How to Boost Your Business with Net Promoter Score®

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Net Promoter Score® (NPS) is the most trusted metric for measuring customer satisfaction. xAmplifier measures NPS® on all of our scored surveys so you can know your business’s level of customer satisfaction, both company-wide and at each of your locations.

What is NPS®? Developed and trademarked by Fred Reichheld, Bain & Company, and Satmetrix, NPS® begins with a simple question to your customer: How likely is it that you would recommend (your company) to a friend? The question is answered on a 0-10 scale which divides your customers three categories

  • Promoters (9-10) who will remain loyal customers as well as referring you to friends
  • Passives (7-8) who are satisfied but unlikely to actively promote your business
  • Detractors (0-6) who are unhappy with their experience and could hurt your business with bad reviews or word-of-mouth.

To calculate your NPS®, you simply subtract the percentage of customers who are Detractors from the percentage who are Promoters, making your Net Promoter Score® a number between -100 and 100.

General Score Guidelines  As a general rule of thumb1, an NPS® score above 50 is considered very good, a score of 30-49 is considered good (but with some room for improvement), and a score of 30 is considered average for most industries. Scores much lower than 30, especially if they’re in the negative range, are a red flag and may inhibit business growth. You may want to survey or talk to your customers to pinpoint the exact causes of dissatisfaction and address them immediately.

Different Industries, Different Standards Each industry’s benchmarks for NPS® are unique, so what is considered good for an investment firm, for instance, might be below average or poor for an auto dealer. While raw numbers are helpful, it is important to consider your NPS®  in the context of your industry and your competitors. Consider these numbers from one 2013 study2:

Industry

Low NPS

Avg. NPS

High NPS

Software Firms

10

29

44

Retailers

-3

28

60

Health Plans

-3

9

27

Banks

-42

13

65

Insurance Carriers

1

26

66

More Responses, More Accuracy Another factor to consider when looking at your NPS®  is how many results it’s based on. While an NPS® of 50 is something to be proud of, you may want to temper your celebration if it’s based on two surveys. The more responses you get, the more secure you can feel in the accuracy of your NPS® Net Promoter Score® is a wonderful tool, but knowing how satisfied your customers are isn’t helpful unless you also know what factors led to that satisfaction. That’s why xAmplifier’s surveys begin with NPS® and then mine more specific information about what your customers did and didn’t like about their experience. By knowing their decision drivers and opinions, you can begin to work at specific changes to boost your NPS® and your business!

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http://www.friendsoffeedback.com/the-holy-grail-of-measuring-loyalty-net-promoter-score/

2 http://experiencematters.wordpress.com/2013/11/13/report-net-promoter-score-benchmark-study-2013/

Satmetrix released its own 2013 study

(http://www.insightsfromanalytics.com/blog/bid/324678/Top-10-U-S-Net-Promoter-Scores-NPS-for-2013) and while it found most of the same industry-leading companies, its numbers trended higher.

*Net Promoter, Net Promoter Score, and NPS are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld.*

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