NPS – How Net promoter Score is calculated
Customers are asked one ultimate question, “How likely is it that you would recommend this company to a friend?” Based on their response to this question customers are then divided into three groups.
- 0-6 are Detractors These are customers that have generated sales but are actually bad for the company over the long term.
- 7-8 are Passives These customers are generally positive about the company but are considered significantly less valuable than Promoters.
- 9-10 are Promoters These customers drive business growth. The company has gone beyond satisfying their needs and truly delights them.
The Net Promoter Score is created by calculating what percentage of a company’s customer base are Promoters and then subtracting the percentage who are Detractors. The customers who are Passives are neutral and are excluded from the equation. %Promoters -%Detractors = NPS.
NPS – See results from Net Promoter Fast Start Methodology in just 10 weeks
Only if a person feels really good about a supplier will they be prepared to recommend them.
For this to occur TWO conditions must be satisfied:
- Engage the Customer’s Head - The Customer must feel that they are receiving superior value – price, features, quality and ease of use.
- Engage the Customer’s Heart - The Customer must feel committed to the relationship – must feel that the supplier understands them, values them, listens to them and acts accordingly.
Only when both sides of this equation are fulfilled will a Customer enthusiastically recommend a company to a friend. The Results... on average, a 12 point increase in NPS leads to a doubling in a company’s growth rate.
The link between Net promoter Score and Complaints Strategy
There is a strong link between complaints handling and net promoter score. TMI has over a decade of experience in converting detractors into promoters. TMI Australia can call on experiences working with:
- Orica Mining Services
- Dulux
- Sellies
- Westpac
- Commonwealth Bank of Australia
- Country Energy
- Citi Power
- Jetset
Which Australian Companies have the best NPS?
Many of Australia’s leading companies have adopted Net Promoter Score as an important performance metric. It provides a simple, comparable measure of customer satisfaction and is a key indicator of future business growth. The goal is NOT to have a high NPS – by itself it is not a sufficient condition for growth; it is only a measure of the quality of a company’s relationships with its customers. NPS is a useful tool for making decisions, innovating and doing what is necessary for growth.
BRAND |
%Promoters |
%Passive |
%Detractors |
NPS |
Bendigo Bank |
37 |
33 |
30 |
+7 |
Singapore Airlines |
48 |
44 |
9 |
+39 |
Emirates |
52 |
23 |
25 |
+27 |
BMW |
61 |
36 |
2 |
+59 |
Volkswagon |
50 |
47 |
3 |
+47 |
Audi |
55 |
35 |
10 |
+45 |
Mercedes Benz |
48 |
43 |
9 |
+39 |
Subaru |
46 |
44 |
10 |
+37 |
Toyota |
32 |
48 |
19 |
+13 |
Mazda |
29 |
53 |
17 |
+12 |
Apple |
48 |
33 |
19 |
+29 |
Sony |
27 |
51 |
22 |
+5 |
Toshiba |
25 |
53 |
22 |
+3 |
45 |
40 |
15 |
+30 |
|
Financial Review |
31 |
56 |
13 |
+17 |
The information in the above table was reported on by Mark Ritson - Associate Professor of Marketing at the Melbourne Business School and published in his report: Net Promoter Score Australia 2006 
.
Reference Book: The Ultimate Question - Fred Reichheld - Read a description here
The Ultimate Question - Fred Reichheld - Read it on Amazon
Would You Recommend Us? That simple query to customers is shaking up planning and executive pay - Business Week - read online
The NPS Theory in Action - Read
More Information on NPS Fast Start…
Want to know more?
Complete this form and we will forward you more details of our consultancy services. If you have further questions please call TMI on (03) 9602 3500.
Register your interest:
* denotes required field