Understanding NPS for Product Managers
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What is NPS?

Net Promoter Score (NPS) is a customer satisfaction metric that gauges the likelihood of customers recommending your product to others. It's calculated based on a simple question: "On a scale of 0 (not at all likely) to 10 (extremely likely), how likely are you to recommend our product/service to a friend or colleague?"
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Based on their answers, customers fall into three categories:

• Promoters (9-10): These are your loyal enthusiasts, passionate about your product and actively recommending it.
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• Passives (7-8): These are satisfied but neutral customers, unlikely to actively promote or criticize your product.
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• Detractors (0-6): These are unhappy customers who might spread negative word-of-mouth.
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Your NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters. For example, if 60% are Promoters, 30% Passives, and 10% Detractors, your NPS would be 60 - 10 = 50.
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Why is NPS Important for Product Managers?
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NPS provides a clear, measurable way to understand customer sentiment and loyalty. This valuable information helps product managers:

• Prioritize product improvements: Focus on addressing issues identified by Detractors and Passives, while capitalizing on the strengths appreciated by Promoters.
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• Identify areas for improvement: Understand which features or aspects of the product resonate most with users and which need further development.
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• Target loyal advocates: Identify Promoters and focus on engaging them with exclusive offers or opportunities to further strengthen their loyalty.
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• Track product development impact: Monitor changes in NPS over time to see how product improvements are received by customers and adjust strategies accordingly.

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When to use NPS in Product Management?
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NPS is valuable throughout the product lifecycle:
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• Ideation and development: Gather initial feedback and validate product ideas against customer needs.
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• Launch and post-launch: Continuously monitor satisfaction and identify areas for improvement.
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• Long-term product growth: Track how ongoing development efforts impact customer perception and loyalty.
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By understanding and utilizing NPS effectively, product managers can gain crucial insights to drive customer-centric product development and achieve sustainable growth.

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