Monday, July 24, 2006

The Net Promoter Score


The Net Promoter Score is an incredibly simple yet potentially powerful measure of customer loyalty. Credited with its invention is Fred Reichheld, consultant with Bain & Co., who recognized the need to unravel the knots we usually get ourselves into with lengthy and complex satisfaction surveys. Remarkably, he boiled it all down to a single question, once answered, that lets a company know how it is performing, how it compares to competitors, and even how it stacks up to companies in other industries.

The Question

On a scale of 1-10 (10=Extremely likely, 1=Not at all likely) how likely is it that you would recommend our company to a friend or colleague?

The Calculation

The Net Promoter Score is determined by subtracting detractors (those who gave a 0 to 6) from promoters (those who gave a 9 or 10).

The Net Promoter Score is easy to capture, easy to understand, and easy to share with your organization. But don’t expect or demand that your company score be a 10. Few score this high and some of the companies know for great service score in the 50s. Harley Davidson is a standout at 81%, while FedEx, which thrives on good service, scores 56%.

We expect many companies to benchmark their service using the net promoter score in the years ahead.

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