Credit Union Management School (CMS) Year 3 Practice Test

Net Promoter Score measures how customers feel about a brand and how likely they are to recommend it to others. That link to word-of-mouth makes it a useful indicator of reputation, because promoters tend to spread positive recommendations while detractors can harm how the brand is perceived. Net Promoter Score was created by Fred Reichheld (with Bain & Company and Satmetrix) as a simple way to gauge loyalty and growth potential. It uses a single question on a 0–10 scale to categorize respondents into promoters (9–10), passives (7–8), and detractors (0–6). The score is the percentage of promoters minus the percentage of detractors, yielding a range from -100 to +100. This focus on willingness to recommend is why the metric is associated with reputation. It isn’t primarily a measure of cost management, nor a tool for customer acquisition cost, nor an employee engagement index.