Do You Know What Your Customers Are Thinking?

What are you measuring to assess how your customers perceive your business? We all are experiencing a significant transformation in our customers’ behavior today, and we want to understand how they view our respective businesses.

The Net Promoter Score methodology developed by Fred Reichheld (author of The Ultimate Question) is an effective and powerful way to measure customer satisfaction. It is based around asking your customers a single question that predicts both repurchase and referral.

Here’s how it works. Survey your customers and ask them this one question:

“On a scale of 0 to 10, how likely are you to recommend [insert your company name] to a friend or colleague?”

How the Scoring Works

The answers to the ultimate question are on a simple zero-to-ten scale. The responses are clustered in three groups, each characterized by different attitudes and behaviors.

Promoters (9 or 10). Promoters are your loyal, enthusiastic fans that sing your praises to friends and colleagues. They account for more than 80 percent of referrals in most businesses.

Passives (7 or 8). This group is satisfied—for now. Their repurchase and referral rates are as much as 50 percent lower than those of promoters.

Detractors (0 to 6). Detractors are unhappy customers. They account for more than 80 percent of your negative word-of-mouth.

Net Promoter Score

Your Net Promoter Score is the percentage of promoters minus the percentage of detractors. You can compile and track this regularly, not only for your whole company but also for individual divisions, products or services. You can also track it for customer segments, geography or functions. It helps your leadership team focus on both creating more promoters and fewer detractors. It is your customer balance sheet.

The Net Promoter system gives you more than just a score. By asking your customers the reasons for their ratings using an unstructured, open-ended question, you have the opportunity to hear comments from customers in their own words.

Your goal is to see your Net Promoter Score increase over time. The beauty of this system is its simplicity.

The average company in the United States has a Net Promoter Score of between 10 and 15 percent. According to a Satmetrix study, the U.S. companies with the highest score are: