Using the Net Promoter® Score (NPS)
What is NPS?
NPS, or “Net Promoter® Score,” is a measurement of customer loyalty and willingness to recommend your company or product to others. NPS is a registered trademark of Fred Reichheld, Bain & Company, and Satmetrix. It was introduced by Reichheld in his 2003 Harvard Business Review article “One Number You Need to Grow”. You can download Satmetrix’s study on NPS here. According to experts on the subject, NPS has been adopted by many highly successful companies, including Philips, GE, Apple, American Express, and Intuit, among others.
How to calculate your NPS
NPS is a range of -100 to 100. −100 means none of your customers would recommend your product or service, and +100 means all your customers would recommend you. In order to determine your NPS you need to poll your customers and ask them on a scale of 0 to 10 how likely they are to recommend you to others. Any customer with a score of a five or less is considered a “detractor.” And any score of 9 or 10 is considered a “promoter.” The rest are considered “neutral.”
- Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others, fueling growth.
- Passives (score 7-8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
- Detractors (score 0-6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.
To calculate your company’s NPS, take the percentage of customers who are Promoters and subtract the percentage who are Detractors. A score of 0 means you’re pretty much average. A score of 50 is considered very good. And a score of -50 would be considered very bad.
How To Utilize NPS
NPS can be used via a gamification process to motivate your service team to provide remarkable service. Reward and celebrate your best employees!
It’s a good idea to follow up the “ultimate question” of “Would you recommend us?” with an opportunity for the customer to explain their reason for giving you a particular score. These reasons can then be discussed with management teams and front-line employees for the purpose of training and fine tuning your service strategies.
ReviewBuzz provides both a survey system to determine your NPS (and other customer satisfaction metrics) and a gamification system to motivate your service team, for a very reasonable price.