The economics of Net Promoter® spring from differences in the behavior of Promoters, Passives, and Detractors. Use your focus on raising your Net Promoter Score® to drive improved performance for your business, whether you are focused on increased profits or faster growth. Higher NPS improves business performance in a number of ways.

Count the Benefits

Improving the customer experience, and therefore your Net Promoter Score, results in a number of business benefits, higher margins (Promoters are less price-sensitive, while Detractors are more so), higher annual spend (those same Promoters tend to buy more), greater cost efficiencies, higher retention rate, and more positive word of mouth – put them together, and your bottom line is looking good.

Higher Margins

Promoters are usually less price-sensitive than other customers because they believe they’re getting good value overall from your company. The opposite is true for Detractors, who are more price-sensitive.

Higher Annual Spend

Promoters buy more, more often, than Detractors do. They tend to consolidate more category purchases with their favorite supplier. Promoters’ interest in new product offerings and brand extensions also exceeds that of Detractors or Passives.

Greater Cost Efficiencies

Detractors complain more frequently and consume more service resources. In contrast, Promoters reduce customer acquisition costs by staying longer and helping to generate referrals.

Higher Retention Rate

Detractors generally defect at higher rates than Promoters, which means that they have shorter and less profitable relationships with your company. Rescue those Detractors—turn them into Promoters—and experience higher margins.

Greater Word of Mouth

What proportion of new customers selected your firm because of reputation or referral? The lifetime value of those new customers, including any savings in sales or marketing expense, comes from Promoters, who account for most referrals. On the other hand, Detractors are responsible for of negative word of mouth, so you can attribute the cost of this drag on growth to them.

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