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Net Promoter Industry Report Reveals Customers´┐Ż True Feelings

June 08, 2006

The findings of the “Net Promoter Industry Report 2006: Telecommunications” have been released, identifying the best and worst Net Promoter rankings within the US telecommunications industry. Comparing 33 organizations from across the sector, the report reveals which companies are most likely to have their customers recommend them and drive further business growth.
 
Research for the report was conducted and validated by Satmetrix, an enterprise customer experience management (CEM) company and co-developer of the Net Promoter Score. Each of the 33 top US telecommunications organizations are ranked according to their Net Promoter Score.
 
The Net Promoter Score is a metric based on actual customer feedback and links a customer’s experience to profitable growth. Customers are asked to respond to the question: How likely is it that you would recommend us to a friend or colleague? It enables a company to track promoters or customers who have a favourable view of doing business with the company, and detractors or those who have a negative view and will encourage potential customers to take their business elsewhere.
 
Satmetrix considers the Net Promoter Score to be the producer of the most reliable indicator of a company’s ability to grow by measuring an organization’s performance in the eyes of the customer.
 
Topping the inaugural report, Road Runner, a high speed broadband service provider by Time Warner Cable, earned a Net Promoter Score of 56 percent. Road Runner’s detractors equal 10 percent, passives settle at 25 percent and promoters equal 65 percent.
 
The company that returned the lowest Net Promoter Score within this report had less than half the percentage of promoters as Road Runner and more than five times the percentage of detractors.
 
Respondents who acknowledged Road Runner identified certain criteria as having the biggest impact on their likelihood to recommend the company to others. These criteria include: product/service delivery; ease of use/user friendliness; speed of connection; sales/buying experience; on-line services; billing; and ease of doing business.
 
Dr. Laura Brooks, vice president of research and business consulting at Satmetrix, noted that over the last few years, the telecommunications industry has been converging with merger and acquisition activity disrupting the industry and putting companies at risk of losing their customer base. By closely watching its Net Promoter Score, a company can manage change more effectively and both retain its most valuable customers and attract new ones.
 
The results of the Net Promoter report are based on actual responses from customers regarding their experiences with particular provider. An e-mail invitation explains the purpose of the survey, offers an incentive for participating and provides a link that allows the individual to click through to the Satmetrix survey site. All respondents are private customers of the companies included in the survey. To purchase the full report, go here.
 
The Net Promoter Score is an excellent way for companies to get an idea of how they are performing from their biggest critics – their own customers. It is pretty well known throughout the business world that a detractor may never tell the company why they left, but will certainly tell plenty of potential customers, costing the company future revenues. Providing these companies with the ability to capture this information is invaluable.
 
Something worth further investigation, however, is the method these companies executed to select which customers would receive the emailed survey invitation – whether it was all customers or a random sample – and how many of those invited actually participated. This information must be considered to gain an accurate measure of the true performance picture as the margin of error usually provides a good indication of the validity of the findings.
 
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Susan J. Campbell is a contributing editor for TMC and has also written for eastbiz.com. To see more of her articles, please visit Susan J. Campbell’s columnist page.
 

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