Net Promoter Score – Hype or Hero?
NPS can drive or detract from your business, depending on how you use it.
What if you could get a measure of your customer retention, share of wallet, customer sentiment and likelihood of referral all by asking one simple question? It turns out, you can – with some caveats.
If you’re like me, you might remember back in school, in the middle of class, a tap on the shoulder followed by a crumpled, sweaty little note pushed into your hand. You opened it and there, scribbled in pencil, you read something like “Do you like Stephanie?” followed by two boxes. “Check here if yes” and “Check here if no.”
What made perfect sense intuitively in those early days of childhood data collection still makes sense today. Simple, direct and effective is best. And so, the Net Promoter Score was born.
What is NPS?
NPS asks, “How likely are you to recommend our business?” You can’t get much more direct than that. Collect answers on a 1-10 scale, subtract the percentage of low scores (0-6) from the percentage of high scores (9-10) and you get your NPS. Bing, bang, boom.
We call the customers who give high scores, Promoters (we want them), and the customers who give low scores, Detractors (we don’t want them). I’m being a little facetious. Detractors can actually teach us as much, or more, about our business as promoters, if we listen effectively. But I’m getting ahead of myself.
The Changing Face of Business
The NPS is, in a lot of ways, a sign of the latest evolution in consumer behavior. Businesses are no longer valued merely on price and quality of products and services. Rather, we look to the market for what businesses allow us to do. How can they make us feel. Like it or not, today, we’re all living in an “experience economy.”
For businesses, that means learning to differentiate ourselves through powerful experiences. It means cultivating the ability to create lasting memories for our customers. It ups the bar for what is takes to be successful in a digital economy driven by online reviews, referrals, social sharing and consumer chatter.
NPS is a phenomenon that has transformed the business community and has been almost universally adopted with more than two thirds of Fortune 1000 companies using it to assess customer experience and predict business growth. Like Peter Drucker said, "If you can't measure it, you can't improve it." We help businesses use NPS to drive more value for customers with the most powerful kind of data - Direct, simple and effective.