Today, i am writing this blog about Net Promoter Score (NPS). Since 2003, NPS was adopted by many companies.
It determine customer loyality database which align with revenue. In Simple, if NPS is high, you are doing very good. If it’s low, then you need to analyze your score.
It was introduced by Reichheld in his 2003 Harvard Business Review article “One Number You Need to Grow”
NPS answer very simple question. ” How likely is it that you would recommend our company/product/service to a friend or colleague? The scoring for this answer is most often based on a 0 to 10 scale”
Those who respond with a score of 9 -10 are called Promoters, and are considered likely to exhibit value-creating behaviors, such as buying more, remaining customers for longer, and making more positive referrals to other potential customers.
Those who respond with a score of 0 to 6 are labeled Detractors, and they are believed to be less likely to exhibit the value-creating behaviors.
Responses of 7 and 8 are labeled Passives, and their behavior falls in the middle of Promoters and Detractors.
% of Promoter – % of Detractors = NPS
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.
Depending on your score, you can go in depth with root cause analysis why your NPS score is low or high. You can do root cause with technique as below:
Traditional VOC (Voice of Customer) Collection Methods
Learn about a specific customer’s point of view on service issues, product/service attributes, and performance indicators/measures. Supports development of hypotheses about customer needs.
Organize information from the collective point of view of a group of customers that represent a segment. Helps clarify and define customer needs.
Measure the needs or the importance and performance of a product, service or attribute across an entire segment or group of segments. Furnishes quantitative data.
Customer Complaint Data
Collect and classify customer feedback about product performance, features and attributes –classify by type across product lines. Furnishes qualitative and quantitative data.
Ethnographic VOC Collection Methods
Ethnographic Interviews–Asking thought provoking questions –Actively listening to what the consumer is saying
Observation–Carefully and non-judgmentally watching consumers as they go about their daily business (contextual inquiries)–Gleaning insights as you observe the things that they struggle with, are frustrated by, delighted in, and satisfied with
Immersion–Stepping into another person’s life–Living that life for sufficient time to acquire insights
Introspection–Imagining yourself in the role of the consumer–Living your life “in his/her shoes”
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