Samuel Scott wrote an article for The Drum titled Is NPS truly ‘the growth marketer’s secret weapon’ or more ‘snake oil and fake science’? NPS stands for Net Promoter Score.
« In December 2003, Bain & Company consultant Fred Reichheld wrote a Harvard Business Review article that introduced NPS to the world as “the one number you need to grow”. »
« For NPS, companies ask customers – typically over automated emails but also through methods such as personal phone calls – to rate on a scale of 0-10 the likelihood that they would recommend the business to others… “The percentage of customers who were enthusiastic enough to refer a friend or colleague – perhaps the strongest sign of customer loyalty – correlated directly with differences in growth rates among competitors,” Reichheld wrote.»
« Those who answer nine or ten are ‘promoters’. Seven or eight are ‘passives’. All others below are ‘detractors’. NPS is calculated by subtracting the percentage of detractors from that of promoters, resulting in a score between -100 and 100. Passives are ignored. »
« Tina Dobie, chief customer officer at the WordPress hosting platform WP Engine, thinks NPS should be used to measure long-term relationships and short-term transactions. The company also has a senior team member follow-up with detractors to see what might help. “NPS has no value unless you do something with it,” she said. “But if you do, it’s a gift. Hearing the voice of your customer and having the customer feel like he or she has been heard is vital.” »
« “It’s only by closing the loop – going back to the customer who has given the negative feedback and rectifying their issue – that it can actually act as a positive driver to improve the score,” Lindsay Willott, chief executive of the business rating platform Customer Thermometer, said. “In fact, it is often detrimental to the customer experience if a customer takes the time to complete an NPS survey and the company who has sent it doesn’t bother to respond.” »
« Indeed, NPS can be an example of businesses preferring to gauge what is cheap and easy to measure rather than what is actually important. »
« As with most things in marketing and communications, there is the thesis, antithesis and synthesis. NPS is likely neither as wonderful as proponents claim nor as useless as detractors state. »
Articles of Interest 