What is NPS? Complete Guide for Business and Employee Surveys

What is NPS?

NPS (Net Promoter Score) is a global standard for measuring customer and employee loyalty. The methodology was introduced by Fred Reichheld from Bain & Company in 2003.

The core NPS question:

“How likely are you to recommend our company/product/employer to a friend or colleague?”

Rating scale: 0 to 10.

How is NPS Calculated?

Respondents are divided into three groups:

• Promoters (9–10) — loyal enthusiasts
• Passives (7–8) — satisfied but unenthusiastic
• Detractors (0–6) — unhappy respondents

Formula:

NPS = % Promoters – % Detractors

Score range: from -100 to +100.

Types of NPS

1. Customer NPS (cNPS)

Measures customer loyalty toward a product or brand.

Used by:

• SaaS companies
• Banks
• E-commerce
• IT companies

2. Employee NPS (eNPS)

Measures employee engagement and workplace loyalty.

Used for:

• HR analytics
• Internal surveys
• Culture assessment

3. Transactional NPS

Measures satisfaction after specific interactions.

Why Should Businesses Implement NPS?

1. Growth Prediction

Higher NPS often correlates with business growth.

2. Reduced Churn

Early identification of detractors lowers customer attrition.

3. Product Improvement

Feedback reveals operational gaps.

4. HR Optimization

eNPS helps:

• reduce turnover
• improve engagement
• detect cultural issues

Who Should Use NPS?

• Small & medium businesses
• Enterprises
• IT companies
• HR departments
• Startups

How to Implement NPS Properly?

1. Define target audience (customers or employees)
2. Choose frequency (weekly, monthly, quarterly)
3. Ensure anonymity
4. Analyze qualitative feedback
5. Act on insights

Benefits of Using an Automated NPS Platform

• Fast survey creation
• Automatic score calculation
• Analytics & segmentation
• Anonymous responses
• Report export

NPS is not just a metric — it is a strategic management tool for loyalty and long-term growth.

NPS Implementation Examples & Business Impact

1. Customer NPS Implementation in a SaaS Company

Situation:

An IT SaaS company with 1,500 customers faced high churn (~12% quarterly).

Actions:

• Quarterly cNPS launched
• Added follow-up question: “What should we improve?”
• Detractors contacted by Customer Success within 48 hours

Results after 6 months:

• Churn reduced from 12% to 7%
• Identified 3 onboarding bottlenecks
• User activation increased by 18%
• NPS improved from +14 to +38

Business Impact: Direct increase in retention, higher LTV, more predictable revenue.

2. Employee NPS Implementation in a 200-Employee Company

Situation:

HR observed increasing turnover and declining engagement.

Actions:

• Anonymous quarterly eNPS launched
• Department-level analytics introduced
• One department scored -22

Root Causes Identified:

• Unclear KPIs
• Work overload
• Lack of management feedback

Corrective Measures:

• Introduced regular 1:1 meetings
• Reworked goal-setting framework
• Optimized workload distribution

Results after 9 months:

• eNPS increased from -5 to +31
• Employee turnover reduced by 27%
• Productivity metrics improved

Strategic Outcome: Stronger company culture and improved team stability.