It's always a good idea to get inside customers' minds and see what they think about your products, business, or brand. It helps you identify trends and shows you where you can improve. One of the best ways to gain these insights is by measuring your Net Promoter® Score (NPS®).

You might be skeptical about NPS, thinking it’s just another metric.

Maybe you already track your customer satisfaction score (CSAT) or customer effort score (CES), but aren't sure if NPS offers the same worth. Or, you might be doubtful whether asking for feedback really pays off.

So, what are the benefits of NPS? And, how can it help you create a better experience for your customers?

In this blog, we’ll explore 11 NPS benefits, showing how NPS can improve satisfaction, drive growth, and set your business up for long-term success.

What Is the Net Promoter Score?

NPS is a simple but powerful customer experience metric that helps you measure customer loyalty and satisfaction.

Developed by Fred Reichheld, a partner at Bain & Company in 2003, NPS has become the standard for measuring customer loyalty. It’s used by millions of businesses worldwide to track customer satisfaction and loyalty trends.

You can calculate your NPS with one key question: “On a scale of 0 to 10, how likely are you to recommend this company/product/service to a friend?”

After customers answer the survey, their responses are grouped into three categories:

• Promoters (9-10): These customers are loyal and enthusiastic, and are likely to advocate for your brand.
• Passives (7-8): They are satisfied, but not passionate enough to become promoters.
• Detractors (0-6): These customers are dissatisfied and unlikely to recommend your brand. They may even deter others.

For strategies on addressing negative feedback, check out our guide on converting a nps detractor.

For a more streamlined analysis of your customer insights, many businesses also leverage an nps dashboard to visualize trends over time.

Once you’ve categorized your customers, you can calculate your NPS using the formula:

NPS = (% of promoters) - (% of detractors)

The result gives you a snapshot of customer loyalty and helps you gauge how well your business is doing in the eyes of your customers.

It’s easy to assume that a scale of 100 means only a perfect 100 counts. But in reality, it’s hard to imply a single NPS as being “good” since each industry has its own benchmarks.

For example, even though the IT services industry saw a drop in NPS in 2023, it still reached some of the highest scores since 2011. Back when NPS was first measured in IT services, it had an NPS of just 13%, and even dropped 2 points the next year. 

However, the industry made a big jump in 2020, reaching 38% and has stayed above 40% since.

For context, NPS standards generally consider scores of 50% or higher to be “excellent,” while scores above 70% are considered “world-class.”

To visualize a world-class NPS, look at companies like Starbucks (77%) and USAA (75%). In contrast, companies like Comcast, known for poor customer service, have a -25% NPS. This highlights the wide disparity in customer experiences.

As service standards improve across industries, customer expectations continue to rise. Businesses that fail to meet these evolving demands risk falling behind. Now, let’s explore the benefits of NPS and why measuring it is essential.

11 Key Benefits of the Net Promoter Score (NPS)

NPS can be applied across various levels, from your entire industry to your brand, and even down to specific departments, accounts, or business units. This flexibility allows businesses to compare themselves to competitors while also identifying areas of strength and improvement within their organization.

Here are some key benefits of NPS for organizations:

1. It measures customer loyalty

Customer loyalty is crucial for sustained revenue and profit growth. According to a CGT study, 82% of consumers want the brands they shop with to share their values. If they don’t feel that connection, they’ll take their business elsewhere.

Understanding customer loyalty requires knowing their feelings toward your products, services, or brand. NPS surveys help you gauge how likely customers are to recommend your business to others. 

With the score in hand, you can ask follow-up questions to uncover deeper insights into their sentiments. NPS software can turn this feedback into actionable, customer-driven data.

2. It helps you predict business growth

NPS data helps businesses turn customer feedback into reliable, recurring revenue. While it’s not the only factor driving growth, a high NPS score closely correlates with business success. 

Here’s how:

• Happy customers who are willing to recommend your brand are much more likely to return for future purchases
• A high score shows that customers are not just satisfied—they’re actively referring others, driving growth
• Companies with a strong NPS tend to see better customer retention and lower churn rates. This leads to greater customer lifetime value (LTV), a key driver for long-term success

Case Study: How Herbein Used NPS to Save Clients, Drive Revenue, and Strengthen Marketing

Herbein, a Pennsylvania-based CPA firm, struggled with DIY client surveys. Their marketing team was overwhelmed with raw data but gained no clear insights.

Partnering with ClearlyRated changed that. Their first survey saved a Top 50 at-risk client by identifying dissatisfaction early. Another survey revealed high demand for HR advisory services, leading to an acquisition and 30% revenue growth in year one. ClearlyRated’s structured surveys also uncovered cross-selling opportunities, generating eager leads.

Herbein now strengthens proposals with client testimonials, making pitches more persuasive. Internally, sharing positive feedback boosts morale and reinforces service excellence. They even created "The Herbein Experience", a training guide based on real survey insights, now part of new employee onboarding.

With ClearlyRated, Herbein turns NPS feedback into retention, revenue, and growth.

3. It can easily collect customer feedback

One of the key advantages of NPS is how simple it is to create and use. The survey question focuses on one thing—whether customers would recommend your business. Follow-up questions help you understand why they would or wouldn’t recommend your brand.

You can send the survey via email, SMS, WhatsApp, pop-ups, or phone calls. The formula to calculate the score is simple and can be done with a basic spreadsheet.

Or, if you choose to use powerful nps tools like ClearlyRated, you can easily collect, analyze, and leverage client feedback. For additional tips on crafting the ideal survey, check out our resource on NPS Survey Questions.

4. It improves customer experience

NPS gives clear insights into what customers love and where they feel let down. Positive scores show what you’re doing right, while negative scores highlight areas for improvement.

You can use this feedback to adjust your strategies—whether it’s refining customer support, improving product features, or optimizing services. Using NPS as a guide lets businesses make data-driven decisions that directly impact customer satisfaction. 

Plus, tracking NPS over time shows how your changes are positively shaping the overall customer journey.

5. It recognizes brand advocates

"It's essential that we offer a good experience to our clients across the board. We want to be certain that both our Praxity partners and we, ourselves, are delivering that. This is why we're so glad to gain the ability to measure our customer experience (CX) with ClearlyRated."

Bernardo del Río Managing Partner, JA Del Río

NPS helps identify your advocates. When customers give you a score of 9 or 10, it's a sign they truly believe in your brand. These promoters are the key to spreading positive word-of-mouth and driving more business your way. 

Regularly checking your NPS lets you track who your advocates are and whether you're gaining or losing them. Knowing this helps you focus on nurturing these relationships and adjusting strategies to grow your brand presence. 

Remember, the more advocates you have, the more success you'll see in the long run.

6. It reduces customer churn

It’s impossible to achieve business growth with high churn rates. If customers leave, it’s a sign something needs to be fixed. Tracking your churn rate helps you spot detractors who may be unhappy with your product or service. Once you know who they are, you can reach out to resolve issues and improve their experience.

To calculate churn rate, use this formula:

Churn Rate = (Customers Lost / Total Customers at Start of Period) x 100

Now that you’ve identified your churn rate, you can take action. Here are some strategies to use NPS to improve retention:

• Follow up with detractors: Reach out to customers who gave low scores. Ask what went wrong and work to resolve their issues.
• Personalized outreach: Send tailored offers or discounts to at-risk customers based on their feedback.
• Address pain points: Use feedback to identify common issues that lead to churn and fix them quickly.
• Survey regularly: Use NPS surveys to monitor satisfaction and track the improvements to reduce churn.
• Focus on customer success: Ensure your customers understand how to get the most value from your product or service.

These strategies help keep your customers satisfied and reduce the likelihood of them leaving.

7. It provides actionable insights 

As you’re now aware, the NPS survey is a great first step to capture sentiment, but to make it truly effective, you need a follow-up plan. For instance, if your scores are low, the next step should be to dig deeper. You can send more specific surveys to uncover exactly what’s going wrong. 

Ask the right questions, and you’ll find solutions. So, in addition to asking the standard questions, consider focusing on emotional touchpoints to gauge how customers feel about your brand.

You can also use transactional NPS surveys to assess specific customer interactions, such as:

• Would a customer recommend your company?
• Would they recommend a particular product or service?
• Would they recommend your customer support chat?
• Or any other customer interaction point?

This detailed feedback lets you take targeted actions to improve the customer experience.

8. It provides continuous feedback

NPS surveys are flexible and can be used in various ways. While some companies send them just once or twice a year, more businesses are now opting for smaller, more frequent surveys to track customer sentiment regularly. 

As a result, you’ll get continuous feedback and can make improvements over time, instead of waiting for annual responses.

9. It helps in benchmarking against competitors

One of the key benefits of the net promoter score being a global standard is that it helps you directly compare your score to others in your industry. For example, if your NPS is 63, but the industry average is 65, you know you have room for improvement. On the other hand, if your score is 70, while competitors' scores are in the low 60s, you can confidently say your customers are happy.

A high NPS doesn't mean it's time to relax. It’s an opportunity to gather more feedback. Send out another survey to your promoters and ask how you can improve. This shows customers that you care about their experience even after the sale. It also encourages your promoters to stay loyal and continue advocating for your brand.

10. It helps with employee engagement

Employee engagement refers to how invested and motivated employees are in their work and workplace. According to Gallup’s State of the Global Workplace report, only 23% of employees are engaged, and the lack of engagement costs the global economy US$8.9 trillion, or 9% of the global GDP. 

The report suggests that many employees either feel disconnected from their work or simply do the bare minimum.

An NPS survey can be an excellent tool to gauge employee sentiment. You can use it to learn how your team feels about the organization and what drives their enthusiasm. Plus, an employee net promoter score (eNPS) can help identify what makes employees happy and what areas need improvement. These insights can guide you in making necessary changes to boost employee satisfaction.

However, collecting eNPS data alone won’t solve engagement issues. You need to share the survey results with your team to show them their input matters. This helps employees feel valued and involved in the decision-making process.

Moreover, there’s a direct connection between employee satisfaction and customer loyalty. When your employees are happy and engaged, they’re more likely to provide exceptional service, leading to better customer experiences and higher customer loyalty. 

Combining eNPS with traditional NPS gives you a full view of both your internal and external satisfaction. It allows you to make informed decisions that improve both employee and customer satisfaction, driving overall business growth.

11. It helps you improve your product or service

Attracting and keeping customers means understanding what they like and what needs improvement. NPS feedback provides clear insights into customer opinions, helping businesses refine their products and services.

Reading customer responses highlights strengths and issues that need fixing. Every comment offers a chance to make adjustments that improve the overall experience. Instead of guessing what works, businesses can use direct feedback to create meaningful changes that keep customers satisfied.

Take Complete Advantage of NPS with ClearlyRated

To truly unlock NPS benefits, ask your customers the NPS question and carefully gather their feedback. One of the biggest benefits of NPS is its ability to provide actionable insights that help you refine your business strategies and enhance customer satisfaction.

ClearlyRated is a powerful client feedback and reputation management software that helps you create custom NPS surveys, track key metrics, and send follow-up questions. The platform ensures you stay on top of responses and alerts you when a customer is unhappy. Plus, with features like automated workflows and AI-driven sentiment analysis, you can turn detractors into promoters and improve the customer experience. 

Ready to experience the benefits of NPS firsthand? Start improving your customer experience with ClearlyRated today. Book a free demo now!

FAQs

What is a good NPS score?

A good NPS score typically ranges from 50 to 70. Scores above 70 are considered excellent, while below 0 suggests a need for improvement.

How can I improve my NPS score?

Focus on addressing feedback from detractors and engaging with promoters. Consistently improve customer experiences and track progress over time.

Can small businesses benefit from NPS?

Yes, small businesses can use NPS to understand customer loyalty and identify areas for improvement. It provides valuable insights for growth and retaining customers.

How often should we measure NPS?

You should measure NPS regularly, ideally quarterly or bi-annually. However, more frequent feedback helps track changes in sentiment and adjust strategies faster.

What industries use NPS the most?

Industries like tech, e-commerce, and customer service frequently use NPS. However, it’s applicable to any business seeking to improve customer loyalty and satisfaction.