Understanding the Net Promoter Score

Understanding the NET PROMOTER® SCORE The Net Promoter® Score is one of the most recognized methods for measuring consumer loyalty. The score is based off answers to the question: "On a scale from 0 to 10, how likely are you to refer a friend?" Extremely likely 10 Promoters (score 9-10) are loyal customers and trusty fanatics that refer others, accelerating growth. 8. Neutral Passives (score 7-8) are content but indifferent customers who are susceptible to a competitor's goods or services. Detractors (score 0-6) are frustrated customers capable of harming your brand and stunting growth through cynical word-of-mouth. Not at all likely NPS® = % of PROMOTERS – % of DETRACTORS $ $ 83 When Apple began measuring NPS in 2007, its 163 stores already had a very By measuring NPS®, USAA's direct banking American Express good NPS® of 58. In 2011, its 320 stores had an outstanding NPS of 72. The best stores achieve a operation led the banking sector sees a 10% to 15% increase in again this year with an NPS® of 83, spending and four to five times the highest NPS® recorded across all brands and industry sectors remarkable 90 NPS®. increased retention. Average Net Promoter® Scores Across Industries (2012) 100 Fast Auto Insurance Software Carriers Companies 41 80 Car Hotel Chains TV Food Dealers Wireless Rental 60 Service Providers Chains Carriers Agencies 45 40 34 36 37 26 26 19 20 -0 -20 -40 -60 -80 -100 Industries Amazon.com Trader Joe's Costco Online Shopping Grocery Department Stores 76 73 71 So how can referral marketing & social media fuel your brand's influence? REFERRAL MARKETING Referral marketing supplies businesses with the tools to capitalize on the enthusiasm of their biggest advocates. After identifying brand ambassadors via Net Promoter® Score, businesses should enroll them into a referral program to drive new business. Here's how Net Promoter Score and referral marketing can boost your bottom line. "Creating a community of advocates drives revenue & growth." Apple, Inc. You are 4 times more likely to buy when referred by your friend. 65% of new business comes from referrals. Online community users who keep up with their favorite brands remain customers 50% longer than non-community users. A referred customer has a 16% higher lifetime value. Online community users visit their favorite brand websites 9 times more often than non-community users. 83% of satisfied customers are willing to refer products and services. Referral programs increase sharing. Noncash incentives are 24% more effective at boosting referral programs 40% of small business owners say that referrals bring in bigger returns than traditional marketing. than cash incentives. Sources: Ambassador Forbes, Harvard Business Review, Genroe, SXSWI, Forrester, Social Media Today, NetPromoter.com & Temkin Group Referral Marketing Software www.getAmbassador.com Net Promoter® Score Likeliness to Recommend to Others