Net Promoter Score (NPS) Services

Why is Net Promoter Score important?

Net Promoter is a customer loyalty metric developed by (and a registered trademark of) Fred Reichheld, Bain & Company, and Satmetrix. It was introduced by Reichheld in his 2003 Harvard Business Review article “The One Number You Need to Grow”. The most important proposed benefits of this method derive from simplifying and communicating the objective of creating more “Promoters” and fewer “Detractors” — a concept claimed to be far simpler for employees to understand and act on than more complicated, obscure or hard-to-understand satisfaction metrics or indices. In addition, proponents claim the Net Promoter method can reduce the complexity of implementation and analysis frequently associated with measures of customer satisfaction, providing a stable measure of business performance that can be compared across business units and even across industries, and increasing interpretability of changes in customer satisfaction trends over time.

How is Net Promoter Score applied?

Companies obtain their Net Promoter Score by asking customers a single question on a 0 to 10 rating scale: “How likely is it that you would recommend our company to a friend or colleague?” Based on their responses, customers can be categorized into one of three groups: Promoters (9-10 rating), Passives (7-8 rating), and Detractors (0-6 rating). The percentage of Detractors is then subtracted from the percentage of Promoters to obtain a Net Promoter score. A score of 75% or above is considered quite high.

At some companies like Apple Inc (AAPL), scores from detractors or promoters generate alert emails either alerting management to the promoter or alerting them to the detractor who they are to call back within 24 hours to resolve the issue. Companies are encouraged to follow this question with an open-ended request for elaboration, soliciting the reasons for a customer’s rating of that company or product. These reasons can then be provided to front-line employees and management teams for follow-up action.

How to Calculate Your Score

NPS is based on the fundamental perspective that every company’s customers can be divided into three categories: Promoters, Passives, and Detractors. By asking one simple question — How likely is it that you would recommend [Company X] to a friend or colleague? — you can track these groups and get a clear measure of your company’s performance through its customers’ eyes. Customers respond on a 0-to-10 point rating scale and are categorized as follows:

• 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 Net Promoter Score (NPS), take the percentage of customers who are Promoters and subtract the percentage who are Detractors.

Delivery of NPS and measurement

Satmetrix software-as-a-service solution to automate the process of collection, analysis and distribution of customer feedback. Customer feedback is collected and distributed in real-time to enable employees to improve the customer experience and increase loyalty. Program teams and analysts can easily evaluate Net Promoter Scores, performance gaps and root cause by product line, region, account, contact center or customer segment. Role-based information is integrated into the employees’ workflow, enabling immediate response to customer feedback and effective closed-loop processes.

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