Do you have Promoters?

Take your existing and prospective customers and ask them if they are willing to recommend your products or services to a friend or colleague. This one question will allow you to calculate your Net Promoter Score (NPS).

The NPS is a customer loyalty metric developed in 2003 by Fred Reichheld. Today, NPS is utilized by numerous large corporations to gauge the success of their customer-centric initiatives that contribute growth to their business. The basic concept is to create more “Promoters” and fewer “Detractors” of your business. The NPS is simple and straight forward, thus making it far easier for a business to understand and implement changes than any of the other business metrics that are being utilized today.

The question, “How likely is it that you would recommend our company to a friend or colleague?” is answered by the customer on a 0-10 rating scale. And based on their responses, the customers are then categorized into three groups: Promoters (9-10), Passives (7-8), and Detractors (0-6). The final step is to subtract the percentage of Detractors from the Promoters, which yields your NPS. When conducting the survey, the customers are encouraged to provide an explanation for their rating. These can then be utilized by your business to develop a plan to improve any existing weaknesses.

An NPS of 75% is quite high, most businesses will be in the region of 20-40%. If you want to improve your NPS, evaluate the Detractor’s reasons for their rating and categorize those into projects that you can address. Chances are that the reasons can be grouped into themes, making it easier for you to develop and implement improvements.