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Netpromoter and customer satisfaction



Net Promoter Score (NPS) is a management tool used by businesses to gauge the loyalty of their customer relationships. It's based on the idea that customers can be divided into three categories: promoters, passives, and detractors. 

Customers are typically asked a single question: "How likely are you to recommend our company/product/service to a friend or colleague?" They respond on a scale from 0 to 10. 

- Promoters (score 9-10): Customers who are highly satisfied and likely to recommend.
- Passives (score 7-8): Customers who are satisfied but not enthusiastic enough to actively promote.
- Detractors (score 0-6): Customers who are dissatisfied and may spread negative word-of-mouth.

The NPS is calculated by subtracting the percentage of detractors from the percentage of promoters, resulting in a score that can range from -100 to +100. A positive score indicates more promoters than detractors and suggests that a business has a strong base of loyal customers. NPS is used as a benchmark for measuring and improving customer loyalty and satisfaction over time.

Net Promoter Score (NPS) and customer satisfaction are both metrics used by businesses to assess the loyalty and satisfaction of their customers, but they approach this assessment in slightly different ways.

1. Net Promoter Score (NPS)
   - NPS is a metric that measures the likelihood of customers to recommend a company's products or services to others.
   - Customers are typically asked a single question: "How likely are you to recommend our company/product/service to a friend or colleague?" They respond on a scale from 0 to 10.
   - Based on their responses, customers are categorized into three groups:
     - Promoters (score 9-10): Customers who are highly satisfied and likely to recommend.
     - Passives (score 7-8): Customers who are satisfied but not enthusiastic enough to actively promote.
     - Detractors (score 0-6): Customers who are dissatisfied and may spread negative word-of-mouth.
   - The NPS is calculated by subtracting the percentage of detractors from the percentage of promoters, resulting in a score that can range from -100 to +100.

2. Customer Satisfaction (CSAT)
   - CSAT measures the overall satisfaction of customers with a specific interaction, transaction, or experience with a company.
   - Customers are usually asked a question like: "How satisfied are you with [product/service/interaction]?" They respond using a scale (e.g., Very Satisfied, Satisfied, Neutral, Dissatisfied, Very Dissatisfied).
   - CSAT scores are calculated by dividing the number of satisfied customers (those who select "Satisfied" or "Very Satisfied") by the total number of respondents and multiplying by 100, resulting in a percentage.

While NPS focuses on the likelihood of recommendations and divides customers into promoters, passives, and detractors, CSAT directly measures the satisfaction level of customers with specific experiences or interactions. Both metrics provide valuable insights into customer sentiment, and businesses often use them in conjunction to understand overall customer loyalty and satisfaction levels.

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