The NPS metric.

The NPS metric.

We will review the NPS metric, how it is formulated and what it brings to the business. We will also analyze how to classify the company’s customers based on NPS as the main customer experience metric.

 

NPS as the main metric for measuring customer experience.

In December 2003, Harvard Business Review published an article by consultant Reicheld entitled “The one number you need to grow”. This article proposes a categorization of customers based on the answer to a single question. This question, NPS, is How likely are you to recommend the product, service, brand to a friend or colleague? The scale of the NPS question is developed on a scale of zero to 10.

From this question, the consultant generated a measure of how the organization generates valuable loyalty relationships. The 0 to 10 scale of the question, its simplicity, allows companies to make a quick measurement of customer sentiments and attitudes.

From this question, the NPS indicator is determined by subtracting the percentage of detractors from the percentage of promoters, a mark that could theoretically range from -100 to +100.

After this question, it was recommended by the author to the companies to ask a second question: What is the main reason for your score?

This open-ended question allows to hear the reasons for your score in the words of the customers.

This first question on favorable recommendation allowed a quick measure of customers’ feelings and attitudes. You can access the opinion of the expert Jeanne Bliss on this subject at the following LINK.

 

The NPS metric.

Ranking customers according to the NPS metric.

Based on this response, customers could be classified into those who love us, those who hate us and those who are somewhere in between. You can graphically consult this classification in the following LINK to the web page of the expert Stacy Sherman.

These two questions provide an initial diagnosis of the root cause and help the right manager get in touch with customers. To be sure you need information about the customer. Once you have established the feedback system you can add other questions without hurting the measurement system.

 

The NPS question allows you to divide customers into:

 

PROMOTERS.

These customers are the ones who answer nine or ten on the scale. They indicate with this classification that their lives have been enriched by their relationship with the company. This type of customer makes repeat purchases, responds to surveys, makes suggestions to the company and gives constructive feedback.

 

PASSIVE.

Those customers who gave a score of seven to eight, from the company only want what they have paid for and nothing more. They are passive satisfied customers, they generate few references and when they generate them they are of little validity.

 

DETRACTORS.

They are those who give a score of six or less than six. They are dissatisfied with how they have been treated. According to Reichheld, companies must deal with detractors by proving the root cause of their disappointment, apologizing and determining ways to resolve the problem. Reichheld recommended that if there was no economic reason for the detractors’ complaints then the company should learn not to acquire such customers.

 

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