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Survey and data company Qualtrics is releasing a “Net Promoter Score” wizard that should help companies quickly and easily determine how they rank compared to competitors in organic viralness and word-of-mouth.
That one measure, according to enterprise-consulting giant Bain, determines most of their success.
“NPS is one single metric that determines whether your customers are engaged and happy with you,” says Qualtrics CEO Ryan Smith, who started the company 10 years ago in his basement and is now onboarding 500-600 enterprise customers a quarter. “This is a major indicator to whether you’re going to be successful … that’s what promotes virality, and it shows early on.”
Net promoter score is an invention of Bain & Company, which not only consults but also advises private equity clients on buying and selling businesses. NPS is one of the key tools Bain uses to help its private equity clients gauge the value of potential investments, Qualtrics spokesman Kylan Lundeen told me. After extensive research into “millions” of variables, Bain found that the only statistically reliable factor determining the upward or downward trajectory of a company was this single question:
“How likely are you to recommend this company to your friends?”
Ian Cleary recently published
How to dramatically increase revenue with marketing automation tools on VB Insight.
The new NPS wizard released by Qualtrics today takes what was previously only available to large enterprises engaged in consulting contracts with Bain — and I know from personal experience that those run easily into the seven figures — and makes it available to a business of any size, even a four-person startup.
“Most organizations aren’t really sophisticated enough to have one single metric that the whole company can rally around,” Smith said. “But NPS is one of the true indicators of successful businesses … the NPS leader in an industry will outcompete by roughly two times.”
Smith said the NPS tool in Qualtrics is available via a simple app-store-like market. Companies can select it, purchase it, and be up and running with it in minutes. Qualtrics uses the measure itself, and it’s a key part of how the company not just acts, but also becomes.
“We’re not about customer satisfaction,” Smith says. “We’re about our company becoming customer-centric.”
Qualtrics is the world’s leading enterprise survey technology provider. Qualtrics makes it easy to capture real-time customer, market and employee insights that inform data-driven business decisions. Enterprises, academic institution... read more »
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