Why Do Companies Use NPS?

Tony Hsieh, CEO of Zappos – an online shoe and clothing shop – always goes back to his story of the Skechers conference when he wants to demonstrate the importance given to Customer Service by the Zappos customer loyalty team members. It goes like this. Hsieh and some of the Skechers employees went bar hopping in Santa Monica and after a few too many, one of the Skechers team members felt like eating a hot pizza. It was 2 am and when she asked room service to send some up, they refused stating that it was after hours. She then dared Hsieh to call up the Zappos headquarters and help her out since they claimed to have such a high quality customer service. Hsieh put the call centre agent on speaker and the first thing he said was: ‘You know we
What is generated is a score in between -100 and 100 which is calculated as the Net Promoter Score.

Why do companies use NPS?
While most companies look to acquire more customers in order to boost their growth and revenue, they realise that it is important to retain those customers to run a sustainably growing business. In order to do this, they look to make their customers as loyal to the brand as possible. The problem with brand loyalty and customer satisfaction is that they are qualitative metrics which are difficult to measure. Here, NPS becomes the framework that helps assess long-term customer satisfaction and predict brand loyalty.

Benefits of a high net promoter
This can be broken down into four parts given below.

1. Simplicity & reliability
All three companies have spent a great deal of money and effort to highlight their relative simplicity next to their competitors. The biggest initial selling point for Netflix was – a great online entertainment service that saved you time. Amazon has invested a great deal of time and effort in making its sales, shipping, and return processes as simple as possible.

2. Deliver easier faster and better services
Despite having millions of customers, NPS leaders know the importance of customer retention. In this competitive world, promising reliable offers is not enough; services need to be delivered in a tangible time-frame, reduce customer effort and, improve output while keeping the unit economics of the business equitable. The NPS leaders do this by collecting the customer information and storing it in a centralised database. For instance, once you have registered a complaint with Amazon, you don’t have to repeat the problem. The records of the customer complaints are stored in Amazon’s centralised database and can be conveniently accessed by the customer care