The power of three – Referrals, Usage and NPS – 2010 NPS benchmarks

Satmetrix, the Net Promoter Company, released their annual Net Promoter Score benchmarking report across 17 industries in the USA.  This is one of my favorite indicators because it can be used to establish a trend line and an objective measurement of the user experience, which at the end translates into improvement to the profitability of the company.

Not surprising, the worse results are in the health insurance industry (-13%), Cable & Satellite TV (-1%), credit cards (0%) and Internet Services (4%). The leaders are the usual suspects, with Google, Apple, Facebook, Costco, Amazon, USAA and Adobe leading both, their respective categories and the overall ranking across all industries.

Microsoft absence from the leadership board is notable and AT&T having a 9% score (the worse in their industry) is a bit of a surprise as I have suffered the poor service with my iPhone and I expected lower scores for AT&T, so maybe their service for non smart phones is not that bad after all. Still 30 points behind from the leader Verizon (41%)

One of the first questions I ask the CEO of any company is how good they think their user experience is. The majority claims their user experience to be superb. The problem is that few of their customers agree. In a nationwide study done in 2008, over 80% of the CEOs thought their product offered a superior user experience, while only 7% of their customers agreed. This is basically equivalent to driving a company blindfolded and we focus our practice on establishing a good KPI based practice where NPS is one of the core indicators used to rally and align the company around the concept of offering a superior user experience.

After 7+ years of experience deploying NPS and KPI practices across the marketing and engineering departments of Fortune 500 and small startup companies, the NPS is the one indicator I suggest companies to focus on if they cannot focus on anything else, and time after time, results prove the power of aligning a company around the single goal of delighting customers and having a solid indicator to look at and measure progress.

For online companies, two other indicators correlate well with NPS: Usage and Referrals. If architected properly, the online product or service should be able to tell us the actual referral rates, allowing us to compare intent (NPS) with action (referral) and identify areas for improvement in the user experience to reduce the gap between intent and action. Usage can also predict future attrition or referrals and tied to NPS and referrals, becomes another critical KPI that allow us to objectively measure the impact of our marketing and engineering actions in the user experience and ultimately in the health of our business.

The power of three, to multiply your profits. It starts with NPS.