Net Promoters score is a management tool that is used to check customer loyalty. It helps in getting insight on the relationship of the firm with its customers. Many argue that Net Promoters score is the excellent alternative to the traditional customer satisfaction growth measure which can also be directly correlated to gauge the growth of revenue of a firm. The metric system has been widely adopted by the organizations in the world to measure their customer loyalty.
The score system was developed by the Fred Reichheld, Bain and Company and Satmetrix systems. The way NPS works is by providing scores between -100 to +100. If your score is as low as -100 then it means that the firm has negative relationship with the customers meaning everyone is a detractor. If the score is +100 then it affirms a positive relationship and points out that every customer is a promoter of the organization or holds positive beliefs about it. Mostly, if the NPS is positive or +50 then it is good news for the organization.
Net promoters score helps in easy feedback loop
The Net promoters score chalks out the loyalty dynamics that exist between a service provider and a customer/consumer. The industry using the NPS does not always have to be involved in the service industry but can be an employer as well. Any provider on the questionnaire for the NPS survey is the entity involved in asking questions. Anyone answering is the respondent or customer and can be an employee as well.
The NPS is the willingness of the customers or even employees to recommend the service or organization to the employees. It gauges the loyalty and satisfaction at the same time. The simple question asked is, “On a scale of 0 to 10, how likely are you to recommend this company’s product or service to a friend or a colleague?”.
The responses are then categorized into three categories that are detractors, passives and promoters. Detractors usually give a score of 6 or lower. This means that they are not happy with the services being provided. They are potentially damaging to the brand reputation and are not going to use the services again. Passives fall in between scores of 7 or 8. They are satisfied customers but they can switch side to any competitor brand or firm that offers them more. In all likelihood, they are not going to spread negative comments about the company but will not willingly promote it. Promoters fall in the scores of 9 to 10 which means that they show loyalty with the service. They will recommend the products to other people as well and will be promoters through and through.
You can use it to map out employee engagement as well
NPS can be used to effectively measure the inclination and attitude of the employees in regard to the organization which can then be in return used to know about the culture of the organization. Corporate culture revolves around employee engagement with the firm. It helps in mapping out how exactly the employees view the organization and are likely to endorse it to other people.
In corporate and startup culture using Net promoters score will give out a quick and easy view on how loyal and engaged people are that is a terrific tool for bench-marking the growth of the organization in terms of people. It also can be used to see how different factors influence the perception of the organization over time which can be related to both internal and external environmental conditions. Overtime this measurement can help in mapping out how many people will likely endorse the organization and are satisfied. The information obtained from this can then be consequently used to know what satisfies the employees that can further help in improving the established values and guidelines, in this way you will have many promoters in the organization because positive change will be an ever evolving process.
The world is evolving rapidly and CSR is an important aspect of it. If you are able to keep that in mind while building your corporate or startup strategy then you will succeed. Remember, customer is the center of everything.
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