OBJECTIVE
Identify customers’
likelihood of making recommendations.
DESCRIPTION
Usually the value of customers is
calculated using only the variables amount spent and frequency of purchases.
However, customers can create value in several other ways, one of which is by
recommending the service to other potential buyers. The so-called
“word-of-mouth” phenomenon is nowadays empowered by social networks, metasearch
websites, or portals that provide customer feedback on products.
Positive
recommendations can not only increase sales but also allow companies to save
money on advertising. The Net Promoter Score® is an indicator that estimates
the probability of recommendation of a group of customers based on the
recommendation intention of single customers. It was developed and registered
as a trademark by Fred Reichheld, Bain & Company, and Satmetrix.
The data
are collected through surveys, and the respondents are asked to score from 0 to
10 the likelihood of recommending the product or service. Those who respond 9
or 10 are the real promoters, while those who respond 6 or lower are the
detractors. The respondents whose score is from 7 to 8 are considered passive,
since, even if they say that they would recommend the product or service, in
reality they do not recommend it. The NPS® is the percentage of promoters minus
the percentage of detractors.
TEMPLATE