Net Promoter® Score (NPS®) has become a popular customer experience metric. NPS classifies customers into one of three categories—promoters, passives, and detractors—based on their likelihood to recommend the company to friends and colleagues.
This research found a very strong connection between NPS and customer loyalty across 20 industries. An examination of 291 companies in the study found that NPS was highly correlated to the likelihood of a customer to purchase more from a company (R = 0.81).
When compared with detractors (customers who are unlikely to recommend the company), the research shows that promoters (customers who are highly likely to recommend the company) 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.
"Promoters are significantly more loyal, so most businesses would do well to create promoters and decrease detractors," states Bruce Temkin, Managing Partner of Temkin Group.
Here are some additional findings from the research:
The average loyalty of promoters across 20 industries is as follows: 92% are likely to purchase more, 67% are likely to forgive the company if it makes a mistake, and 62% are likely to try a new product.
The average loyalty of detractors across 20 industries is as follows: 18% are likely to purchase more, 9% are likely to forgive the company if it makes a mistake, and 7% are likely to try a new product.
Internet service providers, insurance carriers, and computers have largest gaps between promoters' and detractor's likelihood to purchase.
Utilities and computers have largest gaps between promoters' and detractors' willingness to forgive a company.
Appliances and auto dealers have largest gaps between promoters' and detractors' willingness to try new products.
The report includes loyalty levels for promoters, passives, and detractors across 20 industries: airlines, auto dealers, banks, computer makers, credit card issuers, fast food chains, grocery chains, health plans, hotel chains, insurance carriers, Internet service providers, investment firms, major appliance makers, parcel delivery services, rental car agencies, retailers, software firms, TV service providers, utilities, and wireless carriers.
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.
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 past 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.