The Net Promoter Score
Leading Growth Indicator
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Extensive research has shown that your Net Promoter Score®, or NPS®, acts as a leading indicator of growth. If your organization’s NPS is higher than those of your competitors, you will likely outperform the market, and managing your organization to improve NPS will also improve your business performance. Whether you are aiming for faster growth or increased profits, use NPS as the foundation of a measurement framework that is tightly tied to the customer journey.
The NPS Calculation
Calculate your Net Promoter Scores using the answer to a single question, using a 0-10 scale: How likely is it that you would recommend [brand] to a friend or colleague? This is called the Net Promoter Score question or the recommend question.
Respondents are grouped 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.
Subtracting the percentage of Detractors from the percentage of Promoters yields the Net Promoter Score, which can range from a low of -100 (if every customer is aDetractor) to a high of 100 (if every customer is a Promoter).
Driving action begins with delivering actionable customer insights to people throughout your organization. In the Satmetrix-developed NPS2 methodology, the improved version of the Net Promoter approach, guides you to focus on democratizing your Net Promoter data, to ensure that employees at all levels feel empowered to act. Consider the roles and goals of employees who consume the information related to NPS. Broadly, they’ll fall into one of three categories: frontline, management, and executive. At every level, employees need to know what customers have to say about your business.
Closing the Loop
Net Promoter methodology has always taught that customer feedback should be the start of a “closed loop:” Reach out to customers who take the time to share their thoughts with you and directly address their concerns or ideas. NPS2 takes the closed loop concept to the next level with “smart loops” for the frontline, for management, and for executives. In the smart loop framework, we encourage three types of closed loops support your customer experience management. Frontline closed loops, in which frontline employees promptly call customers after they have given feedback, have always been a great way to prevent Detractors from taking their business elsewhere. They become smart loops when you also use them as a chance to gather insight on root causes. These one-to-one interactions are powerful relationship builders too. Two additional smart loops build on the frontline process. A one-to-many closed loop, for action planning, engages management in overall improvements to customer experiences, while a resource allocation closed loop guides executives to engage in organization-wide prioritization.
Your Net Promoter program gains power when it becomes integrated into the business as a whole. Organizational adoption happens when you give leaders in sales, marketing, product, service, and indeed every area of the business, the information they need to keep their operations customer focused. You’ll also want to ensure that customer data is built into the operational rhythms of the business in order to drive continuous improvement and innovation.