Definition: Cus-tom-er Sat-is-fac-tion Sur-vey (n): A long, complicated and arduous task for both a company and their customers that can often yield little to no useful results.
Do you really think your customers WANT to fill out your customer satisfaction survey? How many times have you blasted through a survey just to get the freebie that comes with it? Well guess what? Most of your customers are probably doing the same thing and ruining all your “precious” data.
Furthermore, it can be overwhelming and difficult to make any sense out of the survey responses. Wouldn’t it be nice if there was just one question you could ask your customers that revealed how healthy your business was doing? More importantly, one question that resulted in data that correlated to profitability?
Well, actually, there is. It’s called the Net Promoter Score or “NPS”. NPS is used by some of the biggest brands to measure customer satisfaction and business performance. Who uses NPS?
- General Electric
- Procter and Gamble
- Verizon Wireless
How NPS Originated
NPS was originally introduced by Fred Reichheld in a Harvard Business Review article back in December of 2003. The article entitled “The One Number You Need to Grow” was based on a two-year study that Reichheld decided to conduct, all stemming from inspiration gained at an afternoon seminar.
It all started by Reichheld listening to a talk by Andy Taylor, CEO of Enterprise Rent-A-Car. Enterprise would conduct quick two day surveys across all their locations by only asking their customers two questions. On top of that, the only responses counted and internalized were those from the most enthusiastic customers (these are the customers that drive growth). By doing so, Enterprise could quickly keep tabs on the best performing locations and spread the lessons learned to other branches.
Inspired by this talk, Reichheld went to work trying to develop a simpler and more direct survey that would become a metric for profitability. After two years, Reichheld boiled down that one magic question:
“How likely is it that you would recommend [enter the name of your company] to a friend or colleague?”
How NPS Works
The NPS system states that every company has three types of customers:
- Promoters – Evangelists. Customers that preach and spread the word about your product or service. And of course, they continue to be loyal customers.
- Passives – Customers who are blasé about your company. They may have been satisfied with your offering but can easily go with one of your competitors.
- Detractors – Former customers who loathe your company. They love to preach the “bad news.”
Customers respond to your net promoter score survey by choosing a number between 0 and 10 — “0” being the lowest possible rating (not likely to recommend your company) and “10” being the highest possible rating (most likely to recommend your company). The following scale determines which of the three types of customer buckets they fall into based on their numerical choice:
- Promoters (score 9-10)
- Passives (score 7-8)
- Detractors (score 0-6)
To calculate your company’s NPS, take the percentage of customers who are promoters and subtract the percentage who are detractors. To give you an idea of some (very high) NPS scores, here are a few scores from some familiar brands:
- USAA – Banking 87%
- Costco – Dept Store and Wholesale 77%
- Apple – Computer Hardware 72%
Average companies usually score between 5 and 10%. Stellar companies operate at NPS efficiency ratings of 50 to 80%.
KISSinsights and Net Promoter Score
By simply enabling Qualaroo on your company website you can continually gather NPS data. This will give you year round feedback on how your company is doing and provide a great compass for profitability.
You can easily configure Qualaroo to only show the net promoter survey on certain webpages, or to registered users only. Also, many timing and triggering options are available, so that the survey is only shown to customers at appropriate times.
If you’re interested in trying our NPS solution on your company website, please click on the button above. Feel free to contact Qualaroo if you have any questions with installation or understanding your NPS results.