Net Promoter Study Unveils Customer Loyalty Leaders for 2012

Apple, Amazon.com, Costco, and USAA were among the brands topping Satmetrix's latest Net Promoter Industry Benchmarks survey, which was released today. Based on survey responses from more than 30,000 U.S. consumers, the poll includes ratings for more than 200 brands across industries such as financial services, insurance, travel and hospitality, online services, retail, and more.

This year's study includes new coverage for auto service and repair, drugstores and pharmacies, hardware and home-supply stores, hotels, and travel Web sites.

The Satmetrix Net Promoter Benchmarks ask consumers nationwide to rate their experience with the primary brands they use. The Net Promoter Score (NPS) for each brand is based on customers' likelihood to recommend the company's product or service in the sector being rated.

NPS is calculated as the percentage of customers who are considered promoters by rating the company with a 9 or 10 on a 0 to 10 point scale, minus the percentage who are detractors, rating 6 or lower. Consumers also rate each brand on various aspects of customer experience, including product or service features, customer service, and overall value, enabling Satmetrix to analyze drivers of loyalty and recommendation.

Highlights of the survey results are as follows:

USAA's direct banking operation led the banking sector again this year with an NPS of 83 percent, the highest NPS recorded across all brands and industry sectors. The Wachovia brand (acquired in 2009 by Wells Fargo) trailed the list with an NPS of negative 15 percent.

USAA also dominated both the auto insurance sector at 74 percent and homeowners insurance at 71 percent. By contrast, most major health insurers had nearly as many detractors as promoters, tallying up an industry average NPS of just 4 percent (0 percent if sector leader Kaiser Permanente is not included). Kaiser stood out again this year with an NPS of 33 percent. For life insurance, State Farm led again this year at 28 percent.

The travel and hospitality group had the largest number of new additions to the study this year. Newcomer Virgin America captured the top spot with an NPS of 66 percent, beating last year's winner, JetBlue Airways, which received an NPS of 64 percent. American Airlines trailed the sector at negative 5 percent.

In the newly introduced hotel sector, Marriott and Hilton led with scores of 56 percent and 55 percent, respectively.

In the online search and information Web sites category, Google was this year's leader again with an NPS of 56 percent. Facebook lost 21 points compared to last year's benchmark, dropping to an NPS of 31 percent. Among online shopping Web sites, Amazon.com received an NPS of 76 percent, placing it second among all brands profiled in the study, just behind USAA's direct banking operation.

In technology, Apple's loyalty performance matched its financial performance in the technology sector this year, again leading the computer hardware sector with an NPS of 71 percent. The company also performed well for its consumer software applications, scoring an NPS of 68 percent.

"The annual benchmark is an important guidepost for executives to understand which brands are truly winning the loyalty of American consumers," said Deborah Eastman, general manager of consulting at Satmetrix, in a statement. "It also presents a challenge to many companies, to understand how they can be more effective at listening to the voice of their customers and delivering experiences that are worthy of recommendation."

The concept of the Net Promoter Score was first popularized through Fred Reichheld's 2006 book, The Ultimate Question. Despite its popularity, the customer loyalty metric has also been criticized as overly simplistic and unreliable.

"The Net Promoter Score is better than just awareness [of what customers are saying about your brand] but it's certainly not the answer, since it's not tied to financial factors," maintains Donald E. Sexton, professor of business and director of the Center for International Business Education and Research at Columbia University. "The true test is how much [is your customer] willing to pay for that sandwich, automobile, insurance, etc."

On the Net Promoter Web site, users are warned that "simply measuring your NPS does not lead to success." According to the site, companies also need "leadership commitment, and the right business processes and systems in place to deliver real-time information to employees, so they can act on customer feedback and achieve results."

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