NPS Blog

A rising Net Promoter tide can lift all boats (or sink some)

riding-boats-nps-blog-220x207Fred Reichheld believes that companies are getting better at listening to customers. In a recent LinkedIn blog post, he describes how customer feedback is a guiding force at Uber, Harry’s and Airbnb.

I’m sure many read the blog post and thought, “Sure, these are niche start-ups that offer services customers want to use, for example, when they’re on vacation.” But what about the big multinationals with millions of customers, thousands of employees and complex operations spread across the world? What about companies whose services are less fun and more practical utilitarian? Are they listening to customers?

It’s a fair question. And so far, the research has been promising. We’re noticing the same upward trend in industries you might not expect—banking and wireless telecom. Bain has been working with market research firm Research Now to collect and analyze Net Promoter Score data for major retail banks, wireless service providers and handset makers for years. And in general, scores have been rising across many major companies in these industries.

Among US banks, the average Net Promoter Score doubled from 14 in 2009 to 28 in 2015. The gains reflect the major steps banks have taken to rebuild trust with customers since the most recent financial crisis that started in 2007. They’ve been using mobile apps and other digital tools to make rote tasks, such as deposits and bill payments, convenient for customers. At the same time, they’ve been upgrading their bank branches to make complicated services, such as loan applications and investment guidance, less painful.

It’s a similar story in wireless telecom, where the average Net Promoter Score for the top four US carriers climbed from 10 in 2013 to 17 in 2015. And among US handset makers, the average Net Promoter Score rose from negative 10 in 2012 to 17 in 2015.

Wireless companies face many hurdles as they try to provide consistent service and offer the hottest new phones and tablets to customers. There’s the massive infrastructure required to ensure reliable service. And there’s the ultra-competitive handset market, where constant investment and innovation are required to keep up with consumer tastes—and survive.

To be sure, external factors also contribute to across-the-board gains in Net Promoter Scores in these sectors. A strong stock market makes for happier banking customers as rising returns lift their portfolios. In telecom, it’s hard to argue that developments in smartphones aren’t making everyone’s lives a little easier.

But these companies are also doing the hard work of fostering regular dialogues with customers. My colleague Rob Markey  talked to John Dwyer, AT&T’s senior vice president for customer experience, earlier this year about the great strides AT&T has made in improving its service. Our recently released Customer Behavior and Loyalty in Retail Banking report highlights all the creative ways that banks are fusing digital tools with physical resources to create a better experience for customers.

Before anyone declares victory in customer service, it’s important to remember that the bar is always rising. Today’s product upgrade will be tomorrow’s standard-issue feature as competitors adopt and one-up each other’s innovations. Also, not all sectors are seeing the same gains seen in banking and telecom—and there are still laggards in these industries.

That’s why loyalty leaders should never satisfied when they see their Net Promoter Scores rise. To fully evaluate their progress, they should compare their scores with those of peers, using a competitive benchmark Net Promoter Score. Doing so would require them to seek feedback not only from their customers but also from potential buyers of their products and services. While the process may sound complicated, it’s a powerful way to spot weaknesses that a high relationship Net Promoter Score might mask.

When a company consistently does it right, a competitive benchmark can provide the basis for goal setting and prioritization. This exercise also fights the complacency that sets in when companies start comparing their scores with Apple’s high scores and overlooking major service problems that can sink them later.

Learn more about the steps banks are taking to improve loyalty in our new report: Customer Behavior and Loyalty in Retail Banking.

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