What is Net Promoter®?
Net Promoter is a customer loyalty metric originally formulated by Fred Reichheld, Bain & Company and Satmetrix in 2003. At its core Net Promoter is:
• An operational, change Management and business improvement tool.
• That gives you a better understanding of what the key drivers of loyalty are with your customers and employees.
• That then enables you to create sustainable long term profit, growth and competitive advantage.
Net Promoter consists of 2 main parts:
1. The Net Promoter Score
The original score is a customer satisfaction and loyalty indicator that measures the likelihood of customers to recommend a company, product or service to a friend or colleague.
2. Net Promoter System
Takes the Score to the next step and turns results into action. This means businesses can not only learn more about their customers but are also provided the tools to act and improve customer and employee loyalty and business results.
Net Promoter is used by some of the most successful businesses in the world and creates tangible, usable feedback to help businesses change what matters most – customer loyalty.
Why we use Net Promoter in our work
In our 7 step Customer Experience Improvement program we utilise many proven tools and methodology’s where they can add value to our customers overall result. Net Promoter is one of them and we use it because:
1. Proven to be a leading indicator of sustainable future growth & financial success.
As you are measuring customer satisfaction levels (which essentially is your potential for repeat business and positive word-of-mouth).
“If you want to see how a company is doing now, look at their current sales, if you want to know how a company will perform in the future,look at their current customer satisfaction scores” – Joe Calloway
2. It is the loyalty metric of choice
for gauging both short-term and long-term financial success. Net Promoter gives you a better understanding of what the key drivers of loyalty, and therefore financial performance, are within your customer base and business so that you can prioritise your investment of resources to maximise these
3. Simple & Easy to understand and apply
When you compare it to many of the other options out there – many of which are based more on theory than practice. What could be more simple than listening to what your customers are saying and then acting on it to makes things better for everyone.
4. Proven
It is the loyalty metric of choice – It is the most successful and most widely used measure of customer and employee loyalty and the resulting long-term financial success worldwide\
5. Versatile
It works effectively for all businesses – regardless of age, size, location or industry.
6. Improvement focused
Despite popular belief Net Promoter is not all about the score – it is a system of continuous improvement based around 3 key areas – Service Recovery, Root Cause Analysis and Relationship Development.
7. Focuses on client feedback, not business assumptions.
Action is based upon client feedback not business assumptions.
8. Helps drive a customer centric culture within your business.
If you don’t change your culture and focus onto the customer, nothing you do to improve the customer experience will work or last – at best it will be a “flavour of the month” and will be done until you turn your back.
The above are the main reasons we use Net Promoter as part of our 7 Step Process when working with customers. However
To see the advantages for your business in using Net Promoter contact us for a copy of our e-note “Benefits of using NP within your business”
To wet your appetite below is an extract covering the 1st benefit.
Benefits of using NP within your business
The benefits of using NP are numerous, globally proven and apply to all businesses no matter what their type, size, age, location or industry.
NP is the Swiss army knife in your business improvement toolkit – a tool that is important, versatile and useful as a:
1. Profit & Growth tool
NPS lets you focus on creating more loyal customers, who we call promoters. Promoters are a valuable and powerful business asset because :
• Promoters stay customers longer.
• Promoters buy more than other customers.
• Promoters are more interested in, and willing to try new products or services.
• Promoters are less price sensitive – they’re not always hunting ‘the best deal’.
• Promoters cost less to serve and maintain.
• Promoters refer more – they usually account for 80-90% of your referrals.
All the above help create profit, growth and sustainability – financial success!
No other system lets you link improvements in customer and employee loyalty to actual business outcomes.
Download our Benefits of NPS info sheet.
Already using NPS – did you know that 67% of businesses using NPS are either using it incorrectly or ineffectually!
Find out why by reading our “10 most common mistakes Net Promoter users make Net Promoter users make!” and avoid being part of the 67%.