Friday, July 30, 2010

Net Promoter Score .. How is it useful ?

Net Promoter Score is a simple and effective method to evaluate a product or service. Introduced by Reichheld in 2003 thru an HBR article, it is very effective in determining customer perceptions of the product or service in question.

Here is what wikipedia says of the same http://en.wikipedia.org/wiki/Net_Promoter
All about Net Promoter Score ..

For example if you want your students to evaluate their faculty member, it suffices to ask just one question, instead of the myriad of questions which are often asked.

Will your student recommend you to a new student ?

On a scale from 0 to 10, with 0 being for not at all to 10 being highly recommended, score from 0 to 6 are the detractors, 7-8 are the passives and 9-10 are the promoters.

Your net promoter score is the difference between the percentage of promoters and the percentage of detractors. An NPS of 75% is considered very good. A negative score would mean that one has no moral authority to continue in the area one is operating presently.

This single question is often accompanied by an open ended question on what the customer thinks about the product or service and how it could be improved. The company thus has an opportunity to work on their weak areas and consolidate on the stronger areas.

Read this Business week article on NPS http://www.businessweek.com/magazine/content/06_05/b3969090.htm?chan=db
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