Net Promoter Score
CRM & RetentionAlso: NPS · Net Promoter
Quick definition
Net Promoter Score (NPS) is a customer loyalty metric. It asks customers one question: how likely are you to recommend us, on a scale of zero to ten. Customers scoring nine or ten are Promoters. Seven or eight are Passives. Zero to six are Detractors. NPS equals the percentage of Promoters minus the percentage of Detractors.
A positive score means more Promoters than Detractors. Zero is neutral. Anything above zero is technically passing. The trend across quarters tells you more than any single reading.
How it varies across Australia
NPS varies considerably across Australian industries. Businesses in categories with strong personal relationships, such as financial advice and professional services, often post higher scores than retail or telco. The more useful signal is whether your NPS is moving, and whether it correlates with retention in your own data.
See retention and loyalty patterns across Australian industries →The three customer groups
Scored nine or ten. Likely to recommend you and less likely to churn.
Score: 9-10Scored seven or eight. Satisfied but not enthusiastic. Excluded from the calculation.
Score: 7-8Scored zero to six. Unhappy customers who can damage your reputation through word of mouth.
Score: 0-6What it actually means
The NPS survey is one question: 'How likely are you to recommend us to a friend or colleague, on a scale of zero to ten?' The appeal is the simplicity. One question, one number, easy to track over time and easy to compare across teams.
The calculation is simple enough. Count the percentage of respondents who gave you a nine or ten (Promoters). Count the percentage who gave you a zero through six (Detractors). Subtract one from the other. The result sits somewhere between minus 100 (everyone is a Detractor) and plus 100 (everyone is a Promoter).
Passives, those who gave a seven or eight, are not counted in either group. They disappear from the formula entirely, which is one of the more counterintuitive things about the metric.
Where NPS earns its place is in trend-watching. A score trending upward over six quarters is a signal that something is working. A score collapsing in a specific segment is a signal that something is wrong. The score by itself is rarely the interesting part. The direction and the segmentation are.
NPS is a useful signal and a terrible religion. The businesses that obsess over the number instead of the reasons behind it end up with a great score and the same underlying problems.
How to calculate it
NPS = % Promoters minus % Detractors
Worked example. You survey 200 customers. 90 give you a nine or ten (Promoters). 40 give you a seven or eight (Passives). 70 give you a zero through six (Detractors). Promoter percentage = 90 ÷ 200 = 45%. Detractor percentage = 70 ÷ 200 = 35%. NPS = 45 minus 35 = 10.
The Australian context
Australian consumers score more conservatively than US consumers on ten-point scales. A well-documented cultural tendency toward cautious ratings means raw NPS scores from Australian samples often run lower than equivalent US cohorts, even when satisfaction is comparable. Benchmarking Australian NPS against US-published industry averages will usually make your number look worse than it is.
Australian privacy rules under the Privacy Act also affect how you can store and use NPS response data, particularly if you're linking survey responses to individual customer records in your CRM. Make sure your survey tool and data handling match your privacy policy.
Where people get this wrong
Related terms
Common questions
What is a good NPS score in Australia?
Any positive score means more Promoters than Detractors, which is a reasonable baseline. Australian scores tend to run lower than US equivalents due to cultural rating differences. What matters more than the absolute number is whether your score is improving over time and whether it correlates with retention in your own data.
How often should I run an NPS survey?
For transactional businesses, after each purchase or key interaction. For subscription businesses, quarterly or twice a year is typical. Running it more often than you can act on the results defeats the purpose. Survey cadence should match your capacity to follow up.
Why are Passives excluded from the NPS calculation?
The original research by Fred Reichheld found that Promoters and Detractors were the groups most predictive of growth and churn. Passives were satisfied but not actively driving either outcome. The exclusion is a design choice, not a mathematical necessity, and it is one of the more criticised aspects of the methodology.
Can NPS predict churn?
At a cohort level, yes. Customers who score zero to six churn at higher rates than those who score nine or ten. The relationship is directional, not precise. NPS is a leading indicator worth tracking alongside churn rate, not a substitute for it.
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About New Rebellion
New Rebellion is a marketing intelligence consultancy. We build tools, score Australian businesses on how their marketing actually performs, and publish Debrief every day. This dictionary is part of how we work in the open.
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