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Net Promoter Score overview

                        The Ultimate Question

If you Google "Net Promoter Score" you will see that most major companies are now using this metric to measure customer satisfaction.

It starts with the book "The Ultimate Question" by Fred Reichheld, (Amazon link http://www.amazon.com/Ultimate-Question-Revised-Expanded-Customer-Driven/dp/1422173356/ref=pd_sim_b3).

In trying to summarize the book, it says profits fall into two categories, good profits and bad profits. Bad profits come from charges like late fees, additional baggage charges, or when sales reps push overpriced or inappropriate products to trusting customers. Good profits are when a company so delights its customers that they not only willingly come back for more, but tell their friends and colleagues. Good profits are needed for continued growth and have a dramatic impact on long term revenues, read the book to see the many examples and support for this.

In the book, the challenge was being able to tell which type of profits you had as it doesn’t show on your financials. It then goes into some detail to explain ways they tried to measure good versus bad profits and finally settled on this one “Ultimate Question” - How likely is it that you would recommend our company to a friend or colleague? on a scale of 0 to ten, 10 being extremely likely.

Responses fall into 3 categories, 1) Promoters, 2) Passive, 3) Detractors, Promoters answer 9 or 10, Passive are 7 or 8 and Detractors are 6 and under. Then to simplify things they wanted a number they could use to measure and came up with the Net Promoter Score (NPS). NPS is to customer relationships what a company’s net profit is to financial performance.

The Net Promoter Score is the percentage of promoters minus the percentage of Detractors. So if you asked 100 customers the Ultimate Question, 20 answered 6 or less and 30 answered 9 or 10 then your NPS would be 10. It is also simple and easy to measure and compare numbers. NPS can be tracked by customer type, model, even by employee. The average US company has a NPS of less than 10%. Fred Reichheld goes on to show how management compensation tied to NPS can have a major impact on a company.

By adding the Ultimate Question to our surveys (http://lnkd.in/TyujMs) we now have the option to calculate an NPS score for each of your customers and post it into your CRM so your sales team can see who is good for a reference etc. We can also give you your total NPS score based on responses from all your customers. In addition we can monitor this NPS score and alert you when it changes.

See our Dash Board overview here, see here to understand exactly how the score is calculated.

See links to videos from top corporations on NPS here.

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