Ann Arbor HubSpot User Group Blog

Track and Measure Customer Loyalty with the Net Promoter Score

Posted by Tom Schwab

Feb 26, 2015 9:05:56 AM

Tom_Schwab_-_Goodbye_Crutches-croppedDo they LOVE you or LOATHE you? That's the only question that matters to your business.

Viral marketing is that elusive goal everyone is selling on the internet. "If only it went viral, our business would blow up and change overnight!" While this is true, it could either be a dream or a nightmare. Would it be the quick death of your business or an exciting rebirth at another level?

Do you quantifiably know if your customers LOVE you or LOATH you?

NPS Measures Your Customers' Love

The best tool to gauge this important question is the Net Promoter Score. NPS is a simple customer loyalty metric. It was first introduced in the Harvard Business Review by Fred Reichland in his article “One Number You Need to Grow

The concept is that every company has 3 categories of customers:

  • Promoters: The loyal champions who will keep buying and referring others.
  • Passives: The satisfied but unenthusiastic customers who may be open to your competitors' offers.
  • Detractors: The unhappy customers who can damage your brand, especially on social media.

To find out what category a customer falls in, ask the very simple question, “How likely is it that you would recommend our company to a friend or colleague?" Give them a scale of 0 (not likely at all) to 10 (extremely likely). You start at 0 instead of 1to avoid any possible confusion that "1" is the highest positive rating.

Calculating Your Net Promoter Score

Calculating the NPS is simple:

NPS = % of Promoters (those who answered 9-10) - % of Detractors (those who answered 0-6)

If everyone loathes you it’s -100.

If everyone absolutely loves you it’s +100.

The reality is usually somewhere in the middle. For 2013 the top 5 reported NPS scores were:

  1. USAA Insurance = 80
  2. USAA – Banking = 78
  3. Costco = 78
  4. Apple = 76
  5. You = ?

Next Steps

About Tom Schwab

Tom Schwab learned this first-hand as he grew his direct-to-patient durable medical equipment company from a regional player in Kalamazoo, MI, to a national leader. After trying all the tricks and going through his self-described Pay-Per-Click addiction, Goodbye Crutches was an eCommerce leader that transformed their online business with an inbound strategy. In 2014, Tom founded Inbound for eCommerce.

See the full bios of all the speakers for this event.

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