NPS link to service provider revenues
A global consumer survey of smartphone owners that explores the link between Net Promoter Score (NPS) and service provider revenues and costs has shown a clear link between the metric and revenues.
The survey from Amdocs revealed a direct link between NPS and service provider revenues, with 88 percent of consumers indicating that they would increase spending with their service provider by almost one third if they received better service, and a further 84 percent stating they would be happy to recommend their service provider to family and friends, thus reducing the cost of customer acquisition.
“This type of research helps quantify the link between customer loyalty (NPS) and profitable growth,” said Fred Reichheld, founder of Bain & Company’s Loyalty Practice and creator of the Net Promoter system of management. “The results provide a clear message to the industry: improve customer service if you want to grow.”
Key findings of the global survey of 2,000 consumers include:
- Service provider NPS remains very low. The average NPS of wireless telecoms companies was minus 3.2 percent. The score is determined by the number of promoters less the number of detractors, and ranges from -100 to 100 percent. Industries with good NPS typically score 30-50 percent.
- Consumers share bad experiences, friends and family listen. Three-quarters (73 percent) of consumers have complained about their service provider on social media on average six times in the last 12 months. Consumers mostly used their own Facebook page to complain (45 percent), followed by Twitter (26 percent) and service providers’ own Facebook pages (25 percent). More positively, half of all consumers (49 percent) said they would switch to a service provider if recommended by friends and family, based on a poor experience.
- Turning detractors into promoters is good for business. Promoters are three times more loyal than detractors and have no intention of switching service providers. In addition, promoters are “very likely” to buy additional services (wireline, cable, broadband, etc.) from their service provider, unlike detractors. Eighty-six percent of promoters commented positively about their service provider to friends and family 9.5 times on average over the last 12 months.
- Proactive care and mobile self-service tools are highly effective NPS improvers. An earlier Amdocs survey in February this year, found these tools are highly effective in helping service providers improve customer experience, with 84 percent of consumers saying they would be more likely to recommend their service provider if the provider was able to identify and pre-emptively resolve potential issues affecting them; and 83 percent would be more likely to recommend their provider if they were offered easy-to-use and consistent self-service via their mobile device.
“Service providers need to simplify the customer experience to help increase NPS,” said Rebecca Prudhomme, Amdocs vice president for product and solutions marketing. “Proactive care and self-service strategies not only help increase NPS but, as demonstrated by this survey, can also increase revenue.”
This latest research, conducted in May 2013 by leading analyst firm Coleman Parkes, is based on 2,000 interviews with smartphone owners in North and Latin America, Europe and the Asia-Pacific region.