NPS concept understanding
Have you ever liked a company so much that you’ve told your friends about it?
The Net Promoter Score system uses one basic question to measure customer loyalty:
“How likely is it that you would recommend our organisation to a friend or colleague?”
There are many formulae to understand customer’s opinions, such as the Customer Satisfaction Score (CSAT) system, but the NPS system is intended to go beyond testing how satisfied a customer is with a company: it’s designed to test whether someone likes a brand enough to recommend it to others.
In other words, the person isn’t merely “satisfied” with the company – by telling others about the brand, the person is effectively marketing the company’s services.
Although there are pros and cons to NPS, numerous research studies have shown that the NPS system also correlates with business growth.
Studies by the Harvard Business Review have found that companies…
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