Using NPS to Promote Internal Improvements and Decrease Detractors

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Metrics & Measurement
Customer Experience
Parents always tell their children to disregard what others think--to march to the beat of their own drum. But for businesses across the board, from fledglings to old timers, consideration of how others perceive the company's products and services can mean the difference between success and failure. One way many companies are getting insight into that perception is by asking how likely customers are to refer friends or associates.

Parents always tell their children to disregard what others think--to march to the beat of their own drum. But for businesses across the board, from fledglings to old timers, consideration of how others perceive the company's products and services can mean the difference between success and failure. One way many companies are getting insight into that perception is by asking how likely customers are to refer friends or associates.In its 2012 Net Promoter Benchmark study, Satmetrix examines that likelihood, via Net Promoter Scores (NPS), for more than 200 brands across 22 industries to provide businesses, based on the input of more than 30,000 participating U.S. consumers.

"Companies with a higher NPS--a better ratio of promoters to detractors--tend to grow faster than competitors with a lower score," says Deborah Eastman, general manager of consulting at Satmetrix. "This is fairly intuitive, because not only are loyal customers more likely to purchase again, they're more likely to increase their spending over time and refer that brand to others."

USAA's direct banking operation not only led the banking sector, but also topped all other recorded brands with an NPS of 83 percent. Amazon.com ranked highest in online shopping websites, with an NPS of 76 percent, also making it the second-highest ranked brand profiled. Apple continues to please with an NPS of 71 percent, putting its loyalty performance right in line with its enduring financial performance. Other consumer favorites, such as Virgin America, Costco, and Trader Joe's round out the top of the list; Internet provider Mediacom trailed behind all other brands with an NPS of negative 21 percent.

Industry leaders across select industries:
Industry Leading Company NPS
Auto glass repair Safelite 48%
Auto insurance USAA 74%
Cellular Services U.S. Cellular 38%
Drug store/Pharmacy Walmart 40%
Grocery (tie) Trader Joe's 73%
Grocery (tie) Wegman's 73%
Home improvement Lowe's 71%
Home insurance USAA 71%
Internet service provider Verizon 37%
Online services Google 56%
Travel & hospitality Virgin America 66%
Technology Apple 71%
Telecommunications Verizon 18%

"Knowing a company's NPS is only the beginning," Eastman says. "Once a company knows where it stands relative to key competitors, it must capitalize on the opportunity to improve the customer experience by taking action."

By asking customers why they would or wouldn't recommend a company and its products and services, businesses can then begin to pinpoint specific opportunities for improvement, and then make those changes based on what will make the greatest impact on both customer loyalty and business performance.

"The biggest recommendation I can give is to create an organizational discipline that engages the entire company in improving the customer experience," Eastman adds. "Executives have to champion the effort, and it's critical to have effective feedback applications that empower customer-focused decisions as part of the day-to-day business cadence. The most effective [approach] includes real-time customer engagement and detractor follow-up, processes to empower promoters to share their opinions through social media, and robust analytics to generate insights for strategic decisions."

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