This is the one question that every business owner should be asking if they want to grow their business, BUT how do you know?.
That’s the objective of NPS (Net Promotor Score). It gauges how consistently a firm turns customers into advocates, by tracking and analyzing three segments: promoters, customers who are so pleased with their experience that they recommend your brand to others; passives, customers who feel they got what they paid for but nothing more and who are not loyal assets with lasting value; and detractors, customers who are disappointed with their experience and harm the firm’s growth and reputation. Promoters give a score of 9 or 10, passives a 7 or 8, and detractors a 6 or less.
While that arithmetic might seem simplistic, the full system is intended to inspire teams to deliver experiences that are not merely satisfactory but remarkable. When customers feel cared for, they come back for more and bring their friends.
The power of customer advocacy is evidenced by the remarkable success of NPS leaders. Consider the 11 public firms highlighted in Reichheld’s most recent book, The Ultimate Question 2.0. Over the past decade their median total shareholder return was five times the U.S. median (for public companies with revenues of more than $500 million as of 2010). Those results motivated more firms to track their Net Promoter Scores—and some to report them to investors.
The takeaway is to measure your NET promotor score as often as you can to see if you really do improve your customers lives. Your business life might depends on it!!!
Stanley Labovitz, J.D., CEO
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Author: Back From The Brink