$78,645. Why Is This Number Important?

Aug 25, 2023ERE.net
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Measuring the success of a business today requires more than just a look at its finances. A new way of analyzing performance has come to the fore – the Net Promoter Score (NPS). This metric describes how likely a customer is to recommend a company’s products or services to others. It's become a commonly used tool in industries ranging from insurance to healthcare, and has even been applied to analyze the performances of universities. To calculate the NPS, a company surveys its customers with a single question: How likely are you to recommend our company/product/service to a friend or colleague? Respondents answer on a 0 to 10 scale. Those who answer 9 or 10 are considered "promoters;" those answering 7 or 8 "passives;" and 0 to 6 “detractors.” The NPS is the difference between the percentage of promoters and detractors. A higher score indicates higher customer loyalty and satisfaction. A strong NPS is seen as the key to sustainable growth, creating loyalty to your company and brand, and improved customer retention.