By Jan Dyson, Director of Customer Loyalty Think about the companies you love, and the companies you hate. Easy, isn’t it? The great ones usually come to mind, but the ones you dislike REALLY stand out. And for both, it’s usually because of the experience you’ve had with them, either in terms of service or the quality of their product. Happy customers are loyal customers; they are more likely to purchase additional goods and services from you, and to recommend you to others. Unhappy customers are very disloyal: they’ll leave your company for the competition, and disparage you wherever they go.
You may know a lot about your customers – their business and industry, revenue contributions, but do you know how loyal they are? There is a metric for measuring customer loyalty, and it’s called Net Promoter. And it’s simple to calculate. And it’s all based on the answer to one question, as defined in The Ultimate Question, by Fred Reichheld:
On a scale of 1 to 10, how likely are you to recommend <company or product>?
Those who answer 9 or 10 are Promoters – they are very satisfied with your company, likely to purchase more from you, and recommend you to friends and colleagues.
7s and 8s are Passive – they are neither happy nor unhappy, but are at risk to switch to a competitor
0s through 6s are Detractors – they are unhappy and likely to take their business elsewhere, and speak negatively about you to others.
Subtracting the percentage of Detractors from Promoters gives you your Net Promoter Score (NPS).
Apple is an NPS product leader and it’s not surprising. Who doesn’t love their iPhone or iPod? On the service side, Verizon Wireless is a standout in NPS in the telecommunications industry.
Sage is a strong believer in the Net Promoter methodology. In addition to knowing the score, we also want to know the reasoning behind the numbers; why did you rate us the way you did? We want to know what we can do to make your experience as a Sage customer a positive one.
We survey Sage customers regularly to ask this very question. Your opinion is very important to us! If you are requested to take a Sage survey, I encourage you to take the time to answer “the ultimate question” for us. Also, I encourage you to ask the same question to your own customers. I promise you it will be the start of an amazing journey for your business.
For more information on Net Promoter, visit the Net Promoter website at http://www.netpromoter.com/np/index.jsp
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