The article shares an indicator that measures the relationship between users and products or services: NPS. It is full of useful information and I hope it will be beneficial to you.
First introduction to NPS
As user experience practitioners in the Internet industry, we all have more or less contact with it Some indicators that measure the relationship between users and products or services. Common indicators include activity, retention rate, user satisfaction, etc.
In recent years, NPS (Net Promoter Score) has become popular in China. More and more industries and companies have begun to use NPS indicators as a tool to measure user reputation, such as China Mobile in the communications service industry. , Ping An of China in the financial and insurance industry, Tmall and Tencent in the Internet industry, Hisense, a home appliance company, etc. Ping An of China began to introduce NPS evaluation indicators in 2013, and released the company's NPS-related data for the first time in August 2016. After more than two years of NPS construction and implementation, Ping An Group has continued to promote significant improvements in user reputation and various Healthy growth in business indicator data.
NPS is accepted and used by more and more domestic enterprises. It is fundamentally affected by the comprehensive impact of factors such as internal operations and external environment of the enterprise. First of all, increasingly fierce market competition drives companies to transform their growth methods, prompting companies to shift from extensive management to focus on user value, cultivate loyal users, and enhance social reputation. The core of corporate marketing has shifted to consumer reputation and loyalty. s concern.
According to research statistics from CHINA INSIGHT, 75% of Chinese consumers trust recommendations from family and friends when using or purchasing products. Therefore, how to get users to recommend the products they are using or consuming becomes a core issues that businesses care about.
Secondly, drawing on the successful experience of NPS in European and American countries, in recent years, international companies such as Apple, Microsoft, Amazon, and Philips have achieved a win-win situation in terms of market share and revenue through their far-leading NPS levels.
Moreover, with the development of social networks, the effects of leading NPS on enterprises will continue to be amplified. Finally, the continuous improvement of the professionalism and influence of domestic user experience teams has given companies the ability to build and implement NPS systems. The promotion and implementation of NPS systems for many domestic Internet companies are led and responsible for user research teams.
What is NPS
Net Promoter Score (NPS) was first proposed by Fred Reichhardt, founder of Bain & Company’s customer loyalty business. Reichheld first mentioned it in a 2003 Harvard Business Review article, "The Number You Need to Grow."
Reid Reichhard proposed that the Net Promoter Score mainly has the following considerations:
First of all, he believes that NPS is an effective indicator to measure loyalty. By measuring the user's Loyalty can help distinguish between "bad profits" and "good profits" of an enterprise, that is, which profits are obtained at the expense of harming user interests or experience, and which are profits obtained through active cooperation with users. The pursuit of healthy profits and Avoiding bad profits is a key factor for enterprises to win future and long-term interests.
Secondly, compared with other indicators that measure loyalty, there is a very strong correlation between NPS scores and corporate profit growth. As shown in Figure 1, the compound annual growth rate of companies with high NPS scores More than twice as high as ordinary companies. Other indicators such as satisfaction, retention rate and growth rate have a weak correlation and cannot accurately define whether a user uses or purchases a product due to loyalty or other reasons. In addition, the traditional satisfaction model is relatively complex, the cost of understanding is high, and the survey questionnaire is lengthy, resulting in low user willingness to participate.
The NPS model can be simply understood as two main parts. The first part is to classify users based on their answers to a standard question. The usual way to ask this question is:
"How likely are you to recommend us (or this product/service/brand) to a friend or colleague? Please rate from 0 to 10."
The other part is to ask follow-up questions based on the first question: "What is the main reason why you gave this score?" to provide users with a completion process for feedback questions and reasons. Therefore, the core idea of NPS is to classify users according to loyalty and gain an in-depth understanding of the reasons why users recommend or not recommend products, and then encourage companies to take a variety of measures to increase recommenders and reduce detractors as much as possible, thereby winning the goodwill of the company increase.
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