It measures the likelihood, on a scale of 1 to 10, that someone will recommend your business to someone else. It's a quick, easy, and inexpensive way to employee contact list track how your initiatives are delighting your customers. what_is_nps_copy The theory behind NPS is as follows: Customer satisfaction and loyalty are strongly correlated with sales. A reported propensity to recommend your brand to employee contact list a friend or colleague is strongly correlated with customer satisfaction and loyalty. Why are recommendations important? The NPS tells businesses how they are doing in two very important areas.
Customer promotion and customer retention. Recommendations lead to sales. Word of mouth is the most effective form of marketing as estimated by 64% of marketers. what_is_nps_filler_copy Recommendations from friends and family are more trusted than all other forms of advertising for 92% of consumers, according to employee contact list Nielsen. Image source: It is also an indicator of customer loyalty. Customer retention is essential to profitability because it is much cheaper to get a repeat sale than a new customer. Once you get a benchmark NPS, you can measure it against variables to employee contact list determine their impact on NPS. This way, you can learn how to increase your NPS, as well as your sales.
Why is NPS important now? The Net Promoter Score was invented in 2003 by Fred Reichheld and introduced to the world via “One Number You Need to employee contact list Grow” published in Harvard Business Review. Reichheld wanted to solve the problem of unnecessary customer satisfaction surveys. They tend to be long and complicated, resulting in low response rates and ambiguous implications that line managers find difficult to act on. Plus, they're rarely challenged or audited because most senior executives, board members, and investors don't take them very seriously. This is because their results are not closely tied to earnings or growth. Proponents of NPS claim that it is closely linked to employee contact list profits and growth.