Net Promoter Score Arrives at Feedb
We are happy to report that the Net Promoter Score system has been now implemented inside Feedb to make it easier for you to measure and track customer satisfaction and loyalty down to a proven number. If you have never heard of NPS before you may be a little confused by now… no worries, it is a very simple and effective concept you will grasp once you go over the questions and answers below.
What is Net Promoter Score?
Net Promoter or Net Promoter Score (NPS) is a management tool that can be used to gauge the loyalty of a firm’s customer relationships. It serves as an alternative to traditional customer satisfaction research and claims to be correlated with revenue growth. NPS has been widely adopted with more than two-thirds of Fortune 1000 companies using the metric. (source: Wikipedia)
Where does it come from?
Net Promoter Score is a customer loyalty metric developed by (and a registered trademark of) Fred Reichheld, Bain & Company, and Satmetrix Systems. It was introduced by Reichheld in his 2003 Harvard Business Review article “One Number You Need to Grow”. NPS can be as low as −100 (everybody is a detractor) or as high as +100 (everybody is a promoter). An NPS that is positive (i.e., higher than zero) is felt to be good, and an NPS of +50 is excellent. (source: Wikipedia)
How is the Net Promoter Score calculated?
The Net Promoter Score is calculated based on responses to a single question: How likely is it that you would recommend our company/product/service to a friend or colleague? The scoring for this answer is most often based on a 0 to 10 scale.
Those who respond with a score of 9 to 10 are called Promoters and are considered likely to exhibit value-creating behaviors, such as buying more, remaining customers for longer, and making more positive referrals to other potential customers. Those who respond with a score of 0 to 6 are labeled Detractors, and they are believed to be less likely to exhibit the value-creating behaviors. Responses of 7 and 8 are labeled Passives, and their behavior falls in the middle of Promoters and Detractors.:51 The Net Promoter Score is calculated by subtracting the percentage of customers who are Detractors from the percentage of customers who are Promoters. For purposes of calculating a Net Promoter Score, Passives count towards the total number of respondents, thus decreasing the percentage of detractors and promoters and pushing the net score towards 0.
Companies are encouraged to follow the likelihood to recommend question with an open-ended request for elaboration, soliciting the reasons for a customer’s rating of that company or product. These reasons can then be provided to front-line employees and management teams for follow-up action. Local office branch managers at Charles Schwab Corporation, for example, call back customers to engage them in a discussion about the feedback they provided through the NPS survey process, solve problems, and learn more so they can coach account representatives. (source: Wikipedia)
You can learn more about NPS at Wikipedia.
Since we have built the whole NPS process into Feedb there is not much you need to do to start using it other than request feedback thru Feedb. The rating uses now a 0 to 10 scale that customers see and then it is converted to a 1 to 5 scale in the Feedb microsite and the testimonial widget.