On a Scale of 0 to 10..

You may have already seen this question thousands of time. On a Scale of 0 to 10, would you recommend your friends or family to us at XXXXXXX.

This question is the one customer survey question that can strongly predict if your customers will buy from you again, or leave you for greener pastures.

It’s simple to calculate. You take the % of people who answered a 9 or 10 (Promoters) and subtract the Percentage of people who answered 0 to 6 (Detractors). That provides your “NPS” score which allows you measure yourself against any other company’s NPS, in any industry, and any size.

It’s pretty universal and often looked at in acquisitions, because a buyer wants to know if you have a decent book of customers who will stick around, or you’re constantly replacing them like Henry VIII did with his wives.
(incidentally his marital NPS was pretty brutal..).

Now here is some math to consider:

An NPS Promoter score has a customer lifetime value that’s 600%-1,400% higher than a Detractor. (Bain & Company)

Think of your business.

Imagine just by providing excellent service you can get every customer to stay longer and spend 6 – 14x more.

For example, Company A has 1,000 customers who spend $1,000 each in a year for $1 million sales. Customer service is good but not exceptional. All 7s and 8s.

The company invests in exceptional service so 10% of the customers become 9s and 10s.

The Net Promoters spend 6-14x more so let’s assume 10x.
So 900 customers spend $1,000 and 100 customers spend $10,000

The annual revenue has just nearly doubled to $1.9 million.

This is why we have been talking all week about the purpose of business: “To create customers who create customers.”

To finish, here is some more math about the superior investment in retention

• Increasing customer retention rates by just 5% can increase profits by between 25% and 95%. (Bain and Company)
• Investing in new customers is between 5 and 25 times more expensive than retaining existing ones. (Invesp)
• It takes 12 positive customer experiences to make up for one negative experience. (Ruby Newell-Legner’s “Understanding Customers”)
• 68% of consumers say they are willing to pay more for products and services from a brand known to offer good customer service experiences. (HubSpot)

Thinking about this principle of customers creating customers.

What do you think that will do for your bottom line?

How about the cash you can take home?