Jeffrey R. Immelt, chairman and CEO of General Electric Company, recently announced the extraordinary goal of boosting GE’s organic growth rate from 5% a year to 8% — a 60% increase for a company that is already the ninth largest (by revenue) in the world. As part of the strategy for reaching this ambitious target, Immelt has encouraged many of GE’s divisions to apply a simple customer-relationship metric known as “net-promoter score.”1 The ideas behind NPS, which have been around for a couple of years,2 are simple. A company asks its customers just one question — “How likely is it that you would recommend us to a friend or colleague?” — and then scores the results on a zero-to-10 scale with 10 representing “extremely likely” and zero representing “not at all likely.” Customer responses tend to cluster in three groups, each of which is associated with a set of behaviors. One group is made up of customers who give the company a nine or 10 rating. They are known as “promoters” because they behave almost as if they were adjuncts to the organization’s sales force. They report by far the highest repurchase rates, account for more than 80% of referrals and are the source of most of a company’s positive word-of-mouth. A second segment rates the company seven... To read the complete article, login or sign-up using the form below.
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