In today’s rough and tumble market everyone is looking for an edge in hopes of accomplishing what many are currently failing at….making a decent profit. As a result hoards of small business owners are turning to a new customer satisfaction system that may just lead to the dawning of a new era. I’m talking about NPS (Net Promoter Score) and believe it or not many companies say it’s changing they way they respond to customers by giving them a direct hotline to what they are most excited about.
Simply put NPS is a series of questions each of which are answered on a scale of 1-10 (the higher the number the stronger the customer feels about the question) and then tallied up to produce an NPS SCORE. A score of 50+ means the company in question is a mega-star in terms of the love it receives from consumers. Fred Reichheld spent over ten years trying to come up with an easy was to judge customer satisfaction and the end result is quickly becoming a standard for such companies as Whirlpool and Intel. The ultimate goal of the NPS is to figure out the percentage of customers who are not only satisfied with a product but actively promote it among friends and family thus increasing the chances they will influence others to purchase it as well.
The key to figuring out your NPS is one simple question: On a scale of 1-10 how likely are you to recommend us to your family and friends? Answers are then split into three categories: Promoters, Passives, and Detractors. The score equals the percent of Promoters less the percent of Detractors. NPS may be relatively easy to calculate, but what it leads to is a very complex understanding of why customers leave feeling the way they do. What happens next is a better relationship with the consumer built around finding out just why they answered the way they did. If a negative response was given, questions such as “What could we do better?” or “What about the product left you wanting more?” are then asked. A positive response helps a company know just what they are doing well with a follow-up such as “What did you like most about your buying experience?”
The idea that NPS is the best way to read what customers are thinking is becoming such a force that many who use it have started sending out their NPS score to employees so that they can make changes in they way they are handling day to day operations. The way one small business owner puts it” Everyone just got it. Here’s a single number that can go up or down, depending on interactions with customers. Sure, it takes some time,” allows Byers. “But the benefits so outweigh the time spent.”