In an ideal world, every company hopes to build legions of loyal, satisfied customers who will not only provide them with repeat business, but enthusiastically promote their company to friends and family.

Word of mouth and positive customer recommendations have countless benefits for a business, particularly one in the process of establishing itself. They help to widen a business’ customer base, bring in new prospects, and reach demographics that the business might not have thought to target, or might not be targeting with their current marketing strategy.

No doubt you’ve heard the well-worn statistic that 83% of consumers are prepared to trust recommendations from their family and friends when making a purchase decision – making word of mouth the most trusted method of advertising, according to Nielsen – but it rings true. How many times have you acted on a recommendation when deciding where to eat, which new coffee shop to visit, or which plumber to hire – or avoided a business or service based on someone else’s negative experience?

Given the sheer amount of choice that we’re faced with when it comes to buying goods and services, one solid recommendation can make a world of difference.

However, if you’ve been thinking of “likelihood that customers will recommend my business to others” as an elusive quality that can’t be measured directly or influenced, the good news is that it can. There is a metric for measuring this, and it’s called a Net Promoter Score (NPS).

So, what is a Net Promoter Score (NPS) and how is it calculated?