The goal of many businesses operating in the modern day is to remain effective at the lowest cost possible. The lower costs are, the more the potential profits can be. Net Promoter Score, or NPS, refers to a customer-loyalty metric. This is used to gauge how willing consumers are to recommend services or products to others. How can the Net Promoter Score cut costs is a question that business professionals might ask themselves.
The NPS is often used in conjunction with or as an alternative to customer satisfaction measurements. The concept was originally developed by Fred Reichheld and has grown in popularity over recent years. It is now employed in many different industries and organizations worldwide.
In the world of business, consumers are of the utmost importance. After all, without customers to purchase the services or goods, a business would be ineffective. The Internet and technology have made it easier than ever for consumers to share information and opinion on a number of topics, including businesses and their goods or services. The NPS tracks how customers would represent something to their associates, friends and family.
Getting positive consumer representation is basically free marketing. This is how businesses can cut costs. If they have consumers who are willing to share how good their services or goods are, they will be able to boost business growth.
The NPS offers a gauge of how businesses are doing by questioning its consumers. Based on the score, businesses can learn more about what efforts they need to make to improve customer satisfaction and their business. This is priceless feedback. Online marketing is typically less expensive than traditional forms of marketing and advertising.
This score places consumers into one of three categories: detractors, passives and promoters. The group they are placed in is based on their response to a simple question of how likely they are to recommend a business to a colleague or friend. Respondents use a standard scale from zero to 10 or not likely to extremely likely. Generally these questions are asked through online surveys after customer service communication or purchases. It might also be used as an ongoing consumer pulse study.
Detractors can be dangerous for a brand, diminishing reputation through negative word of mouth. Passives have general satisfaction with a brand but are not as enthusiastic as promoters. Loyal customers and enthusiasts will fall into the promoters category and are expected to continue buying from the business and referring to others. Referrals from these consumers can aid in viral growth and bring in new customers at a low acquisition cost.