# Net Promoter Score for Higher Customer Retention Essay (Critical Writing)

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Updated: Apr 27th, 2021

## NPS

What is Ty-D-Home’s Net Promoter Score (NPS)?

In calculating the Net Promoter Score (NPS) of Ty-D-Home, one requires the percentage of clients that gave a response of nine, those who gave a response often (these are termed as promoters), and the percentage of clients who gave a response of zero to six (these are termed as detractors). In getting the NPS, the fraction of detractors is deducted from the fraction of promoters. The following is the computation of NPS for Ty-D-Home (Graham, 2010, p. 6).

Percentage of promoyers = Total number of promoters/ Total number of respondents *100

(198+119)/ 704*100 = 45%

Percentage of detractors = Total number of promoters/ Total number of respondents *100

Percentage of detractors = (38+10+13+72+47)/ 704 * 100

205/704*100 = 29%

Net Promoter Score= percentage of promoters-percentage of detractors = (45-29) % = 16%

Is this good, Bad, or Average?

Comparing this score with the score of companies that have the greatest enthusiastic customer referrals would lead to an excellent position of telling if the NPS for Ty-D-Home was good, bad, or average. Given that companies like eBay and Amazon obtain an NPS of 75 percent to over 80 percent even though they are in a different line of operation, it is clear that the NPS of Ty-D-Home is bad. This element could be partly attributed to the fact that there was only a 32 percent response rate. Perhaps, if the response rate were much higher, the NPS would as well be higher. For companies to attain first-rate loyalty, in addition to the growth and profitability that accompanies it, a score of 75 percent and above must be the target (Graham, 2010, p. 6).

What further follow-up research (new, more-in-depth forms of research) should Alexander undertake with these customers?

The capacity to evaluate the success of Ty-D-Home rapidly with NPS is helpful, as it will let Alexander know whether he has to make any changes. Nevertheless, an NPS alone is not sufficient to tell Alexander what changes he needs to make. The NPS has turned into being a fashionable client loyalty metric. Nevertheless, follow-up research is vital to assist in detecting the problems of Ty-D-Home inadequate details and to act as a guide to bring about the betterment of the company. A customer satisfaction survey is necessary as follow-up research to assist in understanding the neutrality of customers and the areas that they are not satisfied with the operations of Ty-D-Home. This aspect would help in identifying what the customers view as critical to their satisfaction (Salini & Kenett, 2009, p. 1177). By knowing the demands, desires, and anticipations of clients, Alexander will have the capacity to boost the satisfaction of the customers to guarantee their retention. Most significantly, an excellently executed customer satisfaction survey will equip Ty-D-Home with the suitable knowledge required to make sure that the competitors do not take the hard-acquired clients.

Most successful businesspersons understand that the satisfaction of customers is vital to the existence of their companies and Alexander could apply it as well. Alexander can choose among different manners of inquiring from clients and finding why they might not be satisfied with the operations of Ty-D-Home, their products, or the services they obtain. The best method that Alexander should employ is the face-to-face interview, as he will have the chance of meeting the customers in person. Other methods that Alexander could apply are phone calls, questionnaires, email, and surveys over the internet. In face-to-face interviews, there is the direct personal interaction that creates the utmost degree of qualitative and quantitative client association (Salini & Kenett, 2009, p. 1184). Apart from inquiring concerning the quality of work, Alexander should also have an inquiry concerning the areas of operation in which to improve. He could as well ask the customers if the completion of a task is normally on time, or late.

How might Alexander use the information gleaned from this process to increase his customer retention rates?

On a useful level, Alexander could use the information from both NPS and customer satisfaction surveys to convert detractors into promoters as a chief section of this process. Detractors will normally give an in-depth actionable response that would permit Alexander to tackle the problems directly and consistently to bring about a more satisfied client or promoter out of a detractor. Effective customer satisfaction survey will go a long way in boosting the retention of the present clients and assist Ty-D-Home to position itself excellently amid potential customers. Improving on the tie of completing tasks could require Alexander to adjust the business process. Moreover, this aspect could oblige a change in the kind of information that the customers obtain concerning the period or dates if the clients are aggravated with delays (Yim, Tse, & Chan, 2008, p. 741). When the detractors find that Alexander cares enough to want to know the things they like and detest concerning Ty-D-Home and find a subsequent improvement, they are likely to feel satisfied, thus lead to a high repeat business rate. Additionally, if Alexander obtains convincing complaints from customers, meeting them to give an apology and compensation, and clarify established changes, which could assist in increasing his customer retention rates.

## Reference List

Graham, J. (2010). Critical thinking in consumer behavior: Cases and experiential exercises. Boston, MA: Prentice Hall.

Salini, S., & Kenett, S. (2009). Bayesian networks of customer satisfaction survey data. Journal of Applied Statistics, 36(11), 1177-1189.

Yim, K., Tse, D., & Chan, K. (2008). Strengthening customer loyalty through intimacy and passion: roles of customer-firm affection and customer-staff relationships in services. Journal of Marketing Research, 45(6), 741-756.

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IvyPanda. 2021. "Net Promoter Score for Higher Customer Retention." April 27, 2021. https://ivypanda.com/essays/net-promoter-score-for-higher-customer-retention/.

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IvyPanda. (2021) 'Net Promoter Score for Higher Customer Retention'. 27 April.