Net Promoter Score - A metric to measure customer’s satisfaction
Hello, this is Cynthia from Think-team!
Have you ever heard about Net Promoter Score/NPS? For you who are interested in market research or a market strategist, I am sure that the term is familiar to you.
Looking at the trend of the usage of NPS, the research using this formula gradually increased from the early 2000s. In fact, this metric was initially created by Fred Reichheld in 2003. NPS is mainly used by market researchers and practitioners to provide an overview of the empirically established relationships between companies and customers. According to one of the creator’s books, many innovative companies like Facebook, Apple, Zappo.com, Philips, and so forth adopted NPS to track the loyalty, engagement, and satisfaction of their customers. The goal of using NPS like the goal of other business companies is to treat the customers so they can be loyal promoters. Nowadays, the usage of NPS is not only limited to customers but also employees and in many sectors.
Speaking of the metric, before you obtain the score, you have to recognise the type of customers or shareholders that you want to get satisfactory information from. There are three types of customers under NPS: detractors, passives, and promoters. Promoters refer to loyal enthusiasts that are driven by growth. This type of customer will definitely positively talk about your brand to others! The second type, passives are the type of customers who are satisfied but unenthusiastic customers who are vulnerable to competitive offerings. If there is an inconvenient situation, this kind of customer will get easily became detractors. The third type of customer is detractors. Such customers are unhappy customers who can damage your brand and impede growth through negative word-of-mouth. I believe this kind of customers should be treated urgently to improve their satisfaction. I think this involves careful discussion for solution provision.
So, the satisfactory survey of NPS uses a scale from 0 to 10 which every type of customer is classified according to the three customer categories. To get the score, here is the formula below. The score ranges from -100 until +100. If you get a minus score, it means you have more detractors than promoters and vice versa. However, when you obtain a score of zero, it means either you only get the passive customers or the number of detractors and promoters are equal.
Like many other business companies, su-re.co aims to provide good environment for all giftmakers to learn, work, and grow together in achieving our vision, to be the giftmaker to the earth (read more about the evaluation here: Reflection of 2020 - The significance of a teamwork!). To maintain that, we usually conduct a gift-maker evaluation monthly to capture which part that we as a company need to improve internally using NPS.
Hope this information is useful. See you on the next blog! 😊
- Reichheld, F., 2011, The Ultimate Question 2.0 (Revised and Expanded Edition)