Demonstrating the success of the Net Promoter Score methodology to skeptical senior management can sometimes be difficult. It is especially so if you are trying to prove it before your organisation has implemented any changes.
One way to prove the value of NPS® is to use external success stories and case studies to show what has been done by other organisations. Unfortunately, finding those case studies can be very difficult.
To try to overcome this issue, I have decided to create a list of case studies and references that are public domain. This blog post will be updated whenever I have new material.
This is an adjunct to my other source list post: Net Promoter Score Research: the “for” and “against” list
Forrester Total Economic Impact™ Study
A recent Forrester study estimated the financial impact of implemented an NPS management system across a range of organisations. The estimated impact is below.
Note that the dollar value of the impact is not the key learning here. Different sized organisations will have different absolute improvements.
What is key here is to note value is generated by both increased customer loyalty AND improved operational efficiencies. This matches with our experience – where we see operational efficiency driving as much business value as increase income from customer loyalty.
Bain and Company
Bain and Company is a global management consulting firm that advises executives of large businesses on critical decisions. They’ve calculated through their retail client’s results with NPS programs that promoters spend 3.5 times more than detractors.
Macquarie Telecom Group
Macquarie Telecom Group are an Australia’s data centre, cloud, cyber security and telecom company for mid to large business and government customers. They have identifed that their customer retention and cross sell have increased while debtors have decreased as Net Promoter Score has improved.
Temkin Group Research
Research from Temkin indicates:
NPS was highly correlated to the likelihood of a customer to purchase more from a company (R = 0.81).
When compared with detractors: …
– promoters are more than five times as likely to repurchase from companies
-more than seven times as likely to forgive companies if they make a mistake
-almost nine times as likely to try new offerings from companies.
Business Telco Uses NPS To Increase Orders
IT Supplier Uses NPS to Find New Sales
IT Product Supplier used NPS process and identified new opportunities in 39% of follow-up meetings [Tweet this stat]
IT Vendor Doubles Growth Rate
IT Vendor used NPS process and doubled growth rate in accounts that participated [Tweet this stat]
Forrester Finds Customer Experience Drives Revenue
- Buying more products: $64million
- Reduction in churn: $116 million
- Word of mouth $103million
Global Communications Business Increases Sales by 13%
Global B2B Company Doubles Loyalty
A Global B2B has a quarterly review of results and action plans with Executive team, team leaders, sales leaders. Achieved 100%+ increase in loyalty, double digit growth in mature market [Tweet this stat]
Global Facilities Company Lifts Retention Rates 46%
Cablecom Find Lifetime Value Linked to NPS
The image below shows a chart of Customer Lifetime Value Vs. NPS. If you review it you will see that the Promoters (9 or 10) make up 40% and Detractors (0-6) make up 24% of the highest value group. [Tweet this stat]
A&E Television shows strong link between NPS and Ratings
Major Telco Links NPS to Churn
Optus (Telco) Links NPS to Customer Experience to Reduction in Churn
“Optus’ country chief officer Kevin Russell said that the carrier’s customer-focused initiatives were paying off, with a 50 per cent decline in the number of new complaints to industry ombudsman and a six points jump in its Net Promoter Score over the December quarter.
“This has put Optus’ benchmarks for customer experience into positive territory for the first time in a number of years,” Optus said in a statement.
“These customer experience improvements are reflected in a reduction in mobile postpaid retail churn to 1.4 per cent.”
Allianz Shows High NPS => High Revenue Growth
Retailers link NPS to Store Sales
Swiss Re Discovered that Promoters Pay More
Swiss Re found that there was a clear relationship between NPS and Long-Term Rate Adequacy. Strong Promoters (100) pay about 5% more than Passives (0) and 10% more than low Detractors (-100). [Tweet this stat]
eBay Linked NPS to Revenue
Maersk Link Shipping Increases with increases NPS
“Maersk correlated a 4 point increase in Net Promoter Scores with a 1% increase in additional volume shipped by customers”. Training improves Net Promoter Scores in local regions. “Maersk gave regional divisions the option of putting regional customer experience councils in place. The 55 regions that have set up local councils also received a three-day training course in customer experience improvement methods. The firm then did a study comparing regions with and without a council. The result: participating local offices score 10 points higher on their NPS than those offices that opted out”. [Tweet this stat]
Health Insurance Provider nib links NPS to attrition rates
For nib health funds is one of Australia’s leading and fastest growing health fund, The risk of attrition for Detractor respondents is 1.5 times that of Promoter respondents. Plus a one point increase in “Would Recommend” score results in a decreased of risk of termination by 7.8% [Tweet this stat]
Multi-industry NPS -> Revenue growth linkages
American Express Links Shareholder value to NPS
Amex says: “We track [NPS] all the way to shareholder value. For a promoter who is positive on American Express, we see a 10% to 15% increase in spending and four to five times increased retention, both of which drive shareholder value. In fact our operating expenses associated with service have gone down because we’re more streamlined, and we limit friction points and errors. [Tweet this stat]
Tech companies NPS linked to purchasing momentum
NPS links well to market share momentum for Tech Companies. Temkin Group recently surveyed 800 IT professionals from large companies. They asked the IT professionals how much their company was planning to spend in 2012 compared with 2011 and mapped this data with NPS and asked them a series of questions about tech vendors. The result is below. [Tweet this stat]
Organge France (Telco) Links Churn to NPS
Orange France has identified that NPS is highly correlated with churn propensity. [Tweet this stat]
Progressive Insurance Correlates Retention rate to NPS
“Three things that I want you to note from this overall segmentation. First, solid correlation between policy life expectancy and Net Promoter Score. So while we monitor, measure and act on Net Promoter Score and make investments to move that, we’re investing to improve our policy life expectancy.”
Outsourcing Company links sales and revenue to NPS
Teletech reports that after NPS methodologies were implemented at one organisation…
NPS increased by 20 percent …
Furthermore, sales and revenue significantly increased. The chat sales conversion rate went up by more than 62 percent, while the amount of revenue generated for chat interactions went up by more than 51 percent.
Bain Calculates the Incremental Value of a Promoter — Multi-industry
This data from Bain in 2013 shows the incremental value of a Promoter over a Detractor for a variety of industries. You can see for example that you can more than quadruple the value of a customer in some businesses.
Telco iiNet Directly Links Net Profit to NPS
He also explained that iiNet’s customer service team is its “heroes” and claims that a 0.1% improvement in customer churn added up to 20% recurring improvement in sales.
Heineken Links Revenue to NPS
What’s the value of driving customer satisfaction? – Promoters spend 2.5 times more than detractors. [Tweet this stat]
Stora Enso (Pulp and Paper manufacturer, B2B)
Company focused on converting Detractors. In a direct comparison of the same group of customers, Stora Enso converted 77% of Detractors to Passives and Promoters.
These “converts” changed their purchasing behaviour as a result:
- Customers who remained Detractors—average sales fell 36%
- Customers who were converted to Passives—average sales increased by 16%
- Customers who were converted to Promoters—average sales increased by 25%
British Gas NPS Turn Around
British Gas’s NPS program delivered substantial returns.
Symantec Reduces Costs
Symantec implemented Net Promoter in the part of the business that develops and market “Norton” products. In the process they substantially lifted their Net Promoter score and delivered, amongst other benefits:
- Support achieved a 10-12% reduction in call times, plus agents now handle an average of 1.6 customers at a time.
- 30% reduction in support costs was reinvested in the customer experience, keeping overall budgets flat.
Source: Satmetrix Case Study
Links to Source Documents
Some of these documents may require you to have access to a specific site. We cannot help you gain access to those site(s), you must do so yourself.
(1) Satmetrix, Improving Net Promoter Scores in Business to Business Relationships Net Promoter Conference 2009