Net Promoter Score and the Ultimate Question

Jesse Hopps

If you are wondering about the fate of your customers and the long term growth potential of your business, look no further…all you have to do is ask!

According to Fred Reichheld, author of The Ultimate Question: Driving Good Profits and True Growth, Net Promoter Score (NPS) is a metric that helps businesses measure and manage the correlation between customer loyalty and profitable growth. And the best part - this metric can be calculated by asking your customers one question, “on a scale of 1 to 10, how likely is it you would recommend us to a friend?"

Reichheld contends that customers who enjoy doing business with you are more likely to refer you to a friend or colleague. Although this concept shouldn’t shock you, nor should it come as a surprise, asking this question will allow you to systematically categorize your customers into one of the three groups depending on their answer: Promoters, Detractors or Passively Satisfied.

The NPS metric has been a great conversation piece and topic of debate for both marketers and market researchers alike. However, organizations are quickly discovering that NPS is much more than a metric; it is a set of disciplines and tools that can actually help you manage your business better.

According to Reichheld, a successful Net Promoter program includes 5 elements:

1)   Metrics proven to link to growth;

2)   Leadership practices that instill customer focus, passion, and values;

3)   Organizational strategies to ensure adoption;

4)   Integration with core business processes, and

5)   Operational systems to support the initiative and growth.

The implications of the Net Promoter Score are far reaching. Many Fortune 500 companies have already adopted these principals and have put a major focus on developing a more Customer-Centric culture.

For more information on how to calculate your Net Promoter Score visit us at Demand Metric.