What is a Net Promoter Score?

February 16, 2012 |
What is a Net Promoter Score?

You may have heard about the popular customer satisfaction metric, the Net Promoter Score. Developed by loyalty expert Fred Reichheld, Bain & Company and Satmetrix, the Net Promoter Score, or NPS®, is a straightforward way to gauge your customers’ loyalty.

The concept was first popularized in Reicheld’s 2006 book The Ultimate Question, which suggests that customer satisfaction is best measured by one simple question, "Would you recommend this business to a friend?"  Based on answers to this question, customers are categorized into one of three groups: Promoters, Passives or Detractors. The percentage of Detractors is then subtracted from the percentage of Promoters to obtain a Net Promoter score (NPS). NPS can be as low as -100 (everybody is a detractor) or as high as +100 (everybody is a promoter).

To give you an example of how different companies score, in 2011 Satmetrix surveyed more than 22,000 US consumers nationwide to arrive at Net Promoter Scores for 170 individual brands across seven industries.

Here is a sampling of those results:

Financial Services:

USAA’s direct banking operation led the banking sector with an NPS of 87%.

Insurance:

USAA dominated both the auto insurance sector at 73% and homeowners insurance at 78%.

Airlines:

JetBlue Airways (60%) and Southwest (59%) dominated the airline rankings.

Telecommunications:

Metro PCS took the top spot in the cellular phone service sector with a score of 41%.

Technology:

Apple continued as the top performer in the computer hardware sector with an NPS of 72%. In the consumer software sector, Symantec earned top position with an NPS of 44%.

Online Services:

Amazon.com led the online shopping sector with an NPS of 70%. In the online search and information category, Google and Facebook led again with scores of 53% and 52% respectively.

Retail:

The grocery and supermarket sector achieved the highest average NPS of all industries examined, with Trader Joe’s increasing its score by 14 points to 82%. And Costco led among department, wholesale and specialty retailers with an NPS of 77%.

Since 2006, the Net Promoter approach has been adopted by many companies, including E.ON, Philips, GE, Apple Retail, Allianz, P&G, Intuit, American Express, and Westpac Banking Corporation. 

So how does Brainshark fare?

We’re very happy to report that in January, 2011 we surveyed our customers and based on their responses to the Net Promoter Score question, Brainshark has an NPS of 70%, placing us in the top ranks with companies like Amazon and Apple!

Since a company’s NPS is linked not only to customer satisfaction, but also to profitable growth, we’re extremely grateful to have so many passionate advocates!

You can learn more about the Net Promoter Score here:

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