Net Promoter study reveals the cost of letting down customers

The just released 2011 Net Promoter Industry Benchmarks study of more than 22,000 US consumers nationwide, found that bad customer experience forced more than one in five of customers to stop doing business with a company during the second half of last year

The study also suggested word-of-mouth endorsements from friends or colleagues are the most trusted form of information when purchasing. So that one bad review online - whether on Facebook, Yelp or any number of electronic sounding boards portal -  may be helpful in fixing some customer service problems, but  is also inflicting untold damage on sales.

“Having a great customer experience is critical to a company’s financial performance because it impacts both customer retention and new customer acquisition through word of mouth,” said John Abraham, general manager of Net Promoter programmes at Satmetrix.
“These benchmarks allow companies to compare their performance to industry peers based on an industry-standard measure of customer loyalty. But the big challenge for most companies is to figure out how to use customer feedback to drive improvements in their customer experience. Measuring is just the first step.”

The Satmetrix study gauges customer experience and bottom line impacts on the insurance, financial services, airlines, telecommunications, technology, retail and online services industries. This year’s winners included well-known brands such as USAA, JetBlue Airways, Symantec, Trader Joe’s, Vanguard, Amazon.com, Apple, Google, Costco and American Express.

A company’s Net Promoter Score, or NPS, is based on customers’ likelihood to recommend the company. NPS is calculated as the percentage of customers who are Promoters, rating the company 9 or 10 on a zero-to-ten point scale, minus the percentage who are Detractors, rating 6 or lower. Consumers also rated each company on various aspects of customer experience, including product or service features, customer service and overall value, allowing Satmetrix to analyse drivers of loyalty and performance gaps for each company.