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Net Promoter® Score
Measuring Customer Loyalty With a Single Question
What do your customers think about your organization? Are they impressed enough to recommend you to their friends and family?
When an organization provides a great product, gives exceptional service, or demonstrates real integrity, people will often recommend it to others. Clearly, this type of "word of mouth" – whether verbal or through social media – is invaluable.
Unfortunately, it can often be hard to measure positive word of mouth.
This is where the Net Promoter® Score (NPS®) is useful. It's simple and effective, and it helps you to measure how likely your customers are to champion your organization.
We look at the Net Promoter Score in this article.
About the Net Promoter Score
Frederick Reichheld, a partner at Bain & Company, introduced the Net Promoter management tool in his 2003 Harvard Business Review article "The One Number You Need to Grow."
Reichheld and his collaborators spent two years looking at ways to improve the customer survey process. Specifically, they wanted to find a way of measuring customer loyalty, and of linking this to profitability.
To do this, they matched customer survey responses to consumer behaviors such as making repeat purchases and giving referrals. They found that, for most industries, only one question effectively predicted customer loyalty, profitability, and growth.
That question was, "How likely is it that you would recommend our company/product/service to a friend or colleague?"
To calculate the Net Promoter Score, you need to ask customers how likely they are to recommend your product, service, or organization on a scale of 1-10 (with 1 being extremely unlikely and 10 being extremely likely). ...