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Net Promoter Score

What is the probability of existing customers referring the product to potential customers? This is the million dollar question which every CEO and Product owner want to know the answer. The net promoter score (NPS) helps to monitor and control stakeholder satisfaction levels. If a product or service creates lots of happy customers it is really good. If those happy customers start referring the product or service to new potential customers, then it is even better.

NPS is a good indicator of the likelihood of new customer creation through referrals. Net Promoter Score is also an indication of stakeholder management and stakeholder engagement. If all the key stakeholders are extremely happy about the project, that is good for the project.

How to calculate the Net Promoter Score?

It is very simple.

  • Conduct a survey with the question 'Will you recommend this product / service to others?'
  • Here is the scale;
    • Promoter score 9 - 10 are loyal enthusiasts (Promoters)
    • Promoter score 7 - 8 are satisfied but not that enthusiastic customers (fence sitters)
    • Those giving a score between 0 - 6 are unhappy customers (detractors)

Net Promoter Score (NPS) = % of promoters - % of detractors

NPS can be within the range -100 to +100

If all customers are unhappy, NPS will be -100 and at the same time if all customers are promoters then NPS will be +100.

Application of Net Promoter Score in Stakeholder management

From the project management context, stakeholders are the ones, who is affected positively or negatively by doing or by delaying a project. Project stakeholders can be further classified into four segments, based on their power and interest.

It is very important to manage the powerful stakeholders and the ones who have lot of interest in the project outcomes. Maintaining a high NPS of all the key stakeholders must be the top priority of the project manager and the project management team. Mood chart also represents the moods of stakeholders with respect to the product or service delivered by the project.

Application of NPS in product release strategy

In his book 'crossing the chasm', Geoffrey More classifies the user groups into;

  • Innovators
  • Early adopters
  • Early majority
  • Laggards

High NPS from the innovators captures early adopters. The early adopters net promoter score determines determines the early majority, and the laggards follow suit.