True Measures: Reichheld Edition

May 19, 2009

Fred Reichheld is famous in business circles for his Net Promoter Score, which is one of those simple, but effective things in life.

To calculate the Net Promoter Score, ask your customers if they would recommend you to someone else.  The higher the portion of those that say yes, the higher your net promoter score.

Asking if a customer would recommend you to a friend cuts to the truth.   Simply asking the customer if they’re satisfied isn’t enough.  Many businesses have satisfied me, but their competitors did more.

Asking if they would recommend you to friend, adds an effective thought process to their answer.  It causes the customer to consider whether they’d stake their good reputation on you.

Of course, many might answer that they would recommend you and never do it.  So the truest measure is whether customers actually do recommend your business to their friends.  If you measure up on that, you may be too busy serving customers to ask Reichheld’s question.

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