“This is the best customer metric I have ever seen” Jim Immelt, CEO of General Electric*.
There is one question that provides the best predictor of customer loyalty and for the vast majority of business: How likely is it that you would recommend (Company X) to a friend or colleague? The “Net Promoter Score” or NPS, is simply the percentage of customers whose answers identify them as promoters minus the percentage whose response indicates they are detractors. Comparable to a financial net worth that takes the assets minus the liabilities…
Three Categories of Customers
NPS is based on the fundamental perspective that every company’s customers can be divided into three categories. Customers can be categorized according to their answer to the Ultimate Question based on a 0-to-10 point rating scale with “0” representing the extreme negative and “10” representing the extreme positive end.
- Promoters (those who answer 9 or 10) are loyal enthusiasts who keep buying from a company and urge their friends to do the same.
- Passives (those who answer 7 or 8) are satisfied but unenthusiastic customers who can be easily wooed by the competition.
- Detractors (those who answer 0 through 6) are unhappy customers trapped in a bad relationship.
My friend, Ludovic Philippo started a blog in French on Net Promoter Score concept.