The First Group Customers

The first group – customers who give the company a 9 or 10 – we’ve labeled promoters. The second group, which rates the company 7 or 8, are “passively satisfied.” Detractors, with ratings from 0 to 6, are the third group. A company’s NPS is simply the percentage of promoters minus the percentage of detractors. We’ve found that companies with the leading NPS in an industry usually enjoy superior growth – typically, over 2.5 times the average growth rate of the competition. How can a company raise its NPS? First, by designing the right propositions for the right customers. A vital step is quantifying the average lifetime value of company’s promoters & detractors, factoring in margins, cost efficiency & referrals.

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Source:- IIPM-B&E , Initiative:- Prof. Arindam Chaudhuri - 2006