CAOT 31 Lecture Notes - Lecture 6: Fred Reichheld, Mobile Device, Root Mean Square
3 Oct 2020
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Reichheld (2003); the one number you need to grow. A single question about the willingness to recommend a product/service to someone else serves as a useful predictor of growth. The percentage of customers that are detractors is then subtracted from the percentage that are promoters to arrive at the company"s nps: def. They collected a lot of data and hoped to find at least one question for each industry that effectively predicted behaviors, which can drive growth. There was one question which was best for most industries (11 out of 14 cases): How likely is it that you would recommend company x to a friend or colleague? . As they have now found the right question, they needed to develop a scale to score the responses. They decided for a scale from 0-10, where 10 means extremely likely to recommend, 5 means neutral and 0 means not at all likely .
