15 Net Promoter Score Statistics You Need To Know

Lumoa

Last updated on August 25, 2022

With the growing understanding of customer experience importance, more and more companies are closely watching their customer feedback.

A few decades ago, long customer surveys have been the main source of information. Since then, a lot has changed and the Net Promoter Score has become a global standard for measuring customer experience.

According to our own research among 100+ customer experience directors, NPS is used in two-thirds of the companies (to compare, CSAT is used in less than a half and only 14% of companies measure CES).

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What is the Net Promoter System?

Net Promoter System was designed by Fred Reichheld in 2003 to measure customer experience and predict its impact on the future of the company. NPS consists of 2 questions, allowing to get both quantitative and qualitative data about customers’ feelings.

1 what is net promoter score - Lumoa

Many companies are calculating the Net Promoter Score, forgetting the “System” and, thus, miss out the most of what this metric has to offer. “Knowing the number is one thing. Knowing the “why” behind the number and how to use it to gain a competitive advantage is another” – mentions Step Hyken, customer service & experience expert and bestselling author of “The Convenience Revolution”.

Indeed, many customer experience professionals, leaders, and consultants agree with Jane Treadwell-Hoye, CCXP and managing director at epifani, who says: “Senior Leadership teams are easily distracted by the number and fail to appreciate that it’s the tangible actions that you take, based on the insights you gain, that drive the changes that will improve the number.”

The tendency of companies to focus on the number only got very visible when we evaluated what CX professionals themselves think of NPS. The opinions were divided, but in short, the NPS of NPS is 32. Keep reading here to discover how 30+ CX leaders reflect the value of NPS.

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Good Customer relationships are Worth a fortune

Early in 2005, 2 years after the creation of NPS, the London School of Economics discovered a correlation between NPS increase and revenue growth. According to them, an average NPS increase by 7 points correlates with a 1% growth in revenue.

Indeed, according to the 2017 Temkin research, promoters are 4.2 times more likely to buy again, 5.6 times more likely to forgive a company after a mistake and 7.2 times more likely to try a new offering compared with the detractors. Adobe confirmed the finding: customer-centric businesses grew revenue 1.4 times faster and increased customer lifetime value 1.6x more than other companies.

As a general rule, according to PwC 2017 research, 60% of CX leaders see larger returns from CX initiatives relative to other initiatives in their organization.

Bad customer experience costs more than a good one

Lack of budget is a challenge for at least one-third of customer experience management professionals in both small companies and global enterprises. Many companies forget that not taking care of the customers costs much more than taking care of them.

Oracle discovered that 89% of consumers began doing business with a competitor following a poor customer experience. At the same time, after a bad experience, 22% of customers cut the spending with the company and 19% stopped the relationship with the company completely which results in a huge loss of revenue.

The power of word-of-mouth

NPSStatistics - Lumoa

Net Promoter Score examines the likelihood of recommendation or word-of-mouth marketing. In 2015, Nielsen found out that 83% of customers would trust recommendations from the people they know: colleagues, family, friends, etc.

At the same time, according to the same research, 66% of consumers would also trust other consumer opinions posted online. (This way, word-of-mouth marketing can easily play a role of anti-marketing.)

As the famous quote of Jeff Bezos, CEO of Amazon, a leading customer-centric company, goes: “If you make customers unhappy in the physical world, they might each tell 6 friends. If you make customers unhappy on the Internet, they can each tell 6,000 friends.”

Conclusion

More than a third of all companies don’t regularly ask customers for any feedback about their interactions and 77% say that they don’t model the drivers of customer experience quality regularly, which leaves them in the dark about what matters most to their customers.

Net Promoter Score gives you a chance to do both. NPS is very easy to implement for businesses and is very fast and simple for customers to understand.

By using NPS properly, businesses can achieve great results, growth and start benefiting from being surrounded by promoters.

ROI of Customer Experience

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