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NPS and Why It Matters

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Building on Don's blog post from Monday where he detailed ShoreTel’s success in the first year of our Net Promoter Score (NPS) program, I thought I should step back and explain what NPS is and, more importantly, why it matters.

Why NPS?

Customer feedback is the secret sauce that helps every company continually review and improve their products and services. These days, customers have more options than ever to provide feedback to vendors, including Twitter and Facebook, blogs, a company’s website, a partner or reseller network, or a formal customer satisfaction survey. This feedback mechanism is one of the most important but often overlooked aspects of the business cycle.

But the best companies do this right. They don’t just gather feedback; they act on it, transforming transactions into relationships. This is the critical difference between measuring customer satisfaction and building customer loyalty. A loyal customer will recommend products to their peers. This is what we strive to achieve at ShoreTel.

And this is where NPS comes in. NPS goes beyond traditional customer satisfaction surveys to actually measure customer loyalty. It’s an industry-standard methodology that benchmarks customer experiences and brand loyalty. This data can be correlated with future buying behavior and revenue. As a result, NPS is an invaluable tool for any company looking to transform customer loyalty into revenue.

How it works

In the NPS program, we ask a single, simple question: “Would you recommend us to a friend or colleague?” Additional questions can obtain more details behind a customer’s rating, including product quality, ease of use, delivery/installation, service/support, billing, etc. All the factors that contribute to a customer’s experience with a particular company or product.

Based on these answers, customers are divided into three categories: detractors, passives and promoters. A score of -100 means everyone is a detractor. A score of 100 means everyone is a promoter. An NPS of 50 is generally accepted as “world class.”

This is why ShoreTel is so proud of our NPS of 62. And we’re equally impressed with our resellers’ NPS of 64. Since resellers are critical to our customers’ overall experience with ShoreTel, we make a point of measuring our partners’ NPS. The scores make it clear that customers are extremely loyal to both ShoreTel and our partners. Exactly what we work towards each and every day.

NPS has given ShoreTel a wealth of data that we apply to building better customer experiences. Continual improvement is a driving force for all of us at ShoreTel and throughout our partner network. I am excited to see what we achieve together in the second year of our NPS program.