Do you know your Net Promoter score, or NPS? Even small businesses can benefit from this alternative to lengthy customer satisfaction surveys and a relatively new tool for predicting business growth. Your NPS essentially measures the loyalty of your customers, based on the answer to one question: Would that customer recommend your product/services to other people?
According to an article in Business Week,, your customers can be divided into two groups, depending on how they rate their level of satisfaction between zero and ten. On one end of the spectrum, “promoters” are those who give you a score of nine or ten, and at the other end, “detractors” choose numbers from zero to six. The final score omits those who give your business a seven and eight number, equating to “maybes,” or "passives” as they are termed on the Net Promoter Web site.
Of course, reliance on this methodology also has its promoters and detractors. Major companies such as American Express and General Electric are listed as using the metric and some are reported to tie the score to bonuses. Naturally, companies of that size can get feedback from thousands of customers, while, as a business of one to five, you likely have a much smaller sampling.
Net Promoter shows you how to calculate your score. You simply subtract the percentage of detractors from the percentage of promoters. The higher the score, the more likely you are doing things right from the customer’s perspective and on the path to growth. The lower the score, you can be sure your company has problems. The score doesn’t tell you why, but if you see a negative trend, you can address customer dissatisfaction and work to reverse your results. Naturally, you want to check your score periodically and that means repeating your customer survey.
Once you have your NPS, you can go to the Net Promoter site and check how yours compares to examples of other high-scoring companies in a range of industries.