How To Calculate Your Score
- Ask Just One Simple Question
- The Net Promoter Score (NPS)
- The Link To Long-Term Corporate Growth
- Analyze Your Company's Score
The Link to Long-Term Growth
Researchers and practitioners have grappled with identifying the right loyalty metric that consistently links to a company's bottom line. Based on an independent research project to understand both the micro- and macroeconomics of customer loyalty, Satmetrix and Fred Reichheld, founder of Bain & Company's Loyalty Practice, learned that one question - the Ultimate Question - worked best for most industries.
The Ultimate Question Correlates Most Closely to Customer Behavior
Of the correlations studied across different industries, the Ultimate Question - Would you
recommend this company or product to a friend? - proved to be the top correlate to actual
customer behavior 80% of the time when compared to other loyalty questions (see chart below).
Top Ranking (Recommend) Correlated to Customer Behavior
The Net Promoter Score Correlates to Corporate Growth
Individual customers can't have a Net Promoter Score (NPS); they can only be promoters,
passives, or detractors. But companies can calculate their NPS for particular segments of
customers, for divisions or geographic regions, and for individual branches or stores.
NPS is to customer relationships what a company's net profit is to financial performance.
It's the one number that really matters. Companies that maintain higher % NPS's also
demonstrate higher growth rates, whereas companies that maintain lower % NPS's also
demonstrate lower growth rates (see chart below).
% Net Promoters vs. 5-Year Revenue Growth for US Airline Companies
