The reaching of as little as a 5% increase in customer loyalty can increase profits for a company by up to 100%. That’s what Fred Reichheld says in his book The Loyalty Effect, who, along with the company Satmetrix, was the inventor of the Net Promoter Score (NPS).<\/p>\n\n\n\n
The NPS is a score that measures clients’ fidelity. Its first reference appeared in 2003, in the article titled “The One Number You Need to Grow,” written by Reichheld and published in Harvard Business Review.<\/p>\n\n\n\n
As a measurement system, the NPS has one goal: to find out how likely a person is to recommend a brand, company, product or service to another person. To achieve this goal, the Net Promoter Score is based on a simple question to the customer, which can vary in style and wording, but still keep the same essence. For example:<\/p>\n\n\n\n
This is an important point when you consider that recommendations from people close to you are the “advertising” message that generates the most trust in 83% of customers. Along the same lines, we have that general recommendations directly influence the purchase decisions of at least 30% of consumers, which is not a small number! Thus, the NPS indicator is indispensable for companies seeking to improve their profitability through word-of-mouth (WOM), promoted primarily by customer satisfaction.<\/p>\n\n\n\n
One of the main advantages of the NPS is its high level of accuracy. Other types of customer satisfaction and retention surveys have high margins of error because they are much more flexible when it comes to classifying a customer as satisfied.<\/p>\n\n\n\n
To avoid the same inflation, the NPS is strict about focusing only on scores 9 and 10 when considering whether a customer is truly satisfied with the company. Hence the statistical rigor that has ensured the success of the Net Promoter Score system worldwide. In addition, among the other important benefits of the NPS, we also have the following:<\/p>\n\n\n\n
However, it’s important to clarify that everything about customer satisfaction is a fairly broad ecosystem, involving different tactics, tools and indicators. NPS is just one of the most important measures, but not the only one.<\/p>\n\n\n\n