How to keep ‘score’ in business

How to keep ‘score’ in businessBusiness is not youth sports where everyone gets a trophy just for showing up. Business is about winners and losers and the one clear way to know if you are the winner is to keep score. And guess what? The long time winners have always kept score using a methodology called Net Promoter Score™.

What is Net Promoter Score™?

Net Promoter Score™ or NPS is a loyalty metric created 10 years ago by Fred Reichhold of Satmetrix that can be applied across multiple industries regardless of the size or location of your business. That’s one of the things that are so appealing about it.

Well-known companies that are currently keeping ‘score’ through a Net Promoter Score™ program are Walgreen’s, eBay, Amazon, USAA and Southwest Airlines. Typically organizations that use this metric and have high Net Promoter Scores™ are also considered Customer Experience Leaders.

NPS hinges off of the following question that is found on most surveys.

“How likely are you to recommend us to a friend, family member, or a colleague?”

This question is referred to as the Ultimate Question, because it is from the responses to this question that you can calculate your Net Promoter Score™.

How do you calculate the Score?

“How likely are you to recommend us to a friend, family member, or a colleague?”

P – D = NPS

% Of Promoters – % of Detractors = Net Promoter Score™

Based on the responses to the Recommend Question, you can also segment your customers into 3 unique groups; Promoters, Passives or Detractors.

Promoters are customers who are so enthusiastic about a firm or brand that they not only increase their own purchases, but also refer their colleagues or friends.

Passives are satisfied but unenthusiastic customers who can be easily wooed by the competition (next shiny object)

Detractors are customers who feel so badly treated that they cut back on purchases, switch to the competition, and warn others to stay away from the company.

How to leverage your Net Promoter Score™

The follow up question to Likely to Recommend is to ask customers the primary reason for their response. Through these open text responses, you will get a clear understanding of what your Promoters like and what your Detractors want you to stop doing.

Your next step is to create an action plan that prioritizes both the good (create best practices) and bad (make improvements) areas that you have uncovered by asking your customer why or why not they would recommend you.

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