Assessment is a vital step in any businesses’ strategy. However, many of them do not understand how to start. Well, one of the most commonly used methods is: the net promoter score® (NPS®), a customer satisfaction survey company. Using their services can provide you with the information necessary to succeed and build a thriving business.
NPS is a relatively basic program, and yet, it has the potential to be extremely powerful. Developed by Fred Reichheld, NPS is a management consultant. Its purpose is to evaluate customer satisfaction with a very basic question: How likely are you to recommend product X to a friend or family member?
The consumer is supposed to answer this question on a scale of 1 to 10. 0 to 6 signifies a detractor, 7 to 8 represents a passive customer, and 9 to 10 symbolizes a promoter.
To further explain, please take a look at the following: “The Net Promoter Score is calculated as the difference between the percentage of Promoters and Detractors. The NPS is not expressed as a percentage but as an absolute number lying between -100 and +100.
If you have for example 25% Promoters, 55% Passives and 20% Detractors, the NPS will be +5. A positive NPS (>0) is generally considered as good.”
Several large companies use NPS to evaluate their customer’s satisfaction. An average company usually scores around a +10. While some of the largest companies earn a score that ranges between +50 and +80.
What makes NPS so well-liked is its impartiality. However, NPS does not lack its critics. But not many programs are perfect, right?
NPS suffers from several limitations. For example, even a non-customer can be a detractor. Another problem NPS suffers from is the lack of distinction between a 0 and 6. To NPS, they are both considered a detractor. However, many businesses find this to not be true. They believes some 5’s and 6’s may fall into the passive category.
Despite its critics, NPS still remains one of the best ways to understand a customer’s feedback. Their simple customer satisfaction surveys guarantee to bring about the best results. If you are a new business, the net promoter score is a great way to evaluate and asses your customers. A step many businesses fail to accomplish in this day and age.
Although NPS can provide companies with the data they need to succeed, it is important to remember simply measuring your NPS will not ultimately lead to success. A company must have the necessary determination in order to drive improvements in the overall success of a business.
Research has shown NPS is vital in understanding your customers, their satisfaction, and your market. When using the net promoter score, you open a door that allows you to enter into a world of business intelligence. So don’t waste anymore time! Get out now, and begin to connect with your customers. And before you know it, you will have built long-lasting relationships, referrals, and a successful business.