VC & PE Glossary
What Is NPS?
Updated
Definition
NPS — Net Promoter Score — measures customer loyalty by asking how likely users are to recommend a product on a 0–10 scale, then subtracting detractors from promoters.
Useful for: Founders, Investors
NPS (Net Promoter Score) is a customer satisfaction metric based on one question: “How likely are you to recommend this product to a colleague or friend?”
How it works
Respondents rate 0–10. Promoters (9–10) are enthusiastic advocates; passives (7–8) are satisfied but unenthusiastic; detractors (0–6) may churn or damage brand. NPS = % promoters − % detractors. A score of 40 means promoters exceed detractors by forty percentage points.
Companies survey on a schedule — post-onboarding, quarterly, or after support tickets — and segment by persona, plan tier, or tenure. B2B enterprise NPS differs from consumer benchmarks; compare trends within your segment, not arbitrary cross-industry tables.
Follow-up “why” questions turn NPS from a number into actionable product feedback. Segment promoters and detractors by plan tier and tenure so product and success teams know where advocacy is real versus fragile.
Why it matters
- Founders: Rising NPS after releases validates roadmap bets; falling NPS among paying customers warns before revenue churn appears in lagging metrics.
- Investors: NPS supports qualitative diligence on product-market fit but is easy to sample selectively. Pair with retention, expansion, and support ticket themes.
Common mistake
Quoting a one-time NPS from a friendly user batch as company-wide truth. Methodology — who was surveyed, response rate, and timing — matters as much as the score.
Related ideas
See also north star metric, logo retention, customer satisfaction surveys, and cohort retention.
Related terms
- Logo Retention — Logo retention is the share of customer accounts that remain active over a period — the inverse of logo churn — showing whether the business keeps relationships, not just revenue.
- North Star Metric — A north star metric is the single core measure that best captures the value a product delivers to customers — aligning teams on what growth or improvement most drives long-term success.
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Common questions
Short answers for founders, LPs, and operators