This key metric can help you measure customer loyalty.
May 29, 2024
Yaroslav Danylchenko/Stocksy
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How much value are your customers getting from your products? Net Promoter Scores are one tool to answer that question but the authors offer another: Customer Surplus Value. The idea, drawn from economics, is to ask customers how much money they’d need to be given to give up your product for a period of time. The more money it would take for them to accept, the more valuable the product. An experiment at LinkedIn shows how this measure complements NPS scores as a way of measuring customer satisfaction.
In the realm of customer feedback metrics, few have garnered as much attention and adoption as the Net Promoter Score (NPS). Introduced two decades ago by Frederick Reichheld in his seminal Harvard Business Review article, “The One Number You Need to Grow,” NPS emerged as a revolutionary approach to capturing and predicting company growth. Heralded for its simplicity — a single question that gauges the likelihood of customers to recommend a product or service to others — it became an instrumental tool for businesses to measure customer feedback. Companies across sectors and regions adopted the metric, finding correlations between high NPS scores and enhanced profitability, retention, and growth.
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Felix Eggers is Professor of Marketing at Copenhagen Business School.
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Marco Vriens is founder and CEO of Kwantum, a brand insights and strategy consultancy.
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Jason S. Talwar is the Principal of Strategic Insights at NewtonX, and an Adjunct Capstone Advisor at Brown University School of Engineering.
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Avinash Collis is an Assistant Professor at the Heinz College of Information Systems and Public Policy at Carnegie Mellon University.
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New!
HBR Learning
Customer Focus Course
Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Customer Focus. Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
Learn how to keep your customers—and their most important needs—front and center.
