Net Promoter Score measures customer loyalty by asking how likely customers are to recommend you on a 0 to 10 scale. You subtract the percentage of detractors (0 to 6) from promoters (9 to 10). The result, from minus 100 to 100, gauges satisfaction and likelihood of referral.

For a referral-driven business, NPS is a leading indicator of your growth engine's health. Promoters are the source of the word of mouth that has carried you. A rising NPS signals more referrals coming; a falling one warns that your cheapest acquisition channel is drying up before it shows in the revenue numbers.

Example:

Of surveyed customers, 60% are promoters and 15% are detractors. NPS is 60 - 15 = 45.

What is a good Net Promoter Score?

 Scores above 0 mean more promoters than detractors. Above 30 is generally good, and above 50 is excellent, though benchmarks vary by industry.

Why does NPS matter for a referral-led business?

 Promoters drive referrals. NPS signals whether your word-of-mouth engine is strengthening or weakening before it shows up in new-customer numbers.

Source: Bain & Company, Net Promoter System (Fred Reichheld, originator of NPS)