Net Promoter: An Endeavor to Measure 'Enriching Experience'

A Review of Reichheld's Take

on Net Promoter and its Prominence.

#EnrichingExperience. It’s my passion, the driver in my education and work endeavors, and the penultimate purpose I hope to unearth and cultivate. 

As companies focus on #EnrichingExperience for customers while also growing their retention & CLV, one of the prominent measurements that are tipping the top of the CLV scales is Net Promoter. It is simple for customers to complete and functional for companies to interpret. But is it the main metric business leaders should focus on in order to increase value and truly enhancing CRM? Is this stat the secret to success in creating enduring and true customer loyalty? This article from the Harvard Business Review written by the renowned figure in the Customer Engagement and Loyalty Management realm, Frederick Reichheld begs the question and has my thoughts brimming with ideas.

Before deciding whether it is the glory hole of loyalty or a measly metric to shove in the virtual filing cabinet of computations, it's important to know what this number is, what it means, and what an interpretation of it might insight. What exactly is this "Net Promoter Score"? Another Social Media Ad? A Scary Computerized Scale Scam? No.

The Net Promoter Score is a loyalty measurement of how likely customers would be to buy products or services from your business again, measuring customer retention rates and potential CLV, while also measuring how likely they may be to tell a companion or their community about the brand or company, spreading positive word of mouth. It is highly based on customers' likelihood to refer friends and recommend others to the business in question. To calculate a Net Promoter score, an interval scale is used to measure customer loyalty and satisfaction, with 10 being extremely satisfied and likely to continue in a loyal relationship with a business and positively promote that business to their public sphere, and 0 being very dissatisfied and unlikely to come back or recommend your business unless it is in a less-than-desired negative note regarding their experience. The more likely someone is to recommend your business, they are a “promoter”, and the less likely someone is to recommend your business, they are a “detractor”. Net Promoter then takes into consideration all of these numbers from their consensus of customers who partook in the simple survey and makes a percentage of average their rankings. From there, a business’ Net Promoter score can be tracked over time to evaluate if their efforts ranging from marketing to strategic initiatives geared toward driving loyalty to their business actually do impact and help to increase their score. It is said to be the easiest way to assess customer attitudes and to build customer loyalty in one swoop measurement, according to Reichheld.

Personally, I believe that Net Promoter is extremely beneficial and is, in fact, the main number a company should rely upon in terms of assessing their growth and increasing customer retention and CLV. My penultimate argument for this is the fact that it helps in revealing customer attitudes towards a company, which is a very difficult task yet crucial to finding the true drivers of customer loyalty. It is also extremely helpful in gaining feedback, as most commonly the main customers that will partake in the survey and contribute to the Net Promoter measurement are either those of whom are extremely dissatisfied and unlikely to spread positive word of mouth, and those of whom are extremely enthralled and likely to sing your praises. Considering this, a business can then address both segments of customers, focusing in on what exactly made a product or service so dissatisfying for detractors and aiming to ameliorate the dissonance, while also allowing them to address what made the promoters’ so enthused by their delivery of excellence in their specific sector of business. In having both ends of the spectrum measured, you can make efforts to improve areas of weakness while further amplifying what appear to be arising strengths. Along with that key insight, it can also potentially aid in assessing who seems to be a business' target market so they can focus more efforts solely toward their group and maximally reap benefits from their efforts and truly tap into potential retention. Having said this, I believe that not only does it allow one to assess baseline behavioral components of customers, but it gives insight into customers' attitudes, which then allows for identifying a business's strengths and direct development drivers toward deeper relationships through being able to differentiate between actual emotions of customers as opposed to purely founding assumptions upon behavioral aspects without the key knowledge of their motives being habitual or truly bonded through emotion and attitude. Lastly, if a business places an emphasis upon growing their Net Promoter score, it innately increases retention and CLV while also giving insight into how those numbers were raised in the first place and which of their efforts, more acutely and specifically, made an impact in boosting them and bolstering their bonding.

Considering all things Customer Loyalty, I must say I agree with Reichheld and I believe it is, in fact, the most insightful stat to consider in measuring the grand gamut of customer loyalty.

What do you say?

I’d love to share

enlightening insight & how to

#EnrichExperience. 

Reichheld, Frederick F. “The One Number You Need to Grow.” Harvard Business Review, 16 July 2015, hbr.org/2003/12/the-one-number-you-need-to-grow.