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GLOSSARY ยท AGENCY

Net Promoter Score (NPS)

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Quick Definition

A simple client satisfaction metric based on one question: 'How likely are you to recommend us?' โ€” scored from -100 to +100, with higher being better.

What Is Net Promoter Score (NPS)?

Net Promoter Score measures client loyalty with a single question: "On a scale of 0-10, how likely are you to recommend [your agency] to a colleague?" Respondents fall into three categories: Promoters (9-10) who actively recommend you, Passives (7-8) who are satisfied but not enthusiastic, and Detractors (0-6) who are unhappy and could damage your reputation.

The NPS formula: % of Promoters minus % of Detractors. If 60% of your clients are Promoters, 25% are Passives, and 15% are Detractors, your NPS is 60 - 15 = +45. Scores range from -100 (everyone's a Detractor) to +100 (everyone's a Promoter). For agencies, a score above +30 is good, above +50 is excellent, and above +70 is world-class.

The real value of NPS isn't the number itself โ€” it's the follow-up. After the score, ask one open-ended question: "What's the main reason for your score?" That qualitative feedback tells you exactly what to fix (for Detractors), what to maintain (for Passives), and what to double down on (for Promoters). The agencies that get the most value from NPS are the ones that actually call every Detractor within 48 hours to understand and address the issue.

Why It Matters for Agencies

In the agency world, referrals are the highest-quality and lowest-cost source of new business. NPS directly predicts referral behavior โ€” Promoters send referrals, Detractors actively warn people away. A 10-point increase in NPS typically correlates with a 5-10% increase in referral-driven revenue for agencies.

NPS also serves as an early warning system for churn. A client who was a Promoter last quarter and is now a Passive is at risk. A new Detractor is a fire alarm โ€” that relationship needs intervention immediately. Tracking NPS over time, per client, gives you a leading indicator of retention problems before clients actually leave.

Example

A 20-client agency sends a quarterly NPS survey. Results: 11 Promoters (55%), 6 Passives (30%), 3 Detractors (15%). NPS = 55 - 15 = +40. Good, but the three Detractors are concerning. The account director calls each within 48 hours. Client A is frustrated with project delays โ€” the agency assigns a dedicated PM and the client becomes a Passive next quarter. Client B feels they're not getting strategic value โ€” the agency adds a quarterly strategy session. Client C has been unhappy for months โ€” the agency negotiates a graceful exit before the relationship gets worse. By Q3, NPS rises to +55.

Key Takeaways

  • โœ… NPS = % Promoters (9-10) minus % Detractors (0-6) on a 0-10 recommendation scale
  • โœ… Good agency NPS: +30. Excellent: +50. World-class: +70+.
  • โœ… The follow-up question and action matter more than the score itself
  • โœ… Track NPS quarterly per client as a leading indicator of retention and referral potential
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How Holdings Helps

Happy clients stay longer and refer more business. Holdings helps agencies run lean, get paid faster, and deliver more value โ€” which all show up in your NPS.

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