Concept explainers
Interpretation: The net promoter scoresthose measures the probability that a customer recommends a company is to be discussed.
Concept Introduction: Net promoter score is a management tool used to assess the loyalty of a customer towards a company. It depends upon the customers experience with the firm’s product or service.
Answer to Problem 1DQ
A firm would be rated a high NPS and would be recommended to others based on the consistent quality of the product and service that gives a pleasant experience to the customer every time.
Explanation of Solution
The NPS is widely used tool as an alternative to customer satisfaction. A low score of -100 denotes all respondents are detractors while the highest score of +100 denotes the entire sample as promoters. It was developed by Mr. F.R in 2003 and assumes that potential customers are influenced by word of mouth from experienced users.
For example, consider a restaurant. The NPS may be used to find the probability that a customer would recommend it to his family and friends.
The following factors would make an impact a high net promoter score:
- Consistent food quality and taste
- Reasonable pricing
- Convenient location and timing
- Maintenance of hygiene
- High quality customer service
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Chapter 16 Solutions
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