Net Promoter question
Net Promoter Score
The Net Promoter Score is a measure of how willing someone is to refer our product to a friend.
The primary reasons that NPS has become so popular are that it is:
- Simple to understand and calculate
- Not a complex combination of multiple metrics with different weightings;
- A leading indicator
- It predicts future outcomes; and
- Correlated to business growth All these points are important but the last is critical.
NPS is one of very few (if any) measures that have been shown to correlate to business growth. Put simply if you increase NPS you will more than likely adoption.
- “The One Number You Need to Grow, Harvard Business Review 2003,Frederick Reichheld
- “The Power Behind a Single Number”, Satmetrix
- “Advocacy Drives Growth”, London School Economics, December 2005
NPS vs Satisfaction
There is nothing wrong with Customer Satisfaction as a measure. It’s just that the research that was done into Net Promoter Score showed that Customer Satisfaction is often not the best indication of customer loyalty. The trouble is that plenty of satisfied customers defect from businesses every day. So, if customer loyalty is the goal, Customer Satisfaction just isn’t that useful. On the other hand, the goal of the NPS research was to find a measure that captured future customer loyalty and therefore profitability.
- "On a scale 0-10, how likely is it that you would recommend OpenOffice to a friend or colleague?"