Forrester Wave Report
Leslie Stretch, Medallia CEO, and Borge Hald, Medallia Founder, Reflect on Being Named A Leader by Forrester in The Forrester Wave™ Customer Feedback Management Platforms, Q4 2018 Elena:...
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Ten years ago, Fred Reichheld published an article in Harvard Business Review on the “One Number You Need to Grow“. That watershed article introduced the concept of the Net Promoter Score (NPS) to the world: measuring customer loyalty by asking customers how likely they were to recommend (LTR) a business to a friend or family member. The NPS score is calculated by subtracting the percentage of detractors (ranking of 6 or below on a 10 point scale) from the percentage of promoters (who rank 9 or higher on a 10 point scale). Based on these results, companies score from a -100 (everyone is a detractor) through to 100 (everyone is a promoter). The methodology has proved extremely popular and has been widely adopted by businesses around the world.
NPS has grown substantially in the 10 years since it was introduced — from the Net Promoter Score into the Net Promoter System. While it almost seems like a nuance changing the “S” from “score” to “system,” the reality is that this change represents one of the most valuable take-aways from NPS programs: the score by itself is just the starting point. When you take the score, and put it into a system that not only reports on a customer’s likelihood to recommend, but an understanding as to why, the score transforms into a system that in turn can truly transform a business. Rob Markey, Fred’s co-author, recently wrote that “A Net Promoter System is a management philosophy, a way of running a business. Net Promoter companies commit to specific processes and systems that help everyone focus on earning the passionate loyalty of both customers and employees.”
In the beginning, companies adopted NPS as a way of understanding customer loyalty. Today, NPS represents the beginning of a journey. Once you’ve generated a cadence of capturing feedback on your customers’ experience, the companies that find true success in using NPS go much further. They take the feedback and use it to create improvement across their organizations — from the c-suite, through to experience professionals, all the way to the frontline. It becomes an energizing force inside of an organization — driving change in the way an organization thinks about everything from direct customer recovery to building out business processes, products, and services.
We know this, because we have seen first-hand how our customers have used the Net Promoter System to do all of this. It is by far the most popular methodology among our clients, and has proved truly transformative in how they act to embed their own customers across their organizations.
So we hope you’ll join with us in wishing NPS a Happy Birthday!