Net Promoter Primer
The measurement criterion underpinning the Circle of Excellence is Net Promoter® Primer, or NPP. This metric is designed to reflect the extent to which customers are prepared to recommend their Sage Business Partner.
Given that word of mouth recommendation is the most important driver of new business, the more customers in the market place recommending their Sage Business Partner to others, then the more new business that Business Partner is likely to achieve.
Moreover, academic research (Reichheld et al, December 2003, HBR) proves that a company with a higher proportion of customers proactively recommending the company (‘promoters’), as opposed to doing the opposite (‘detractors’), is extremely likely to grow. A company with more detractors than promoters, is, on the other hand, extremely likely to contract. It follows that it is vital for any customer-facing organization to assess the extent to which its customer base comprises promoters as opposed to detractors. The objective, of course, is to have net promoters. The richer the premium of net promoters, the better. The Net Promoter® Primer score (or NPP) measures the extent of the net promoter position.
The research is very telling – almost without exception companies with a positive NPP score grow revenues and profits, whereas almost without exception companies with a negative NPP score contract in terms of revenues and profits.
The calculation of the NPP score works as follows:
An independent research company contacts a sample of our customers to ask the following question:
"To what extent, on a scale of 0 to 10 where 0 is not at all, and 10 is very high, would you be likely to recommend [Business Partner Name] to another business?”
Answer |
|
9 - 10 |
Promoter |
7 - 8 |
Do not count as they are deemed to be indifferent customers without much interest in influencing others |
0 - 6 |
Detractor |
The NPP score is derived by subtracting the detractors from the promoters and expressing the result as a percentage of all those questioned.
Example 1 |
Calculation |
10 promoters, |
10 - 5 = 5 |
Example 2 |
Calculatuion |
10 promoters, |
10 - 15 = -5 |
Some benchmarks against which to measure these scores are as follows: positive number means that revenue and profit growth is extremely likely; negative numbers suggest the opposite; +16% is the average score that Reichheld found in his study of 4,000 US corporations; +50% is a world class score.
® Net Promoter is a registered trade mark of Satmetrix Systems
