Do you use Net Promoter Score (NPS) or employee Net Promoter Score (eNPS) in your business?
NPS or eNPS is a management tool that can gauge the loyalty of consumers (or employees). One number can offer a simply trend view. More than two thirds of Fortune 1000 companies use this metric. It is a registered trademark of Fred Reichheld, Bain & Company, and Satmetrix.
It was introduced by Reichheld in his 2003 Harvard Business Review article “One Number You Need to Grow.” NPS can be as low as −100 (everybody is a detractor) or as high as +100 (everybody is a promoter). An NPS that is positive (i.e., higher than zero) is felt to be good, and an NPS of +50 is excellent.
One Number Trends
Simply put, NPS can be one number you can follow over time, and it is easy to measure. Many companies do single, simple survey questions:
“On a scale of 0-10, would you recommend our product (or service) to a friend?”
If you can ask this question regularly after a transaction or at another critical point in a customer’s journey, you can watch over time the trend. NPS creates a simple number (not a percentage).
- People who score 9-10 are Promoters
- People who score 0-6 are Detractors
- People who score 7-8 are Passives.
The Net Promoter Score calculates by subtracting the percentage of customers who are Detractors from the percentage of customers who are Promoters. For purposes of calculating a Net Promoter Score, Passives count toward the total number of respondents, thus decreasing the percentage of detractors and promoters and pushing the net score to 0.
Example:
- If you received 100 responses to your survey:
- 10 responses were in the 0–6 range (Detractors)
- 20 responses were in the 7–8 range (Passives)
- 70 responses were in the 9–10 range (Promoters)
Calculating the percentages for each group gives you 10%, 20%, and 70% respectively. Subtract 10% (Detractors) from 70% (Promoters), which equals 60%. Since a Net Promoter Score is just an integer and not a percentage, your NPS is simply 60.
eNPS
The same management tool can before companies who want to regularly ‘take the temperature’ of a company’s culture. Asking associates if they would recommend joining your company to a friend, gives you a single number to follow over time. Is it trending negatively, neutral or positive? You can do this type of survey quarterly or once a year.
Like a thermostat in your office or home, NPS can help you check if things are cool or heating up. Fortunately, SurveyMonkey has an easy way to execute these simple surveys and will calculate the NPS for you.
What’s your NPS number?
Need help figuring out how to measure your net promoter score? You can set up a time to chat with me about your marketing challenges using my calendar. Email me jeffslater@themarketingsage.com Call me. 919 720 0995. The conversation is free, and we can explore if working together makes sense. Try my new chat feature on my site if you have a quick question.
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