The Net Promoter Score, NPS, Model

"Net Promoter Score is a management tool that can be used to gauge the loyalty of a firm's customer relationships. It serves as an alternative to traditional customer satisfaction research and is claimed to be correlated with revenue growth".

The traditional net promoter score, NPS, model calls for a survey that consists of one question that asks “How likely are you to recommend this club to a friend or colleague?” followed by an open-ended why type question.

MXM builds on this methodology by using an applied model. Specifically, by focusing on this Likelihood to Recommend (LTR) question and by asking a series of key driver follow-up questions, such as gym cleanliness, staff friendliness, and overall gym satisfaction.

The LTR ratings are grouped into the following NPS segments:

PROMOTERS

Rated their LTR a 9 or 10 on a 0 to 10-point scale. They are enthusiastically loyal, usually spend more, and are actively urging their friends to join your club. Thank these members regularly for their business; listen to, and act on, their needs. These are the easiest members to retain!

PASSIVES

Rated their LTR a 7 or 8 on a 0 to 10-point scale. They are satisfied but are at risk of being swept away by better offers. Engage with these members, thank them for their business, and try to understand what’s missing. Use your feedback response to migrate passives into Promoters.

DETRACTORS

Rated their LTR anywhere from 0 to 6 on a 0 to 10-point scale. They are not satisfied and are typically the ones who are bad-mouthing your club. They are bad for business because their voices are often heard louder than those of Promoters. Follow up with these customers to determine the best course of action.

NPS is calculated by subtracting the % Detractors from the % Promoters. A negative NPS means that you have more members who would not refer your club than members who would refer.