Report: Economics of Net Promoter, 2015

June 16, 2015 Leave a comment

1506_Economics of Net Promoter_COVERWe just published a Temkin Group report, Economics of Net Promoter, 2015. Here’s the executive summary:

Net Promoter® Score (NPS®) is a popular metric that companies use to analyze their customer experience efforts, but how does it actually relate to loyalty? We asked thousands of consumers to give an NPS to 293 companies across 20 industries, and then we examined the connection between NPS and four key areas of loyalty. We found that compared to detractors, promoters are more than five times as likely to repurchase from a company, more than five times as likely to forgive a company if it makes a mistake, more than seven times as likely to try a new offering shortly after its introduction, and that they recommend the company to about four times as many people. This analysis examines the loyalty behaviors of promoters, passives, and detractors across 20 industries: airlines, appliance makers, auto dealers, banks, rental car agencies, computer and tablet makers, credit card issuers, fast food chains, health plans, hotel chains, insurance carriers, Internet service providers, investment firms, parcel delivery services, retailers, software firms, supermarkets, TV service providers, utilities, and wireless carriers. The percentage of promoters who are likely to repurchase ranges from 96% for retailers, fast food chains, and supermarkets down to 77% for airlines, while the percentage of those who are likely to forgive ranges from 72% for computers & tablets, utilities, and supermarkets down to 51% for airlines. Meanwhile, the percentage of those who are likely to try new offerings ranges from 70% for major appliances and software firms down to 52% for banks. Ultimately, if a company wants to benefit from using NPS as a key metric, it must focus on improving customer experience, not obsessing over the metric itself.

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Here’s an excerpt from one of the 12 graphics, which shows the loyalty differences for promoters, passives, and detractors across all industries:

1506_ValueOfPromotersDetractors

The report provides loyalty data for promoters, passives, and detractors across 20 industries: airlines, auto dealers, banks, computer and tablet makers, credit card issuers, fast food chains, health plans, hotel chains, insurance carriers, Internet service providers, investment firms, major appliance makers, parcel delivery services, rental car agencies, retailers, software firms, supermarket chains, TV service providers, utilities, and wireless carriers.

Download report for $295
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See our VoC/NPS resource page, which includes great resources for creating a successful NPS program. You mat also want to see our latest NPS Benchmark Report with NPS data on 283 companies.

The bottom line: Promoters are much more valuable than detractors.

Net Promoter Score, Net Promoter, and NPS are registered trademarks of Bain & Company, Satmetrix Systems, and Fred Reichheld.

Filed under Bruce Temkin Research, Business impact, CCXP2 Voice of the Customer, Customer Insight, and Understanding, CCXP6 Metrics, Measurement, and ROI, Customer experience, ROI of Customer Experience, Temkin Group Research

About Bruce Temkin, CCXP
I'm an experience (XM) management catalyst; helping organizations improve results by engaging the hearts and minds of their employees, customers, and partners. I enjoy researching and speaking about these topics. I lead the Qualtrics XM Institute, which is the world's best job. We're igniting a global community of XM Professionals who are inspired and empowered to radically improve the human experience. To achieve this goal, my team focuses on thought leadership, training, and community building. My work is driven by a set of fundamental beliefs: 1) Everything starts and ends with human beings, so you need to understand how people think, feel, and behave; 2) XM is a discipline that needs to be woven throughout an organization's entire operating fabric; and 3) Building the XM discipline requires a combination of culture, competency, and technology.

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