NPS
CRM & RetentionAlso: Net Promoter Score
Quick definition
Net Promoter Score (NPS) is a measure of customer loyalty based on one question: how likely are you to recommend this business to a friend or colleague, on a scale of zero to ten. Respondents are split into Promoters (9-10), Passives (7-8) and Detractors (0-6). NPS is calculated as the percentage of Promoters minus the percentage of Detractors.
The number ranges from -100 to +100. Context matters more than the absolute score. Track the trend and segment by customer cohort before comparing against industry figures.
How it varies across Australia
NPS varies sharply across Australian industries. Service-heavy categories where trust and personal relationships matter tend to produce higher scores than transactional or commoditised categories. A score that looks strong in one industry can be mediocre in another, which is why cross-industry comparisons rarely hold up.
See loyalty and retention patterns across Australian industries →How respondents are grouped
Customers who score 9 or 10. Likely to recommend and less likely to churn.
Scores 9-10Customers who score 7 or 8. Satisfied but not enthusiastic. Not counted in the formula.
Scores 7-8Customers who score 0 to 6. At risk of churning and more likely to share negative experiences.
Scores 0-6What it actually means
NPS is the most-cited customer loyalty metric in business, which is part of its problem. The number gets reported in board packs and compared against industry benchmarks, and somewhere along the way the follow-up work gets skipped.
The score itself is a ratio of enthusiasm. More promoters than detractors means your customer base skews positive. More detractors than promoters means you have a loyalty problem before you have a retention problem. But neither number tells you why.
The single most valuable thing about running NPS isn't the score. It's the open-text follow-up: 'What's the main reason for your score?' That's where the signal lives. A business with an NPS of 40 and a rigorous follow-up programme is building something. A business with an NPS of 60 and no follow-up programme is just collecting a number.
Treat NPS as the start of a conversation, not the end of one.
NPS tells you who loves you and who's about to leave. The score isn't the answer. What you do next is.
How to calculate it
NPS = % Promoters minus % Detractors
Worked example. You survey 200 customers. 90 score 9 or 10 (Promoters = 45%). 30 score 0 to 6 (Detractors = 15%). 80 score 7 or 8 (Passives, not counted). NPS = 45 minus 15 = 30.
The Australian context
Australian consumers tend to cluster in the middle of the NPS scale more than US respondents, which means Australian NPS scores often look lower than US benchmarks for the same underlying sentiment. This reflects a cultural difference in how Australians use rating scales, not necessarily weaker loyalty.
Australian businesses running NPS for the first time often benchmark against US-sourced industry data and conclude their score is poor. Before drawing that conclusion, check whether the survey method, customer segment and question wording match what the benchmark used.
Where people get this wrong
Related terms
Common questions
What is a good NPS score for an Australian business?
There is no universal answer. Scores vary by industry, survey method and customer segment. A positive score means more Promoters than Detractors, which is the baseline. What matters more is whether your score is improving over time and how it compares against your own historical average.
How often should I run an NPS survey?
Relational NPS works well once or twice a year sent to the full customer base. Transactional NPS works best triggered within 24-48 hours of a specific interaction like a support ticket or purchase. Running both at the same time dilutes response rates and conflates two different signals.
Why are Passives not included in the NPS formula?
Passives are satisfied enough not to complain but not enthusiastic enough to recommend. They don't contribute to the score because they represent a neutral position. They are still worth tracking separately as a pool of customers with conversion potential.
Can NPS predict churn?
It correlates with churn risk. Detractors churn at higher rates than Promoters across most industries. NPS is a leading signal, not a guarantee. Used alongside cohort analysis and product usage data, it becomes a more reliable early-warning system.
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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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