A Brief Introduction to Net Promoter Scores

When you make a purchase from a business in your neighborhood, there is a good chance that your checkout receipt has a customer survey attached to the bottom. And if you’re like me, you might have wondered just how companies use the data that they gather from these surveys (okay, maybe it’s a bit strange to wonder that – but we’re business-minded people, so it’s cool). “Who even sees my comments and ratings? And does it even make any difference to the way this business will run their store?” I used to ask myself while filling out the survey to receive $2 off my next burrito. Fast forward to today, and I have discovered that the answer is “yes” – the feedback provided through these receipts does matter, and it’s even more efficient at changing things for the better if the business uses what is called Net Promoter Scores. A business that uses the Net Promoter Score system can quickly identify and solve customer complaints since critical information is processed quickly and precisely.

Thousands of businesses in the United States use this customer feedback system. Fred Reichheld developed and released it in 2003 via the Harvard Business Review article “One Number You Need to Grow” (Reichheld 2003). The system is simple and gathers customer feedback about their experience by merely asking one question. The client is requested to rate the business on a 1 to 10 scale, 10 being the highest, as an answer to how likely it is that they would recommend the business to a friend. After the rating is given, further probing questions are often asked in the same survey to pinpoint the causes of problems or delight that the customer experienced.

At this point, the customer has finished filling out the survey and is off the hook. But the journey of the data that was entered by the customer has only begun. The rating that was given between one and ten is calculated into a score through a simple equation. Ratings of one through six are given the label “Detractor,” while scores of seven and eight are labeled “Passive.” Only the top two scores of nine and ten label a customer as “Promoter.” After each group is labeled, the system calculates the percentage of each group that makes up the entire pool of survey respondents. The percentage of people in the Detractor group is subtracted from the percentage of people in the Promotor group, and the Passive group only counts towards the whole number of customers surveyed. Once complete, this calculation will result in a score between -100 and 100. The higher the score, the better – and 0 is break-even: half your customers are cheering fans, and the other half want to see you go bankrupt.

As you might imagine, much of the power that comes from this system lies in how a business channels the information to make necessary changes. If a customer mentioned that the checkout lines were too long, then the frontline manager can quickly make changes to schedule more cashiers during the time of day that the complaint occurred. The power from this system can be drained, however, if misused. For example, if a company is only concerned with hitting a goal target of say, 50 as a score, then the system will be of little use. Employees may pick and choose which customers to make the survey available to, and some may even suggest and reward customers for high ratings. But if a business wishes to gain by using Net Promoter Score, they will listen to the feedback that the clients are providing, and make quick and efficient changes on the front lines of their business. So, while giving customers $2 off their next burrito is an excellent idea to increase survey motivation, when the right changes are made, a business will hear from many happy customers with or without compensation.


Source:

Reichheld, Frederick F. “The One Number You Need to Grow.” Originally published 2003. Harvard Business Review. N.p., 16 July 2015. Web. 19 June 2017

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One thought on “A Brief Introduction to Net Promoter Scores

  1. I recently went through an airport and there was a simply kiosk with 5 buttons (smiley to frowny faces) with one question. How was your experience? It’s great to hear how that data could be used. Now we have to convince organizations and business to ask the question and do something about it.

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