Net Promoter Score

 

Your Net Promoter Score (NPS) is a measure of customer experience and a predictor of organic business growth.

Traditional business lore assumes that customers expressing satisfaction with a company’s products or services are those who will also be willing to repurchase or recommend those same products or services to a friend. In reality, studies have indicated that these “satisfied” customers are just as likely to purchase from a competitor the next day.

According to Fred Reicheld, a Bain consultant, the better predictor of repurchase or referral is how the client responds to one simple question: “On a scale of zero to ten, how likely are you to recommend us to a friend or colleague.” The response is predictive of both re-purchase and referral.

The Net Promoter Score is calculated by surveying a group of clients whose responses are then “bucketed” into one of three categories. Those scoring a score of nine or ten are promoters; passives will score seven or eight; and, detractors are those scoring six or below. To determine the overall score, the percentage of detractors is subtracted from the percentage of promoters.

The score could be as low at -100 (if everyone was a detractor) or as high as +100 (all clients are promoters). Any NPS over zero is considered good; an NPS of +50 is excellent. Further research by Reicheld and team discovered that the average NPS score is in the ten to fifteen percent (10-15%) range.

Straightforward and easily understood by everyone from the corner office to the front line, NPS provides a touchstone for those committed to organic growth.

Action: So, what is your score?

Learn More: Contact Kevin V. McConnaghy, Director of Strategy & Growth Services (SGS). Call 919-600-6097 or email kmcconnaghy@sbtdc.org.

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