The History of the Net Promoter Score | Putting the Customer First

The Net Promoter Score (NPS) is a leading metric for measuring customer satisfaction and loyalty. Research has shown that a high NPS score is directly correlated to increased business growth. According to a recent Forrester study, 45% of firms use NPS to measure the success of their customer experience efforts, and this number continues to grow every day.

Learn more about the history behind NPS and the companies that are leading the way in customer satisfaction.

The History of NPS

NPS was created in 2003 by Fred Reichheld, a Harvard Graduate, and leader of Bain & Company’s Loyalty practice. Reichheld and his team identified that the fundamental flaw in conventional customer satisfaction surveys was their inability to understand how customers are feeling and how companies can establish accountability for the customer experience.

While companies were conducting surveys, they were unable to connect comments to actions to increase satisfaction levels and drive revenue. This conclusion led Reichheld and team to conduct a research project to determine the best one-question indicator of customer lifetime value. Their conclusion?

How likely are you to recommend [company name] to a friend or colleague?

As Reichheld explains “the Net Promoter Score conveys the essence of the idea – was the customer’s experience so positive that he or she would recommend a product or service.” Those customers willing to recommend a company to others are more likely to make repeat purchases, give referrals and engage in additional customer behaviors, resulting in increased revenue for companies.

While understanding the likeliness of your customer base to recommend your company is important information, the true value for VistaVu of the NPS survey comes from the second question “What Improvements can we make to achieve a higher rating?” . This additional question helps leaders and managers understand actionable steps their teams can take to improve satisfaction and the overall customer experience. Consistently implementing changes based on customer feedback helps to create profitable, sustainable growth, supported by a loyal customer base.

Companies Leading the Way in NPS

Two-thirds of the Fortune 1000 are calculating NPS to support their business growth. While NPS is measured on a scale of -100 to 100, the average NPS score of more than 150,000 companies is currently +32. While this varies based on industry, Bain & Co classify any score above 50 as excellent.

So, what companies top the list of highest NPS Scores and why?

  • 1. Costco (74) – investments into their staff with the underlying belief that happy employees will lead to more satisfying customer experiences
  • 2. USAA (73) – offers perks and features that are unmatched by other providers
  • 3. Southwest Airlines (71) – differentiation through their ‘customer-first’ strategy
  • 4. Ritz Carlton (68) – focus on customer satisfaction and understanding of target audience
  • 5. Apple (68) – attention to the entire user experience and every customer journey step

The common denominator in these company’s high NPS scores is the investments that they’ve made into understanding and improving their customer experience.

VistaVu’s NPS Journey

Since 2018, VistaVu has made consistent investments into customer experience, and a core piece of this initiative has been conducting quarterly NPS surveys. Our first survey resulted in a score of -6, and from that point on we’ve made it a priority to listen to feedback from our customers, have conversations on areas of improvement, and implement changes to improve our customer’s overall experience.

This work effort has resulted in countless process improvements, a new PMO organization to improve project management consistency, free enablement tools, and additional resources and programs to support our customer’s technology investments. Today, our current score sits at 57 and can be attributed to the candid feedback provided by our customers and hard work from our team to deliver exceptional experiences.

To learn more about our commitment to customer experience, take a look at our blog from Lezli Giguere, VP of Customer Experience ‘Customer Experience is an Ever-Evolving Journey.’

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