NPS benchmarks loyalty in four markets

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By: Wise Marketer Staff |

Posted on April 17, 2008

NPS benchmarks loyalty in four markets

Satmetrix has published a series of benchmark reports covering the financial services, telecommunications, technology, and online services sectors, in which the Net Promoter Score (NPS) for is measured and compared for various products and services, revealing market leaders with the highest customer loyalty and organic growth potential.

Loyalty leaders include established brands such as Wachovia, American Express, Google, Apple, and Adobe Systems, as well as innovators in established markets such as Vonage for voice over IP telephone service and DirecTV for home television services.

NPS as a measure of loyalty Ratings were based on survey responses from US consumers regarding their actual experiences with each company, and were calculated using the NPS metric. Co-developed by Satmetrix and loyalty expert Fred Reichheld of Bain & Company, NPS measures customer loyalty using a simple question: "How likely is it that you would recommend us to a friend or colleague?"

The score is determined by taking the percentage of 'promoters' who are highly likely to recommend the product or service, and subtracting the percentage of 'detractors' who are unlikely to recommend.

Key findings Highlights from the 11 reports conducted across the four sectors examined included:

  • Financial services (banking, brokerage, credit cards) Among the 20 financial institutions studied, Wachovia received the highest NPS for general banking services at 32%, with American Express topping the list for credit cards with an NPS of 47%.  
  • Telecommunications (ISPs, cable TV, cellular, local & long distance) In the highly competitive and service-intensive telecommunications sector, low NPS is common for many providers. Verizon and EarthLink ranked highest for internet broadband service with an NPS of 10%. In the Cable TV segment, DirectTV with its satellite service led with an NPS of 20%, and Vonage stood out in the local and long-distance telephone category with an NPS of 49%.  
  • Technology (computer hardware and software) With only 2% of detractors, Apple's NPS of 79% outpaced all other companies profiled in the 2008 reports. In the software segment, Adobe Systems led with an NPS of 46%.  
  • Online services (shopping, search, and information) Barnes & Noble led the online shopping category with NPS of 74%, while Google continued to outpace its rivals for core online search and information capabilities with an NPS of 73%.

"While NPS is based on asking customers about recommending products or services, it is actually a good indicator of customer loyalty. NPS is a strong predictor of repurchase behaviour and referrals through word of mouth," explained Dr Laura Brooks, vice president of research and business consulting for Satmetrix.

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