We have categorized 2 documents as Net Promoter Score. All documents are displayed on this page.

In the words of Bill Gates, "Your most unhappy customers are your greatest source of learning." This sage business advice underpins the principle of the Net Promoter Score (NPS)—a customer loyalty metric thought to be a key indicator of a company's relational health and future growth. Increasingly, Fortune 500 executives view NPS as an essential part of their company's Performance Management strategy. This article delves into the composition of NPS and shares best practices for its effective usage as part of a broader Strategic Management repertoire. Learn more about Net Promoter Score.

Did you know?
The average daily rate of a McKinsey consultant is $6,625 (not including expenses). The average price of a Flevy document is $65.


Trusted by over 10,000+ Client Organizations
Since 2012, we have provided best practices to over 10,000 businesses and organizations of all sizes, from startups and small businesses to the Fortune 100, in over 130 countries.
AT&T GE Cisco Intel IBM Coke Dell Toyota HP Nike Samsung Microsoft Astrazeneca JP Morgan KPMG Walgreens Walmart 3M Kaiser Oracle SAP Google E&Y Volvo Bosch Merck Fedex Shell Amgen Eli Lilly Roche AIG Abbott Amazon PwC T-Mobile Broadcom Bayer Pearson Titleist ConEd Pfizer NTT Data Schwab




Read Customer Testimonials

  •  
    "As a small business owner, the resource material available from FlevyPro has proven to be invaluable. The ability to search for material on demand based our project events and client requirements was great for me and proved very beneficial to my clients. Importantly, being able to easily edit and tailor "

    – Michael Duff, Managing Director at Change Strategy (UK)
  •  
    "As an Independent Management Consultant, I find Flevy to add great value as a source of best practices, templates and information on new trends. Flevy has matured and the quality and quantity of the library is excellent. Lastly the price charged is reasonable, creating a win-win value for "

    – Jim Schoen, Principal at FRC Group
  •  
    "As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power. For us, it is an invaluable resource to increase our impact and value."

    – David Coloma, Consulting Area Manager at Cynertia Consulting
  •  
    "As a young consulting firm, requests for input from clients vary and it's sometimes impossible to provide expert solutions across a broad spectrum of requirements. That was before I discovered Flevy.com.

    Through subscription to this invaluable site of a plethora of topics that are key and crucial to consulting, I "

    – Nishi Singh, Strategist and MD at NSP Consultants
  •  
    "I have used Flevy services for a number of years and have never, ever been disappointed. As a matter of fact, David and his team continue, time after time, to impress me with their willingness to assist and in the real sense of the word. I have concluded in fact "

    – Roberto Pelliccia, Senior Executive in International Hospitality
  •  
    "I am extremely grateful for the proactiveness and eagerness to help and I would gladly recommend the Flevy team if you are looking for data and toolkits to help you work through business solutions."

    – Trevor Booth, Partner, Fast Forward Consulting
  •  
    "I like your product. I'm frequently designing PowerPoint presentations for my company and your product has given me so many great ideas on the use of charts, layouts, tools, and frameworks. I really think the templates are a valuable asset to the job."

    – Roberto Fuentes Martinez, Senior Executive Director at Technology Transformation Advisory
  •  
    "[Flevy] produces some great work that has been/continues to be of immense help not only to myself, but as I seek to provide professional services to my clients, it give me a large "tool box" of resources that are critical to provide them with the quality of service and outcomes they are expecting."

    – Royston Knowles, Executive with 50+ Years of Board Level Experience



Flevy Management Insights: Net Promoter Score

In the words of Bill Gates, "Your most unhappy customers are your greatest source of learning." This sage business advice underpins the principle of the Net Promoter Score (NPS)—a customer loyalty metric thought to be a key indicator of a company's relational health and future growth. Increasingly, Fortune 500 executives view NPS as an essential part of their company's Performance Management strategy. This article delves into the composition of NPS and shares best practices for its effective usage as part of a broader Strategic Management repertoire.

For effective implementation, take a look at these Net Promoter Score best practices:

Explore related management topics: Performance Management Customer Loyalty Best Practices

The Importance of NPS in Strategic Management

The Net Promoter Score is a straightforward method of gauging customer sentiment. Ask customers one simple question: "On a scale of 0 to 10, how likely are you to recommend our company/product/service to a friend or colleague?" Those who respond with a 9 or 10 are "Promoters", 7 or 8 are "Passives", and 0 to 6 are "Detractors". The actual NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters.

The simplicity and directness of the NPS system make it uniquely actionable: it gives companies the insight they need to improve, and the feedback necessary for actionable Change Management. According to a McKinsey study, a navigation of the customer journey that leads to unsatisfactory experiences can decrease customer-satisfaction scores by almost 20%—a clear risk to future revenue.

Explore related management topics: Change Management Customer Journey Feedback

Optimizing NPS for Business Transformation

Effective use of NPS requires more than just collecting data—it necessitates a proactive approach to Strategy Development. Solicit feedback through various touchpoints, analyze the results and correlate them with other data, such as customer purchase history or demographics. This allows for more precise targeting of improvements.

Ultimately, aiming for an ever-increasing NPS should be woven into a company's Culture of continuous improvement and Operational Excellence. Regularly updating staff training and enhancing service offerings based on customer feedback would contribute to this aim.

Explore related management topics: Operational Excellence Strategy Development Continuous Improvement

Linking NPS to Financial Performance

While there has been some debate about the correlation between NPS and financial performance, a study by Bain & Company found a strong correlation between high NPS scorers and companies with superior revenue growth. Companies that prioritize customer loyalty and use NPS as a tactic within a broader Digital Transformation effort can often outperform rivals.

Explore related management topics: Digital Transformation Revenue Growth

Best Practices for NPS

  • Don't treat NPS as a standalone metric. It's best used as part of a larger, comprehensive dashboard of customer-centric metrics.
  • Close the loop. Always follow up with Detractors to understand their concerns and devise solutions. This promotes trust, reduces churn, and might convert them into Promoters.
  • Train your team. Ensure your staff understand the NPS procedure and its importance to the company's growth. This boosts staff morale and productivity.

Critical Consideration in NPS Application

One critical insight provided by a MIT Sloan Management Review is the "diminishing returns" effect. The research found that while increasing customer satisfaction leads to decreased customer churn initially, there comes a point where further increases in satisfaction do not result in lower churn. This is an essential paradigm to understand and employ strategically in relation to NPS to ensure that efforts and resources are deployed in the most effective manner.

Gaining a deep, data-informed understanding of customers via metrics like NPS can be a gateway to greater Business Transformation, Operational Excellence, and ultimately, superior financial performance. Keeping the customer central is critical now, more than ever, in a landscape that is increasingly competitive and rapidly evolving.

Explore related management topics: Business Transformation Customer Satisfaction

Net Promoter Score FAQs

Here are our top-ranked questions that relate to Net Promoter Score.

How is the increasing importance of sustainability and corporate social responsibility affecting NPS scores across industries?
The growing consumer demand for sustainability and Corporate Social Responsibility (CSR) is significantly enhancing Net Promoter Scores (NPS) across industries by influencing purchasing decisions and brand loyalty. [Read full explanation]
How does NPS correlate with actual business growth and profitability in various industries?
NPS is a key predictor of business growth and profitability, with its impact varying across industries, necessitating industry-specific strategies and integration with broader Strategic Planning and Performance Management efforts. [Read full explanation]
What is the role of NPS in evaluating the effectiveness of customer service chatbots and virtual assistants?
NPS is a vital metric for assessing customer satisfaction and loyalty with chatbots and virtual assistants, guiding improvements and strategic decisions for business growth. [Read full explanation]
What strategies can companies employ to improve their NPS among millennials and Gen Z consumers?
Improving NPS among millennials and Gen Z involves focusing on Authenticity, leveraging Digital Transformation, and prioritizing Sustainability and Social Responsibility to align with their values and expectations. [Read full explanation]

Recommended Documents

Related Case Studies

NPS Strategy Development for Telecom in Competitive Landscape

Scenario: A telecom company, operating in a highly competitive market, is grappling with stagnating Net Promoter Scores (NPS) despite increased investment in customer service and experience.

Read Full Case Study

NPS Strategy Reinvention for a Forestry Products Leader

Scenario: A top-tier firm in the forestry and paper products sector is grappling with stagnating Net Promoter Scores (NPS) despite consistent product quality and customer service investments.

Read Full Case Study

Net Promoter Score Advancement for Food & Beverage Sector

Scenario: A firm in the food & beverage industry is facing challenges with stagnant or declining Net Promoter Scores (NPS) despite increased investment in customer experience initiatives.

Read Full Case Study

Net Promoter Score Analysis for Aerospace Defense Firm

Scenario: An aerospace defense company is facing challenges with a stagnant Net Promoter Score (NPS) despite recent investments in customer experience improvements.

Read Full Case Study

Net Promoter Score Enhancement for Telecom Provider

Scenario: The organization is a mid-size telecom provider experiencing a plateau in customer loyalty and satisfaction.

Read Full Case Study

Net Promoter Score Advancement for Telecom in Competitive Landscape

Scenario: A leading telecommunications firm in a highly competitive market is observing stagnation in its customer loyalty and retention metrics, as indicated by its Net Promoter Score (NPS).

Read Full Case Study

Explore all Flevy Management Case Studies




Flevy is the world's largest knowledge base of best practices.


Leverage the Experience of Experts.

Find documents of the same caliber as those used by top-tier consulting firms, like McKinsey, BCG, Bain, Deloitte, Accenture.

Download Immediately and Use.

Our PowerPoint presentations, Excel workbooks, and Word documents are completely customizable, including rebrandable.

Save Time, Effort, and Money.

Save yourself and your employees countless hours. Use that time to work on more value-added and fulfilling activities.



Download our FREE Strategy & Transformation Framework Templates

Download our free compilation of 50+ Strategy & Transformation slides and templates. Frameworks include McKinsey 7-S, Balanced Scorecard, Disruptive Innovation, BCG Curve, and many more.