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What is NPS, and Why Does It Matter?

How can companies achieve greater results through direct customer feedback? What is the financial impact of customer loyalty? Fred Reichheld explains.

According to the Harvard Business Journal, about 80% of companies now use a customer satisfaction measurement to analyze and improve customer experience (CX). A leading independent research firm reports that more than 5,000 organizations worldwide have a dedicated CX leader—with nearly 50% of these individuals reporting directly to the CEO. Most large organizations with revenue of more than $1 billion utilize between 50-200 CX metrics.

Companies use their CX results for many applications, including to gain a better understanding of what motivates, delights, and concerns their customers, as well as for perfunctory matters such as stocking inventory. Name-brand organizations such as Amazon, American Express, Apple, Chick-fil-A, Southwest, and USAA excel at using consumer feedback to enrich the lives of their customers—which is the cornerstone of the Net Promoter® System (NPS), one of the leading CX programs.

Fred Reichheld, the creator of NPS, developed the metric to help companies achieve greater results through direct feedback from their customers. His work in this area quantifies the link between loyalty and profits. As a frequent speaker at major business forums, his views about loyalty have been widely covered in The Wall Street Journal, The New York Times, Financial Times, Fortune, Business Week, and The Economist.

Watch this short video as Fred explains why he created NPS, how it measures customer loyalty, and how your business can benefit from its findings.

After viewing the video, here are some things to consider:

  • Does your business use a rating system like NPS?
  • How effectively is your company evaluating important matters such as customer loyalty or retention?
  • What are the key insights that your organization is trying to understand with your measurement systems?

If you would like to learn more about NPS, check out “The Wrong Way to Use NPS,” also on our blog.

BILT is proud to be featured in Fred’s most recent book, Winning on Purpose: The Unbeatable Strategy of Loving Customers.

Contact us to learn more about how BILT impacts NPS.

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