Many organizations that are new to Net Promoter Score® and are considering putting a program in place want to understand how such a simple question can lead to real business results. They want to know if promoters really help them grow and are loyal to the brand. There are countless reasons why listening to customers and improving based on their feedback is important, but when it gets down to it, does improving NPS lead to more repeat customers, more referrals, and overall growth? We’ve put together 4 case studies, from companies of different sizes and industries and their results with NPS.
NPS boosts American Express shareholder value
In 2005, American Express needed a customer service overhaul. When Jim Bush began as Managing Director he felt a more interactive conversation with customers would be a game changer, so he tested his hypothesis by transforming customer conversations with call center operatives from structured and often hurried experiences into relaxed and engaging experiences. While his competitors maintained their transaction-oriented customer service, Jim implemented conversational customer service and began to appraise service reps with NPS. Acting on the insights received from NPS led to increased revenue with increased customer spending and reduced customer churn.
In a 2012 interview with Fortune magazine, Bush noted that spending by promoters who are fiercely loyal to the American Express brand went up by 10–15% and customer retention increased four to five times. “We’ve been able to show that increased satisfaction drives increased engagement with American Express products, and that drives shareholder value. Great service is great business.” In 2012, American Express had an NPS of 43 and between 2012 and 2015 American Express grew their NPS by 16 points.
Airbnb connects higher NPS to more referrals and rebookings
Worldwide accommodations leader, Airbnb started using NPS towards the end of 2013. Airbnb wanted to see how Net Promoter Score could add value to their feedback program and establish if there really was a link between NPS score and the likelihood that the guest would return to book another stay, tell family and friends about the unique service, and resist attractive deals and offers from the competition.
The research involved feedback from 600,000 guests who booked a stay with Airbnb between January and April of 2014. Two-thirds of guests, who submitted feedback were promoters – over 300,000 of them awarded Airbnb a score of 10 and just 2% of guests were detractors.
Airbnb found that guests who were promoters were statistically more likely to both book another stay and refer a friend or family member (via their invite a friend feature). Interestingly they also discovered that while a guest may not have been satisfied with a particular stay, 26% were still promoters of Airbnb, reinforcing the need to go beyond just CSAT on a per transaction or booking level.
British Gas Services reports 30% growth per year
A few years ago, British Gas Services (BGS) had issues with its home heating installation unit. The leading gas supplier in the United Kingdom had the goal of making this business unit profitable as it was losing money. BGS introduced NPS and drove the process by instituting a thorough feedback process, which involved a daily NPS rating for each individual installer and sales adviser in all of its 75 districts. The results? Their NPS increased to 75 in just two years (from a baseline of an NPS of 45). In addition, customer complaints were reduced by 75%, bad debts went down more than 90%, profit margins improved greatly, and the service grew 30%. As of 2015 British Gas Services had an NPS of 70.
Temkin Group research on customer loyalty and NPS
In 2016 the Temkin Group published research that found a strong link between NPS and customer loyalty. After analyzing 291 companies in 20 industries such as – grocery, delivery services, health, finance, fast food, technology – the study established the long held value of NPS. The research showed that promoters are a business’ greatest asset and are:
- Likely to recommend an organization to at least 3.5 people
- 5 times more likely to purchase more goods or services
- 7 times more likely to forgive brands for errors
- 9 times more likely to try new product offers from businesses they love
NPS helps businesses make smart, informed decisions. However, as we’ve stated before, NPS is just a calculation of how you are doing today in the minds of customers. The key to NPS success starts with ensuring that everyone in your company has access to customer feedback, you implement processes to address customer feedback, and you continually close the loop with your customers to let them know how you have implemented their feedback.