“On a scale of 1-10, how likely is it that you would recommend
to a friend or colleague?”
This one question packs a major research punch.
It is, hands down, the best way to measure customer experience and predict growth.
Introduced in 2003 by Frederick F. Reichheld and Bain and Company Consulting, the Net Promoter Score or NPS is the one number you need to know to grow your company. You get the number by asking this question of your customers and subtracting the percentage of detractors from the percentage of promoters.
Reichheld actually got the idea to develop the question and scoring system from a speech the CEO of Enterprise Rent-A-Car gave at a conference where the topic was how to develop loyalty.
Andy Taylor’s speech had many a high-powered CEO perched on the edge of their seats, listening with rapt attention. He was explaining that Enterprise surveyed their customers every month with just two simple questions (eschewing the complexity of most customer satisfaction surveys) and the results were astounding.
All they asked their customers was how their rental experience was and would they rent from them again. Each individual location was able to receive the results and act accordingly within days, not months. That kind of real-time feedback is invaluable to a company’s growth.
A lightbulb went off for Reichheld and he set off on a 2-year research project to determine if this simple survey method would work in other industries, what the perfect questions were, and how to score the responses.
As he saw it, one of the biggest problems with most customer satisfaction surveys is that they are long and complicated. They result in low response rates and information that’s hard to act on for two reasons—it’s not easily understood by the sales force ranks and it takes too long to compile. Once it reaches the people who need to see it, it’s outdated.
After testing several questions in several industries, Reichheld came up with this one simple question and scoring system that determines customer loyalty and company growth across industries.
Consider this: When someone recommends your product or service it says much more than “I got a good deal” or “I think this is a worthy product.” They are actually putting their reputation on the line.
The NPS is now known as a key measure of the overall perception of your brand, and by extension, your customer’s loyalty and commitment level.
The size of your company has no relation to your net promoter score or whether or not you should calculate it. It’s possible to determine it with a list of 1,000 (responsive) customers or 100,000.
Everyone in business, from the C-suite to the reception desk, can easily understand what the score means and how to proceed accordingly, which makes it all the more valuable. And since it costs approximately 5x more to acquire a new customer than to retain a current one, knowing your NPS can also save you money.
Use this one question and survey your customer list if you are aiming to garner world-class loyalty and the growth that comes with it.
Aim for an NPS in the range of 75-80%. (This is where companies like eBay, Amazon, and USAA typically rank.) If you don’t get near that score, you’ll understand why growth is slow and you can work to fix it quickly.
Remember: Your customers are an extension of your salesforce. They are your best marketing department. Make sure they are a “10.” It’s crucial to your growth.
Always behind you 1,000%-