Net Promoter Score (NPS) is directly linked to service provider revenue according to a new global consumer survey of smartphone owners from customer experience systems and services firm Amdocs.
NPS is a customer loyalty metric, which measures the willingness of consumers to recommend a product or service to others. The survey showed that 88% of consumers indicated that they would increase spending with their service provider by almost one third if they received better service, and an additional 84% said they would be happy to recommend their service provider to family and friends -- reducing the cost of customer acquisition.
"This type of research helps quantify the link between customer loyalty (NPS) and profitable growth," Fred Reichheld, founder of Bain & Company's Loyalty Practice and creator of the Net Promoter system of management, said in the survey release. "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%. The score is determined by the number of promoters less the number of detractors, and ranges from -100 to 100%. Industries with good NPS typically score 30%-50%.
Consumers share bad experiences, friends and family listen. Nearly three-quarters (73%) of consumers have complained about their service provider on social media on average six times in the past 12 months. Consumers mostly used their own Facebook page to complain (45%), followed by Twitter (26%) and service providers' own Facebook pages (25%).
On the bright side, nearly half of all consumers (49%) said they would switch to a service provider if recommended by friends and family who had a poor experience.
Turning detractors into promoters is good for business, the survey said. 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) from their service provider, unlike detractors. And 86% of promoters commented positively about their service provider to friends and family 9.5 times on average over the past 12 months.
Proactive care and mobile self-service tools are highly effective NPS improvers. A previous survey from Amdocs, in February 2013, found these tools are highly effective in helping service providers improve customer experience, with 84% 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% 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," Rebecca Prudhomme, Amdocs’ vice president for product and solutions marketing, said in the release.
The survey, 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.