There exist several metrics nowadays to measure the performance of any startup, but one metric above all in terms of importance has to be the NPS (Net Promoter Score). This is because startups are unlikely to have large marketing budgets, but a positive NPS creates a marketing pipeline by generating a positive word-of-mouth. Business intelligence supplied post a study done by Small Business Trends and Verizon, reaffirms that for 85% of small business owners, a positive word-of-mouth becomes the main source for driving sales. NPS calculation is simple as it simply minuses the percentage of detractors from the percentage of promoters. A score of between zero and six is considered poor, seven and eight average, while nine and ten are positive scores. Amazon and Netflix, unsurprisingly lead their respective industries, as per inputs provided by Retently. Companies with higher NPS, tend to be better at customer retention as confirmed through the loyalty shown towards the iPhone. NPS scoring is often done on the basis of some survey questions. These may be fraught with self-selection biases, so it must never be considered the perfect method, as there isn’t any such. To curate the best practices in scoring NPSs, the right vendor or platform has to be identified first. During the research done, the sample size taken must be large enough to support or reject any hypothesis. The structure must be consistent throughout the business research being done. The NPS must also be able to track the changes wrought in between.

Source:https://knowledge.insead.edu/blog/insead-blog/why-meeting-customers-expectations-isnt-enough-9611

Uploaded Date:03 December 2018