Customers are divided into three groups based on their responses:
To calculate the Net Promoter Score for a retailer, the percentage of detractors is subtracted from the percentage of promoters. The score can range from -100 (if all customers are detractors) to +100 (if all customers are promoters). A positive NPS indicates that there are more promoters than detractors, while a negative NPS suggests the opposite.
NPS is valuable for retailers as it provides a clear and easy-to-understand metric to gauge customer loyalty and identify areas for improvement. A higher NPS generally indicates a more loyal customer base, which can lead to increased customer retention, positive word-of-mouth, and ultimately, higher business growth. Retailers can use NPS data to implement strategies to address customer concerns, enhance customer experience, and build stronger relationships with their customers. It is essential to regularly measure NPS and track changes over time to monitor the effectiveness of customer satisfaction initiatives.