NPS reveals new focus on customer retention

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By: Wise Marketer Staff |

Posted on April 15, 2009

NPS reveals new focus on customer retention

Satmetrix has published its '2009 Net Promoter Score' (NPS) rankings for the financial services, telecommunications, technology and online services industries, naming today's leaders including Adobe, Amazon, Apple, AT&T, Charles Schwab, Google and Verizon.

The ratings were based on survey responses from US consumers who had purchased products or services from each company within the previous 12 months. Each company's Net Promoter Score is based on customers' likelihood to recommend the company's products or services to others. NPS is actually the percentage of customers who are 'Promoters', minus the percentage who are 'Detractors'. For the study, consumers also rated each company on eight aspects of the customer experience, including product or service features, customer service and overall value.

"With the economy in turmoil, companies are focusing on customer experience and retention more than ever," explained John Abraham, general manager of Net Promoter programmes for Satmetrix.

Highlights from the report include:

  • Telecommunications Vonage was the breakaway winner in the local and long distance sector with a score of 45%, in one of the poorest performing industry segments with an average of negative 7%. Cellular providers were the only telecommunications segment with positive NPS averages, and Verizon Wireless led with an NPS of 40% (almost double the industry average). Verizon's new FiOS fibre optic TV service direct to the home also stood out with an NPS of 28% in the cable TV category. Among internet service providers (ISPs), only three of the nine providers received positive scores, with AT&T topping the list (11%). As these industries continue to provide converged services, the NPS leaders will have a strong competitive advantage in customer loyalty and positive word of mouth.  
  • Financial services Banking institutions saw declines in NPS over the previous year, showing the impact of the current financial crisis on brands that compete in this industry. Banking had an average NPS of approximately 15%, with USAA leading at more than 100 points above Citigroup. Charles Schwab maintained its leadership position in the brokerage and investments sector with an NPS of 36%, while Merrill Lynch was placed in last position. In the credit card sector, American Express and Discover maintained their strong performance year on year, while USAA stood out as a leader in this segment.  
  • Technology Apple, with an NPS of 77%, continues to demonstrate its loyalty leadership as the top performer in the computer hardware segment and number two performer out of more than 90 brands studied. Adobe led consumer software with an NPS of 46%, while Microsoft trailed and security software leader Symantec showed significant improvements over the previous year on the back of major product and service enhancements in its Norton product line.  
  • Online services This sector achieved the highest average NPS of all industries studied with eight out of the top ten highest scoring companies coming from the online market. Google led the way in online search and information with a score of 71%, outpacing rival Yahoo! by 30 points. Social networking sites also ranked highly, with Facebook's higher NPS being reflected in faster growth in monthly unique visitors than its rival MySpace. Amazon.com led the online shopping sector with an NPS of 74%, followed closely by Costco.com.

"Since NPS is based on asking customers about their likelihood to recommend a product or service, it is a good predictor of repurchase behaviour and referrals through word-of-mouth," concluded Deborah Eastman, CMO for Satmetrix. "We continue to see word of mouth impacting customer retention and acquisition in all industries."

The NPS reports have been made available for purchase from the Net Promoter web site - click here.

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