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Net Promoter Score Defined

Every business owner wants to know what’s going on in their customers’ minds. Are they happy? Are they loyal? Would they recommend us? Deploying a customer satisfaction survey and calculating your Net Promoter Score can answer all of these questions and provide the invaluable insight you are looking for.

The Net Promoter Score approach was developed by Fred Reichheld and Bain & Company after conventional customer satisfaction surveys proved too time intensive, hard to calculate, and hard to analyze. Most importantly, conventional customer satisfaction survey results don’t always correlate with customer behavior.

Reichheld determined however, that there is one ultimate question that works for a variety of industries and most accurately reflects a customer’s overall happiness.

What is the likelihood that you would recommend Company A to a friend or colleague?

Reichheld and his team concluded that high scores on this question (9 or 10 – the respondent would absolutely recommend the company) represented a loyal customer who would keep buying and referring others. According to Bain and Company, in 11 of the 14 industry case studies, no other question was as powerful in predicting behavior.

The answers a customer provides are classified as follows:

  • 0–6 = Detractors—unhappy customers who can hurt your brand through negative word-of-mouth
  • 7–8 = Passives—satisfied but indifferent customers who could be swayed by the competition
  • 9–10 = Promoters—loyal customers who will keep buying and referring others

So, is using NPS beneficial for you? If you’re looking for a simple, quantifiable, standardized and benchmarkable customer satisfaction survey, then NPS is a great option. Highly regarded by large national brands like Apple and American Express, NPS gives any company a wonderful gauge for their business and industry.