Why does the Net Promoter Score show growing customer loyalty, but this does not correlate well with your company's revenue growth?
It's all about the imperfection of the NPS, and in addition to it, you need to consider one primary indicator of your faithful adherents.
On a simple data model, we showed how Tableau could implement the calculation and visualization of this metric. Check out what we got on Tableau Public!
In the traditional NPS survey, customers are asked how likely they are to recommend the company on a scale of 1-10 after an experience. Those who give scores of 9 or 10 are considered Promoters. Those who present scores of 7 or 8 are Passives, and those who score under 6 are Detractors. To calculate the NPS score, add up the total responses. Then take the total for each group and divide it by the total number of survey responses to get the percentage. Subtract the percentage of Detractors from the portion of the Promoters to obtain the NPS score. The system has gained the highest popularity!
Now we have a tool for obtaining reliable data on customer loyalty. Let's add to the emotions of the NPS metric calculation of the growth of our referrals. The ideology of the Earned Growth Rate is based on the value of the attracted clients (referrals) as the one that brings the most income now and in the future.
Our Data Model consists of 3 tables, where "Sales by Customer" is the root table, "Customer Acquisition Channels" and "Customer NPS" are related tables.
Relationships are established between tables and defined by the "Customer Name" matching field.
How do I calculate the revenue generated from ENC?