Net Promoter
The Net Promoter Score (NPS ) or promoter overhang is a measure that correlates with the success of the company ( in certain industries ). The method was developed by Satmetrix Systems, Inc., Bain & Company and Fred Reichheld.
Calculation
The Net Promoter Score is calculated by the difference between promoters and Detraktoren of the company concerned. The percentage of promoters and Detraktoren is determined by a representative group of customers exclusively to the question is asked, " How likely is it that you company / brand will recommend X to a friend or colleague? " Are measured responses on a scale of 0 (unlikely ) to 10 ( extremely likely). As promoters, the clients are referred who answer 9 or 10. As Detraktoren however, those are considered that respond with 0-6. Customers respond with 7 or 8, are considered " indifferent ". The net promoter score is calculated using the following formula:
The range of values of the NPS is therefore between plus 100 and minus 100
Assessment
The advantage of the NPS is its simplicity. Fred Reichheld, the correlation between NPS and growth of the company for over 30 industries and empirically determined and corresponding benchmark values . An extensive study in which the reported Reichheld results should be replicated, however, found no significant correlations between NPS and business growth. In addition, there is also reported that the correlations between NP score and actual customer behavior fail ( financial volume of purchases made ) weaker than with other measures of customer loyalty. In addition, several serious methodological flaws of the NPS will be discussed by other authors. Mention is given inter alia, the arbitrary division of the scale in Detraktoren and promoters.
This first of its simplicity and thus apparently associated low cost very charming -looking concept that has supplanted in recent years in many companies, the traditional process-oriented customer satisfaction measurement is, however, at least frequently used incorrectly or incompletely. According to Reichheld begins with the measurement of the Net Promoter Score is a long and sometimes laborious process, the core point is the analysis of responses to the subsequent " why-question " in the context of (many) focus groups. Only in these focus groups is determined by where the actual causes of high or low recommendation lie and what measures the recommendation rate can be increased. In the final analysis, the calculation of the Net Promoter score is likely considered purely from a cost point, not be significantly cheaper than a traditional customer satisfaction measurement.
A disadvantage is that the studies reporting an association between NPS and sales growth in various industries, so far only come from the U.S. and UK. Even if one assumes the validity of those - currently controversial - results, this construction could not be transferred to other countries and cultures easily. The benchmarks that Reichheld has determined so that can not be easily transferred to the German culture, because here the response fails partially different. To use the NPS here, the determination of its own benchmarks in the national context would be to first necessary.
In recent years, the research on NPS has evolved and it is called in the meantime by the Net Promoter system and not from the Net Promoter Score. Core element of the system is about to put on the basis of customer feedback processes of change in the company going. If the NPS properly applied and supported by a Customer Experience Management (CEM ) system, can thus be achieved the following: - During the survey identified critics ( Detraktoren ) can be contacted and their causes for the bad review can be eliminated. - Promoters are identified as such. These are the companies well-disposed and may be helpful for the company, by they are available for case studies may be included in the product development process, etc. - Conceptual and strategic measures for improvement can be identified departmental or divisional level and implemented. Both the middle management and the top management can see what actions are needed to achieve a customer-centric organization.
The NPS score has cultural influences. The score as such can be used as a good indicator to assess whether the implemented improvement measures are effective. Distinction must be made of the relationship NPS, the judges based on the collected experience and willingness to recommend the Transactional NPS, which includes the recommendation on the basis of a single transaction (eg product delivery).