Cost Management 6th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 12

Net Promoter Score Upon graduation, you and a friend established a computer-consultancy business. Your business has generally been successful, but you and your colleague wish to expand the business significantly over the next three years. You have always assumed that the service your firm rendered to clients was of sterling quality. However, up to this point you have not attempted to measure customer satisfaction. Recently, you prepared and sent to your clients a customer-satisfaction survey that, among other items, asked the following question: "How likely is it that you would recommend our services to a friend or business associate" Customers responded to this question using a 10-point scale, with 10 = "Extremely Likely," 5 = "Neutral/Uncertain," and 1 = "Extremely Unlikely." You received 290 responses to this question, which were as follows:

Required
1. What is meant by the term net promoter score
2. Given the above data (customer responses), calculate the net promoter score for your consulting firm.
3. Of what strategic importance are nonfinancial customer performance measures in general and the net promoter score in particular