Service Excellence - Net Promoter Scores

Service excellence. It’s what we strive for, but how do we effectively measure it? Sure, we do customer surveys and evaluations. Yes, we measure the performance of our internal team members. And, of course, we have our own key performance indicators (KPIs) that we track. But, is there one key measurement that encompasses loyalty, relationship and overall service?

Some might lobby that such a measurement exists and is readily available for any organization – the Net Promoter Score™. The Net Promoter Score (NPS) is, in fact, a loyalty metric, developed (and trademarked) by Fred Reichheld, Bain & Company, and Satmetrix. Introduced in 2003, NPS scores can range from -100 (all detractors) to +100 (all promoters). 

Interestingly the NPS is based on one fundamental question, “How likely is it that you would recommend our company/product/service to a friend or colleague?” and may be applied with customers or even internally (employees) and used across nearly any industry – product or service, B2C or B2B. Scoring is based on three primary response categories:

  1. Promoters (those who respond with a rating of 9 or 10)
  2. Neutral (those who respond with a rating of 7 or 8)
  3. Detractors (those who respond with a rating of 0 to 6)

The final NPS is calculated by subtracting the percentage of total detractors from the percentage of total promoters. In most cases, a NPS of +50 or better is considered excellent. 

In the U.S., numerous leading brands use NPS to evaluate their product or service. Some category leaders (2013) include:

  • Airlines – Southwest (66%)
  • Credit Cards – American Express (41%)
  • Hotels – Marriot (62%)
  • Online Services – Amazon (69%)
  • Tablet Computers – Apple (65%)

 

But, don’t be discouraged if your NPS is much less these industry leaders. In Frank Reichheld’s The Ultimate Question (the origins for NPS), he found that the average NPS of the companies he surveyed was between 10% and 15%. Based on his research, Reichheld concluded that if a company’s NPS is 15% or better, it’s growing at a rate faster than the economy (above average) and, if the NPS is 50% or higher, it’s a ‘World Class’ organization (think Apple, Harley Davidson and others).

In the end, NPS is not the only option, but it’s a tested metric that is used by many leading companies today and one that can definitely benefit a business of any size!