Net Promoter Score (NPS)
A customer loyalty metric based on the question 'How likely are you to recommend this product to a colleague?' scored from 0-10, with results categorized into Promoters (9-10), Passives (7-8), and Detractors (0-6).
NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters, yielding a score between -100 and +100. A score above 0 means more promoters than detractors. Above 30 is considered good. Above 50 is excellent. Above 70 is world-class. The metric is widely used because it is simple to collect, easy to benchmark, and correlates with organic growth: companies with higher NPS grow faster through word of mouth.
Despite its popularity, NPS has significant limitations as a standalone metric. It captures a snapshot of sentiment but does not explain why customers feel the way they do. It can be gamed by survey timing and sampling. It does not directly measure behavior, and a customer who scores 9 might never actually recommend the product. The follow-up question "What is the primary reason for your score?" provides more actionable insight than the number itself.
For growth teams, NPS is most valuable as a leading indicator and segmentation tool. Track NPS by cohort to see if newer customers are more or less satisfied. Segment by Promoter/Passive/Detractor to provide differentiated experiences. Use Promoters as a referral pool. Address Detractor feedback to reduce churn. And combine NPS with behavioral data to build a more complete picture of customer health that goes beyond self-reported sentiment.
Related Terms
Growth Loop
A self-reinforcing cycle where each cohort of users generates inputs (data, content, referrals) that attract the next cohort, creating compounding growth.
Churn
The rate at which customers stop using or paying for a product over a given period, typically measured as monthly or annual churn percentage.
Activation Rate
The percentage of new signups who complete a key action (the 'aha moment') that correlates with long-term retention and product value realization.
Product-Led Growth (PLG)
A go-to-market strategy where the product itself drives acquisition, activation, and expansion through self-serve experiences rather than sales-led motions.
Viral Coefficient (K-Factor)
The average number of new users each existing user brings to the product, where a K-factor above 1.0 indicates self-sustaining viral growth.
Net Revenue Retention (NRR)
The percentage of recurring revenue retained from existing customers over a period, including expansion, contraction, and churn — where 100%+ indicates growth without new customers.