Ask anyone running a small business or large enterprise, and chances are they will cite the quality of their customer service as one of the key reasons people buy from them – often based on verbal feedback they get from internal staff and customers. This is fine, but it lacks a universal measurement that would quantify just how great the customer service is, where it needs to improve, and how it stacks up against competitors. And you don’t need a 30-question survey to find out. In fact, you just need to ask one important question:
“How likely are you to recommend <insert your company name> to a colleague or friend?“
The answer to this one question gives you your Net Promoter® Score (NPS), a customer service measurement developed by Fred Reichheld and popularized through his book The Ultimate Question. NPS is now being used by leading organizations around the world as the standard for measuring and improving customer loyalty. Here’s how it works:
1. Ask The Question With A 10-Point Rating Scale
Customers respond on the 10-point rating scale and are categorized as follows:
- Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others, fueling growth.
- Passives (score 7-8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
- Detractors (score 0-6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.
If you’re not getting top marks (9’s and 10’s), you get a lower NPS and you know your customer service needs to improve. Companies with high NPS are Apple (77) and Adobe (46), while AT&T (11) sits at the opposite end of the spectrum. The goal is to have far more Promoters than Detractors, and to convert Passives into Promoters over time.
2. Calculate Your NPS
To calculate your NPS, just takes the percentage of customers who are Promoters and subtracts the percentage who are Detractors. Formula: PROMOTERS – DETRACTORS = NPS
Share with all members of your staff, rally around the behaviors that will drive your number up, and measure continuously – monthly, quarterly, bi-annually, or annually – you decide but stick to it.
Using NPS rather than just relying on verbal feedback gives you an effective measurement that provides insight on how well you are servicing your customers, where you are doing well, and where youe can improve.
Rajan is the founder and Editor-in-Chief of BIG Marketing for Small Business. He's an award-winning marketing strategist who is passionate about branding, digital marketing and social media. He spent nearly a decade as the marketing executive at global IT firm Peer 1 Hosting and was instrumental in their explosive growth.