Net Promoter Score Linked to Customer Loyalty According to New Temkin Group Research

WABAN, Mass., May 21, 2013 /PRNewswire/ -- Companies often use a metric called Net Promoter Score^® (NPS^®) as a measure of customer affinity. NPS is based on asking customers how likely they are to recommend a company to a friend or relative. In a new report called The Economics of Net Promoter, Temkin Group analyzes NPS and loyalty across 19 industries based on feedback from 10,000 U.S. consumers. The research shows that consumers are more likely to repurchase and forgive companies that receive higher NPS scores.

NPS characterizes respondents as Promoters when they are very likely to recommend and Detractors when they are very unlikely to recommend. It turns out that 81% of Promoters are very likely to repurchase from the company in the future and 64% are very likely to forgive the company if it makes a mistake. For Detractors, those numbers are 16% and 24%, respectively.

Promoters who are likely to repurchase range from 87% for grocery chains to 73% for TV service providers, those who are likely to forgive range from 72% for rental car agencies to 59% for TV service providers, and those who actually recommended a company range from 80% for retailers to 47% for parcel delivery services.

"NPS is directionally aligned with loyalty, but the results show some unusual patterns that should be considered when using NPS," states Bruce Temkin, Managing Partner of Temkin Group.

NPS offers consumers the option to respond from "0" (unlikely to recommend) to "10" (extremely likely to recommend). The research examined patterns across this scale.

• NPS categorizes Detractors as those who answer "0" to "6." The research shows that forgiveness and repurchase loyalty stay at a consistently low level between 0 and 4 on the scale.
• While NPS categorizes Promoters as those who answer "9" or "10," loyalty appears to increase consistently starting from either "6" or "7."
• Consumers select three responses disproportionally high "0," "5," and "10." These options often carry text descriptions (called "anchors") in many NPS implementations.

The analysis covers the following 19 industries: Airlines, appliance makers, auto dealers, banks, car rental agencies, computer makers, credit card issuers, fast food chains, grocery chains, health plans, hotel chains, insurance carriers, Internet service providers, investment firms, parcel delivery services, retailers, software firms, TV service providers, and wireless carriers.

This results can be accessed from the blog, Customer Experience Matters, at ExperienceMatters.wordpress.com as well as from the Temkin Group website, www.TemkinGroup.com.

For more information about Temkin Group, visit www.TemkinGroup.com.

About Temkin Group: Temkin Group is widely recognized as a leading customer experience research and consulting firm. Many of the world's largest brands rely on its insights and advice to steer their transformational journeys. Temkin Group combines customer experience thought leadership with a deep understanding of the dynamics of organizations to help accelerate results. Rather than layering on cosmetic changes, Temkin Group helps companies embed practices within their culture by building four critical competencies: Purposeful Leadership, Employee Engagement, Compelling Brand Values, and Customer Connectedness. The firm's ongoing research identifies leading and emerging best practices across a wide range of activities for engaging the hearts and minds of customers, employees, and partners. For more information, contact Bruce Temkin at 617-916-2075 or send an email to Email.

About Bruce Temkin: Bruce Temkin is widely recognized as a customer experience thought leader and is Customer Experience Transformist and Managing Partner of Temkin Group. He is also the author of a very popular blog, Customer Experience Matters® (ExperienceMatters.wordpress.com). Prior to forming Temkin Group, he was a VP at Forrester Research for 12 years. Bruce is a highly demanded speaker who consistently receives high marks for his content-rich, entertaining keynote addresses. He is also the co-founder and Chair of the Customer Experience Professionals Association (CXPA.org), a global non-profit organization dedicated to the advancement of customer experience management.

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

Customer experience matters is a registered trademark of Temkin Group.

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SOURCE Temkin Group