Nov 26, 2019


Min Read


Divya Kandwal

Why Net Promoter Score® is important for your Customer Retention Strategy



Take a second and think, how do your best, most loyal customers act? They don’t just engage with your brand once but return again and again. Astute CX professionals know that return customers (and customer retention) are the backbone of a business. Why?

  • They boost revenue and have a high customer lifetime value.
  • Retaining existing customers is 5 times cheaper than acquiring new ones
  • Increasing customer retention rates by just 5% increases profits by 25% to 95%
  • 80 pc of your future profits will come from just 20 pc of your existing customers.

In short, what this means is the revenue stream you have been working for is already there, waiting to be utilised. In fact, it has been doing cartwheels right under your nose hoping to get noticed.

cx in subscription economy

So, Customer Retention is important for long term growth. And, Net Promoter Score® is brilliant loyalty metric.  In a sentence, NPS® measure the referability of your brand. It quantifies whether your customers like you enough to want to refer you to others.  

It is based on 1 simple question. Which is,

On a scale of 0 to 10, how likely are you to recommend (a product/service) to others?

The net score is calculated by subtracting the percentage of Detractors from Promoters.

(To read about how you should analyse NPS® to predict Financials, go here.)

NPS® for customer retention

One of the biggest strengths of a Net Promoter Score® program is that it divides all your customers into three main categories, based on their score.  

These categories are-


(More on that, here)

Net Promoter Score Numr research

Now, no brand can completely avoid customer complaints. But you can handle them effectively so that your customers feel heard. Net Promoter Score® makes it easier for brands to understand how their customers feel about them.  

What’s more, since NPS® is a real-time feedback metric, you can promptly contact disgruntled customers and deploy a close looping mechanism to engage them. Basically, NPS® helps you identify your most at-risk customers and lets you reel them back.  

This not only helps in increasing Customer Retention but also assists in building Brand Loyalty, the holy grain of all CX practices.  

(Short side note- you might be interested in how we utilise Churn Analytics and Churn Prediction to increase Retention for various companies. So, here’s the blog)


Customer Retention is crucial for prolonged growth. Think about it. Brands spend a massive amount of money on marketing, trying to get new customers who usually only give you ONE shot. Doesn’t it make more sense to spend resources nurturing your relationship with the customers you ALREADY have?

Loyal customers are not a (revenue) gift that keeps on giving. They are also your cheapest and most effective advertisers. (Everyone now knows that word-of-mouth advertising is gold). So, there really is no good reason for you to not utilise NPS® for Customer Retention in your CX initiative.  

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