Chapter 2

NPS—What It Is and What It Does Well

In the December 2003 issue of the Harvard Business Review, in an article titled “The One Number You Need to Grow,” Frederick Reichheld proposed provocatively that there was a simple, practical way to categorize customers on the basis of their answer to a single question, which was phrased like this:

On a 0-to-10 scale, how likely is it that you would recommend us (or this product/service/brand) to a friend or colleague?

He then instructed companies to ask at least one follow-up question: What is the primary reason for your score?

Reichheld, who is director emeritus of the consulting firm Bain and Company and a Bain Fellow, argued in the article and later in a 2006 book titled The Ultimate Question that the 10-point scale allowed companies to take a quick measurement of customers' feelings and attitudes. The open-ended follow-up question enabled companies to “hear the reasons for these attitudes in the customers' own words.”

On the basis of the answers, the idea is that a company can easily sort out customers who love it, those who hate it, and those who don't care for it one way or the other. It can then compile a simple, easily understandable score—a Net Promoter Score (NPS)—which shows how it is doing on customer relationships. The company can track that score week in and week out, in much the way a business tracks its financial performance.

Reichheld posited that when he and his colleagues at Bain studied the use of these questions, ...

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