The Net Promoter Score, or NPS®, is based on the fundamental perspective that every company’s customers can be divided into three categories: Promoters, Passives, and Detractors. By asking one simple question — How likely is it that you would recommend [your company] to a friend or colleague? — you can track these groups and get a clear measure of your company’s performance through your customers’ eyes. Customers respond on a 0-to-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. To calculate your company’s NPS, take the percentage of customers who are Promoters and subtract the percentage who are Detractors. NPS can be as low as ?100 (everybody is a detractor) or as high as +100 (everybody is a promoter). An NPS that is positive (i. e. higher than zero) is felt to be good, and an NPS of +50 is excellent. Companies are encouraged to follow this question with an open-ended request for elaboration, soliciting the reasons for a customer’s rating of that company or product.
These reasons can then be provided to front-line employees and management teams for follow-up action. Many companies which use NPS, call back customers to engage them in a discussion about the feedback they provided through the NPS survey process, solve problems, and learn more so they can coach account representatives. [email protected] Apple is one of the premier exponents of the Net Promoter Score for systematically listening to customers and managing its business in response to what they hear. Apple listens daily Listening to customers isn’t something Apple does once a year or even once a quarter. NPS plays a central role in the daily management of Apple’s three-hundred plus stores.
“Comments from customers help store managers prepare for service recovery calls with detractors to close the feedback oop. The outcomes of these calls, together with the customer comments, provide important coaching and feedback messages that are passed along to employees. ” Employees who create promoters are recognized by managers. In some stores, customer comments are scrolled across a large-screen TV monitor in in the employee break room. Meanwhile Apple’s central NPS team analyzes customer feedback from all the stores to understand the systemic reasons for promoter’s enthusiasm or lack thereof.
At Apple, store managers call every detractor within 24 hours. Initially, they found there were some detractors they couldn’t reach. Subsequent studies showed that detractors that they did reach purchased substantially more Apple products and services than the others. Further studies showed that every hour spent calling detractors was generating more than $1,000 in revenue or additional sales of $25 million in the first year, which was a good return on the investment.
When Apple began measuring NPS in 2007, its 163 stores already had a very good NPS of 58%. In 2011, its 320 stores have an outstanding NPS of 72%. The best stores achieve a remarkable 90% NPS. Is the primary source of customer enthusiasm Apple’s amazing products or cool design? No. The most common reason for becoming promoters is the way store employees treat them. The reason Apple is so committed to NPS? It helps everyone to do the right thing—enrich the lives of the customers they touch.