NPS – the future of modern business

Net Promoter System measures customer satisfaction by asking just one question.

LAHORE: They say the purpose of a business is to create and keep a customer. And today’s business is all about keeping and retaining them. This ‘retention theory’ revolves around measuring and understanding the level of satisfaction; something very crucial for the success of any business.

Global giants like Apple, Philips, American Express, Honda, Amazon and many other organisations have started using the Net Promoter System (NPS) to gauge their performance. This system is relatively new to the Pakistani market and has only been utilised by a few entities.



Organisations have developed different tools to measure customer satisfaction. However, these surveys have always had a long list of questions which eventually irritate customers and do not serve the purpose.

NPS, on the other hand, contains only one question: How likely are you to recommend ABC organisation to a friend or family member on a scale of 0 to 10? This simple question not only gives a holistic picture of the business to the management but it also highlights the core issues of the organisation, especially those which annoy customers and reduce their level of satisfaction.

Unlike other satisfaction surveys, the NPS questionnaire neither gets on the nerves of customers who get a call after making the latest transaction with the company, nor does it push the surveyors to seek for maximum numbers. It actually relies on customers as a whole.

How NPS helps customers

In a survey call, if a customer gives a score of less than 6, he is considered to be a “detractor” of the company. If he gives 7 or 8, he is rated as a “neutral or passive” customer. However, if the customer is highly satisfied and is a “promoter” in its true sense, he gives a 9 or 10 score to the company.

Surveyors have to ask customers about the reasons of giving low scores which they mention in their reports and share with all the stakeholders. They send continuous feedback to front- and back-end offices. If the issue persists, then all the stakeholders get repeated feedback with regular intervals until the issue is resolved.

Identification and solution to issues

Organisations are keen to learn and improve the issues which are turning their customers from promoters to detractors or passives. The surveyors then send a detailed feedback to the departments concerned so that they could take corrective measures.

The departments look at their processes, systems and even employees as to how each of them should be improved. Any error found in the entire sale process is solved with its corresponding department.

Meanwhile, to avoid any blame game, NPS divides feedback into two sections – the inner circle and the outer circle. Inner circle focuses on the controllable factors of the department that receives feedback and outer circle deals with the areas that need to be addressed by other departments.

It is paramount to understand that none of the issues remain unattended. Unresolved matters not only affect organisation’s repute but they also hurt employee performance.

Relative NPS gives a clear picture of the industry as to how the organisation is performing amongst its competitors. Entities can always make a plan to beat their rivals by improving their NPS scores. This competition encourages innovation in products, reflecting on weak areas and improving them. Above all, it gives a lot of options to the customers.

A distinction in profits

According to the NPS, good profits are the ones that earn money for the organisation and add value to the customer’s life. And bad profits are those that earn money for the organisation but annoys customers such as overcharging them, having hidden charges or under-delivering services the organisation has committed with the customers.

Good profits may look like costs but sustained customers provide loyalty, which can then result in sales through further references.

Another aspect of the system, the employee NPS, deals with internal customers (employees) exactly the same way as it deals with the external customers. It talks about internal processes, policies, attitude of bosses, and above all, if the employee recommends his organisation, its products and the bosses to his friends or family to work with.

This internal survey helps an entity improve internal processes which leads to employee satisfaction and ultimately results in customer satisfaction.

Unlike different reports that the employees share internally and help them play the blame game, NPS categorically defines who is to improve and where. No one can deny the importance of the ‘word of mouth’ and NPS is the best way to quantify the quality. As soon as the entities implement NPS successfully, they are sure to reach the summit.

The writer is a corporate training specialist 

Published in The Express Tribune, December 29^th,  2014.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.