Report: Economics of Net Promoter Score, 2016
June 21, 2016 2 Comments
We just published a Temkin Group report, Economics of Net Promoter, 2016. 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 294 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 companies, more than seven times as likely to forgive companies if they make a mistake, and almost nine times as likely to try new offerings from companies. Our research also shows that promoters recommend a company to an average of 3.5 people. The following analysis provides detailed loyalty data of 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, supermarkets, TV service providers, utilities, and wireless carriers. 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.
Here’s one of the 12 graphics in the report, which shows the average loyalty differences for promoters, passives, and detractors across all industries:
The report provides this loyalty data for promoters, passives, and detractors for 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.
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 291 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.
About Bruce Temkin, CCXP
Customer Experience Matters® 
Hey,
The full report sounds very interesting, but I can’t help but feel that the bottom line in this blog post is painfully obvious (as well as the graph) – am I missing something here?
Marius: Fair question. There are many people who doubt that NPS actually segments loyal customers, so what’s obvious for one person may not be obvious for others. I think this research is not necessarily about being counter-intuitive as much as it is about providing large-scale quantification. So even if someone thought the data would show the direction that it has, they would get additional insights by seeing the magnitude of the numbers. Thanks for commenting.