Table of Contents

• Key Takeaways
• Market Leaders’ NPS Scores
• High Customer Retention and Growth
• What Do These Companies Have in Common?
• Want to Find Out What Your Own NPS Is?

Does your company retain its customers or take them for granted? Customer retention is one of the most important aspects of growing your company, yet it’s one that many overlook, focusing more on acquiring new customers. Given that, it’s 6 times more expensive to attract new customers than to keep existing ones – the ignorance shall turn costly.

The longer your company can retain its customers, the greater the value of each customer you acquire. The key to retaining customers is extremely simple: deliver value and provide a great experience that makes customers want to stick with you and recommend you to others. Of course, besides doing that, you also need to track your results.

Well, by far the most effective way to measure customer satisfaction and loyalty is via the Net Promoter Score. After all, brands with high customer retention are usually companies with a high NPS score.

Since the best way to realize the importance of something is to see it in action, we’re going to discuss what companies with the highest NPS score in 2024 (Apple, Starbucks, Netflix, Tesla, Airbnb, and Amazon) have in common that sets them apart from their competitors.

Key Takeaways

• Companies with high NPS know that keeping customers happy is smarter – and cheaper – than always chasing new ones. 
• These brands thrive by consistently delivering value through reliable, user-friendly products while providing personalized and seamless experiences across every customer touchpoint.
• By leveraging employee satisfaction, they deliver exceptional customer service, as engaged employees are more committed to creating experiences that drive loyalty and boost NPS scores.
• High NPS companies maintain accountability and credibility with users, making them a favored choice for repeat purchases.

Market Leaders’ NPS Scores

According to the data we gathered from various sources, these are the scores of the mentioned companies:

• Netflix’s NPS is 68, well above their competition;
• Starbucks’ NPS is a decent 77;
• Amazon’s NPS is a pretty high one at 62;
• Airbnb’s NPS is quite strong at 74;
• Tesla’s NPS is an astounding 96.

Given that an NPS score averages between -100 and 100, it’s clear the NPS scores of these top companies match their brands’ level of popularity.

So, what do those high scores translate into, specifically?

High Customer Retention and Growth

A high NPS score means a lot of customers are so happy with the brand that they are much more likely to stick around with it simply because they like the company alongside its products and its services.

Let’s see what level of customer retention each company has, in fact.

Amazon Customer Retention

Research has shown that 73% of people who try out Amazon Prime become paid members. What’s more, after the first year, 91% of the members renew their subscription for a second year, and 96% of those members pay for a third year as well.

Even today, Amazon is actually boasting amazing customer loyalty, at least according to Forbes; however, the company wasn’t quite ready to share exact customer numbers up until recently. Still, Amazon did state they signed up more new paid members in 2017 than any other year and in 2020 they mentioned having more than 200 million Prime members worldwide.

In 2024, Amazon reported impressive financial results, with total revenue climbing by 12% year-over-year in the US and 11% year-over-year in international markets.

Airbnb Customer Retention

The platform has grown very popular since it first launched, and Airbnb’s NPS score reflects that.

Although Airbnb’s revenue took a massive hit due to lockdowns throughout 2020, and did not reach the forecasted 60.8 million users by 2021, the audience steadily grew over the years.

According to statistics, Airbnb amounted to around 41.1 million users as of 2019, and the number was expected to grow to around 45.6 million by 2022 – and that’s only in the US! Worldwide, it’s estimated that Airbnb has around 150 million users.

Tesla Customer Retention

Tesla’s customer retention shows what an impact that huge NPS score has. Apparently, approximately 91% of Tesla owners said “they would buy again” from this brand. Tesla has actually been no #1 in the Annual Owner Satisfaction Survey over the years.

Tesla is therefore a leader in brand loyalty, being the only major automotive brand that showed an increase in sales of up to 21.4% in 2020 to date. At the same time, 25% of Tesla owners said they’re not even considering buying a different vehicle or doing business with another brand.

Although US demand for electric vehicles has been weaker than anticipated lately, the global market is on the rise, with electric cars projected to account for over 20% of worldwide sales in 2024. Therefore, Tesla’s outlook remains optimistic.

Netflix Customer Retention

Compared to its competitors, Netflix has an amazing retention rate. According to research, while a lot of Hulu (61%) and HBO Now (62%) subscribers pay for other streaming services, 80% of the Netflix subscribers don’t. In fact, the Hulu and HBO Now subscribers in question actually pay for Netflix on the side!

Plus, the average Netflix subscriber will stay with the company for 25 months. So, Netflix has enough time to earn back the money they spend on acquiring new customers.

As the pandemic was underway Netflix added a record of nearly 37 million additional customers in 2020. Although it was unlikely that they would be able to match the same result in the following years, Netflix still remained the leader of the streaming industry with over 221.8 million total paying subscribers by the end of 2021. As of the second quarter of 2024, Netflix reached over 277 million paid subscribers worldwide.

Starbucks Customer Retention

Consumers love Starbucks – even more since the company implemented its rewards program. Apparently, customer loyalty was so high that Starbucks’ program ended up holding more money than some banks.

Starbucks’ app is also used regularly by around 48% of app users, being the most popular amongst the restaurant loyalty rewards apps. It is also the second most-used mobile payment app (after Apple Pay) with 31.2 million users – showcasing the kind of customer loyalty the brand enjoys.

What Do These Companies Have in Common?

1. Simple, Reliable Services & Products

All these market giants have so many Promoters because those people love how easy their services/products are to use, and how reliable they are.

For example, the biggest initial selling point of Netflix was its simplicity – a great online entertainment service that saved you time. That trend continues to this day. Amazon has invested plenty of resources into making its sales, shipping, and return processes as simple and reliable as possible.

Tesla’s cars feature a very sleek, user-friendly design. Instead of multiple buttons, joysticks, and knobs, Tesla owners get to enjoy a large display screen that features easy-to-use on-screen touch controls.

Airbnb’s platform is fairly easy to use and get the hang of, and its mobile apps are simple to understand too. Since guests can message hosts before making a booking to ask questions and get to know them, it also makes the service quite reliable in the sense that people will know exactly who they will be doing business with.

As for Starbucks, they’re known for offering what some would call “the best coffee experience”, highlighting their reliability. Plus, their loyalty app lets people order ahead, meaning they can just place an order for a coffee and food, and pick it up on their way to work or home.

That’s not to say you need to do the exact same thing as these companies, but anything that makes your product a more convenient, reliable, and dependable choice will increase the value a customer gains from staying with you.

2. Fast, Straightforward, Quality Services

Offering reliable, easy-to-use services/products will do wonders for a company’s customer retention rate, but it won’t be enough to maintain it. The offering in question also needs to be fast and convenient, so that they save consumers time and effort.

Here are just some ways these companies achieve that goal:

They Make Customer Interactions with Their Brands Effortless

How? By collecting all the relevant info from customer complaints, support requests, and feedback, and sharing it across departments in their companies.

For instance, once you have registered a complaint with Amazon, you don’t have to keep repeating the problem over and over again. The records of customer complaints are persistently stored in Amazon’s centralized database, and can be accessed conveniently by any customer service executive.

Netflix makes it easy to call them through a toll-free number, and has an extensive “knowledge base” where users can usually find the solution they seek on their own. Their live chat is also known to be quite speedy, helpful, and easy to access since it’s clearly displayed on the website.

Tesla is well-known for providing a hassle-free, personalized customer experience, and they have even started allowing customers to escalate issues to a company executive. Tesla customer reps also communicate with other internal departments to improve the customer experience.

Something like this might not always increase the number of Promoters, but it goes a long way in reducing the outflow of Detractors, thereby improving your Net Promoter Score. It can also cause existing Promoters to act as your brand advocates, and potentially turn Passives into Promoters.

They Provide Single Sign-On Features

Netflix and Amazon are good examples – they let you access all their services using just one credential.

For instance, you can use your Amazon ID to place orders, access AWS services, or purchase books on Kindle. Similarly, you can purchase a single Netflix subscription and use the credentials to stream content from any of your devices.

But, wait… how does a single sign-on implementation improve NPS?

In rather simple terms, NPS is just a metric that evaluates the referability of your brand. The more referable your brand is, the better the NPS score.

By making users remember just one credential for accessing the entire ecosystem, you make the product experience simple and easy-to-use.

The counter-argument to using multiple login credentials has been that it makes the ecosystem secure and less susceptible to malicious attacks. But here’s the thing – should security come at the cost of convenience?

And even if you don’t consider that argument, think about this – if you have multiple login credentials for a single user, how are you going to accurately track customer behavior?

For example, if Amazon used different credentials to access different services, how would it accurately analyze brand advocacy? It’s perfectly possible for user X to love purchasing from Amazon but hate the Kindle experience. If he/she uses different login credentials to access these two services, there’s no way Amazon could accurately map the user’s behavior.

By associating a unique customer ID with every customer, you can accurately measure your NPS score and identify customer behavior (Promoters/Detractors/Passives). You can also personalize features, keep track of customer complaints, and deliver a consistent customer experience.

3. Amazing Customer Service

All these companies with high NPS scores offer a personalized, convenient, and satisfaction-oriented customer experience. People would argue they are some of the companies with the best customer service in the world.

Amazon employs large customer rep teams, makes it very easy for consumers to return items, and goes above and beyond to offer true customer satisfaction – whether it’s by letting people keep the items they accidentally ordered and shipping the right ones free of charge, or refunding small balances of 16 cents to customers when the price of an item they’ve previously ordered decreases.

When Netflix subscribers run into an issue, they know they will be talking with a real person on the other end – their employees are allowed to make their chats funnier and more engaging, which makes them more memorable for customers. Even the CEO would take calls every once in a while.

Starbucks focuses on making people feel like they belong to a community – even going as far as asking customers for ideas, and implementing some of them. For years, Starbucks had a dedicated platform, where customers could submit or vote for the most innovative ideas, which were then put forward to key decision makers. In the first 5 years, their customers generated more than 150,000 ideas and the company implemented 277 of those.

Starbucks baristas are also encouraged to remember customers’ names to make the whole experience feel more personal and create an ongoing customer relationship – a decent move, given that 75% of consumers are more likely to buy from a company that addresses them by name.

They also do not forget about the service basics which every Starbucks’ employee must master to be able to actually exceed expectations, create moments of connection and deliver inspired experiences.

Tesla’s personnel is heavily focused on customer convenience, with some reps even paying customers a visit if they live too far away from a service center. Tesla’s sales reps (also called Product Specialists) are on the company’s payroll and don’t get sales commissions, meaning there is never an incentive for them to pressure buyers to make a purchase.

As for Airbnb, their customer support is really straightforward and well segmented (since they have 2 different users – hosts and guests). The company goes to great lengths to ensure users are happy – even offering a $1 million guarantee for hosts! Here are other examples showing how far Airbnb is willing to go to please their users.

But the main thing that is common across these brands’ customer service departments is this:

Quick, Responsive Omni-Channel Support

All these brands focus on responding as fast as possible to consumer demands and complaints, which is a smart move given that around 32% of consumers expect a response to a complaint or review they left online within 30 minutes.

Besides that, these companies acknowledge the importance of omni-channel support. After all, over 35% of consumers expect to be able to contact a customer rep on any channel. Also, businesses with omni-channel support have over 91% greater year-over-year customer retention rates.

Having support reps answer phones and emails is a nice start, but many customers are likely to contact you on social media, too.

4. Unique, Innovative Products and Offers

Most companies with high NPS scores stand out from their competition by offering consumers a unique value proposition. After all, when you become a unique option within your industry, you’re no longer “another” choice — you’re the only choice many people will consider.

Most of the brands we’re discussing in this article have an innovative value proposition. No online store even comes close to matching the scale of Amazon. There’s no streaming service with a larger range of content than Netflix (although Amazon’s competing service comes close).

Tesla established itself as a huge source of innovation in the automotive market, and Airbnb is the go-to option for city breaks for many people worldwide. While Airbnb did not pioneer a unique concept, they made their brand stand out through unique-looking, engaging website design and by popularizing the idea of guests sharing a place while the host was also there.

As for Starbucks, they certainly didn’t come up with the idea of selling coffee, but they innovated the way it’s sold. As early as 2008, Starbucks publicly announced they were changing the way they made coffee to offer the best possible experience. The company made its brand more appealing and unique by adopting and promoting the homely coffee-house vibe people saw in shows like “Friends.”

One way to achieve such results is to encourage your employees to think creatively. For instance, Netflix encourages employees to come up with ideas about how to improve the company’s services, form groups to discuss said ideas with other employees, and then ask other departments for input. Google is another good example (even though it’s not present in this article), as they allow engineers to spend 20% of their work week on projects that interest them.

Moreover, look for ideas everywhere. That includes listening to your customers and your team. If you are using Net Promoter Score surveys, ask customers how you could improve your product or service when asking for feedback.

Netflix is a good example of what can go wrong if you don’t take customer satisfaction surveys seriously. Long story short, the company’s CEO – Reed Hastings – wanted to change a subscription service that offered access to DVD rentals and unlimited on-demand streaming by splitting it into 2 different services, each priced separately.

That would result in a 60% price hike for customers. When asked how customers might react to this, Hastings said there’d be minor backlash. That was a baseless claim, as no customer satisfaction surveys were performed prior to the decision.

After introducing the price hike, Netflix lost around 800,000 subscribers, and its stock price dropped by approximately 77%. The company obviously recovered, but that mistake almost cost them their business.

We’ve previously written about the importance of NPS for Product Managers, Growth Hackers, and Marketing Managers. We’ve talked about its value for providing valuable customer feedback that gives you plenty of ideas for product innovation. Listen to their thoughts carefully and choose the ones that best fit your needs and goals.

5. High Customer Loyalty and Word of Mouth Advertising

If customer success is the process of orchestrating your customers toward their desired outcome, brand loyalty is the end-result.

Brand loyalty enables you to eliminate price sensitivity, beat the competition and mitigate exorbitant marketing expenses. After all, why spend money on advertising when you can turn your customer’s social capital into your economic capital?

And that’s no speculation. It seems that increasing customer retention by just 5% can boost your profits by up to 25-90%.

NPS is nothing but the measuring scale of customer success, with brand loyalty as the measurement unit. The reason these brands have high NPS scores is because they have succeeded in building up immense brand loyalty:

• Tesla has an almost cult-like following;
• Netflix has the most loyal customers;
• Amazon’s loyalty rates are so good they eat into competitors.

Companies with a high NPS score have a lot of customers who love their brands so much they are more than willing to recommend them to their friends and family.

As a result, companies like Amazon, Airbnb, and Tesla have people doing marketing for them at no extra cost – bringing in more potential customers who already view the brand in a positive light. After all, around 74% of consumers say that word-of-mouth advertising is a key influencer on their purchasing decisions.

How do these companies achieve something like this? Well, here are the main things they do:

They See Consistency as the Main Key

Once you’ve created a unique product experience that people want to talk about, the next step is to be consistent in your efforts. After all, it takes months to win a customer, but only seconds to lose one.

Amazon provides great customer experiences, regardless of the size and frequency of your order. It doesn’t matter whether you order from the app or through the website – the shopping experience stays consistent.

Netflix lets you stream your favorite movies or shows at the same speed, regardless of your device, the movie genre, the time, or location. Tesla has consistently raised the bar in terms of product innovation, and has always made sure all their customers benefit from car redesigns, like when they changed the seats for all Tesla cars free of charge to improve owners’ comfort levels.

When a company consistently delivers great customer experience, they infuse customer loyalty and motivation to talk about those experiences.

They Offer a Personalized Customer Experience

Don’t underestimate the power of a personalized experience for consumers. According to statistics, 78% of online consumers say that personally relevant content from brands increases their purchase intent, and personalization can reduce acquisition costs to as much as 50%.

Also, according to Genesys Global Survey, 38% of customers believe personalization plays a vital role in delivering happy customer experiences.

How do companies with high NPS scores handle this?

Well, Netflix uses the power of AI and machine learning analytics for personalized video recommendations. Tesla’s buying process is very personal for consumers, and Starbucks’ loyalty program is focused on offering personalized rewards and offers. Plus, we already mentioned that Starbucks employees are encouraged to address customers by name and tailor their interactions to the individual customer.

And Airbnb is already looking into adopting machine learning so that they can offer users a more personalized travel experience.

All in all, personalization makes customers feel that you’re delivering a one-to-one customer experience, thereby improving user engagement and customer satisfaction. And it’s only logical that these happy customers are more likely to recommend your brand than unhappy customers.

They Build Up Their Reputations

According to the paradox of choice, customers feel less anxious when they have fewer choices to make.

For example, you would rather order stuff from Amazon than take the risk of trying a new online store. It’s because Amazon has built up the reputation of being the #1 online marketplace. Tesla has built its reputation as the most reliable provider of electric cars, and Netflix has its reputation as the streaming platform with the biggest content variety.

Starbucks at its turn, has built a reputation as a coffee mega-chain by standing true to more than 40 years of heritage and infusing the human connection into its strategy; as well as for their ongoing commitment to give back to communities through community stores or by encouraging local volunteering. 

Reputation is about building customer trust so that they feel comfortable sharing information and transacting on your platform.

It’s the most vital ingredient for brand loyalty because customers are unlikely to recommend brands that have a bad reputation or are not trustworthy.

They Focus on Accountability

“Divide responsibility and nobody is responsible.” – Edward Deming

Amazon has managed to practically kill ‘brick-and-mortar’ businesses by instilling great accountability into their business model. For instance, you can order anything from Amazon, and return it within 15 days if you don’t like it. If that’s not enough, Amazon even refunds customers the price-difference on items they recently bought.

Airbnb, like we already mentioned, offers hosts a $1 million guarantee. When Netflix changes pricing plans, they give existing members a price guarantee for a certain time, letting them use the pricing plan they initially chose. And Starbucks goes as far as offering a 60-day guarantee for its products.

Basically, people buy from businesses that have high accountability and credibility, as it reduces buyers’ anxiety and makes them confident about making future purchases.

They Capitalize on Employee Satisfaction

“You can’t expect your employees to exceed the expectations of your customers if you don’t exceed your employee’s expectations of management.” – Howard Schultz, Chairman and CEO at Starbucks

There is little to no chance of amazing customer experiences without happy and proactive employees that will go above and beyond. Only engaged and motivated employees can be committed to a company’s success.

Looking into the numbers, highly engaged teams achieve a 10% increase in customer ratings and a 20% increase in sales. They are more productive, relate better with customer needs, and hence are better at engaging and retaining customers. Summed up, these capabilities result in 21% higher profitability. 

Starbucks understood in their early days the huge impact employee satisfaction has on the overall customer perception of a brand. With the creation of the Bean Stock in 1991, Starbucks  made their employees partners, giving them ownership in the company, sharing the company’s success and thus strengthening their relationships.

Moreover, Howard Schultz vowed to leave no one behind – commitment that stemmed from his childhood experiences. This instilled a vision to treat people like family who at their turn would pour their heart into making the company better.

This vision led Starbucks to create one of the most competitive benefits and compensation packages. They have communication systems in place like Ethics & Compliance Helpline – a line which is open for calls around the clock for partners to share their concerns anonymously. 

To let partners know they are deeply valued, Starbucks set up various recognition programs and awards such as Coffee Master Awards, Spirit of Starbucks or Bravo! awards for exceeding customer service standards or increasing sales.

According to Airbnb, a world where anyone can belong anywhere starts with a workplace where you feel welcome. Every effort in terms of employee satisfaction is thus directed towards creating amazing physical, emotional, intellectual, virtual and aspirational experiences for the Airbnb staff. 

The brand opted for a shift from Human Resources to Employee Experience, an approach pioneered by Mark Levy – former Global Head of Employee Experience at Airbnb – and his team. The impact of such an approach is reflected by great employee satisfaction levels, with 90% of Airbnb employees recommending the company as a great place to work at.

Amazon was ranked #2 on Forbes World’s Best Employers 2020 list. During the COVID crisis, on top of the $15 minimum wage and other benefits, they launched new initiatives like developing their COVID-19 testing capacity and launching a $25 million relief fund to support partners during the crisis.

Promoter companies continue to put all their effort into the team’s well-being, aware that happy employees create the best customer experiences. eNPS surveys are great for this purpose, since they allow you to keep a pulse on employee satisfaction at all times. Starbucks for example runs a Partner View survey yearly to learn more about employees’ concerns and their satisfaction with their job.

Want to Find Out What Your Own NPS Is?

Before you start making any policy and service/product changes, it’s best to find out roughly how many Detractors, Passives, and Promoters you have, so that you attempt adjustments that really matter to your customers.

You might think that finding out the NPS score of your company can be difficult, but it doesn’t have to be – if you use an automated platform like Retently. We make it very easy to send targeted NPS surveys to your customers by giving you the ability to segment them into different categories.

Also, Retently lets you customize your surveys to your heart’s content, set up automation scenarios, and survey customers through multiple channels – like email or in-app surveys. Best of all – you can integrate our platform with other services you use to automate the feedback-gathering process even further.

So, feel free to browse our plans and see which ones work best for you.

The post What Do Companies with High Net Promoter Score Have in Common? appeared first on Retently CX.

Table of Contents

• Key Takeaways
• What Are the Reasons Behind Apple’s NPS?
• Find Out Your Company NPS

Apple’s customer satisfaction and loyalty have been growing steadily over the years, reflecting the way consumers view the brand. According to NPS Benchmarks, Apple’s NPS score in 2022 is a resounding 72, which is significantly higher than the average NPS score of the consumer electronics industry.

Apple’s continual focus on improving its Net Promoter Score has produced significant results for the company. In 2007, its NPS was a respectable 58. As of 2016 through 2017, the company had an NPS of 72 – one of the highest in the technology industry – following a decrease in 2018 to a score of 63.

And, although their NPS seemed at risk due to the pandemic, as most companies took a considerable hit, Apple was more than ready to keep up with customer expectations and stay on top of their mind – registering a record fiscal year in 2020. 

The company not only managed to excel at creating an omnichannel customer experience, but to also give back to the community, for example by partnering with Google on the Covid-19 contact tracing technology. Apple made sure to be close to its customers at all times and meet the new challenge with the same creativity and passion. Hence, the brand was granted an NPS score of 72 in 2022 – NPS which streamed confidently upwards over the past 3 years.

Why is Apple’s Net Promoter Score important, you ask? Because NPS is related to a company’s growth and customer retention levels. The score showcases how many people are happy with your brand, and how many actually promote it. And if they do the latter, it’s safe to assume those people are loyal customers.

Key Takeaways

• Apple’s NPS reflects its commitment to customer satisfaction, continuous innovation, and unique experiences that drive strong brand loyalty.
• Employee satisfaction and meticulous attention to product and service details enhance engagement and reinforce a culture of excellence.
• Seamless, personalized experiences across devices and support channels consistently meet customer expectations, boosting satisfaction and NPS.
• Apple’s feedback-driven, customer-centric approach fosters long-term relationships and industry-leading loyalty.

What Are the Reasons Behind Apple’s NPS?

Understanding what led to Apple having such a high NPS can give you an idea of what you could focus on to achieve similar results.

Apple’s NPS score isn’t a coincidence, after all. It’s the result of an incredible focus on delivering a great product and an exceptional experience to customers – something Apple, as the world’s largest tech company, has turned into a streamlined process.

Apple’s Net Promoter Score is very high for a company in its industry, but it’s not unattainable for other brands. By understanding why and how Apple achieves high customer loyalty, you can create a process that improves customer satisfaction in your own company.

Whether you run a technology business or have an unrelated brand and want to learn from Apple’s amazing success, the factors below can help you improve your customer loyalty and retention:

1. A Focus on Relieving Purchasing Anxiety

One of the most frequent reasons customers don’t purchase something – especially an expensive or unique product – is anxiety about whether or not it will work as it should. Concerns that getting an answer from the company might be difficult if the product doesn’t work properly also come into play.

Apple neutralizes this anxiety through its customer service, letting clients know that for any product they buy, they’ll receive the support they need to the fullest. Brian X. Chen, New York Times, pointed this out, arguing that any product review is worthless without an understanding of the company’s customer service. Customers make the purchase based not just on the quality of a product, but on the quality of the service that accompanies it.

For one, the company offers a 1-year warranty on all its products. If the products malfunction during the warranty period, Apple will repair them at no extra charge or replace them with a free product.

On top of that, buying from Apple also doesn’t feel like a risky experience to people simply because of its huge network of retail stores. If there are any issues with their product, people know they can easily make a reservation at their local Genius Bar, and take the product in for support.

Besides that, Apple customers also know they can rely on Apple-authorized service providers and Apple Repair Centers if the Genius Bar just isn’t an option.

Apple’s Support Page helps with this, too. It contains tons of straightforward self-help content. For some people, reading an article is a much easier task than connecting with customer service reps.

The company also introduced the Apple Support App, offering customers personalized access to solutions for all their Apple products and services – the “all for one” app, as some users define it. Customers can easily manage their subscriptions, reset the Apple ID password, or troubleshoot an issue with a real person if they can’t find a description that explains their pain point. 

All of that has a huge positive impact on relieving purchasing anxiety, which eventually ends up contributing to Apple’s NPS.

2. An Obsessively High Attention to Details

Apple doesn’t just stick to offering quality and reliable products. The company goes the extra mile and pays a ton of attention to the smallest details.

And consumers notice that. In fact, if you google “Apple attention to details,” you’ll come across tons of articles talking about the brand’s “fanatical” and “insane” obsession with details.

Here are just some examples to show you what we mean:

• The Apple Pencil’s weight is distributed in such a way as to ensure that no matter which way it’s placed, it always rolls over to display the word “pencil.” Its weight distribution also reduces its momentum when rolling, thus reducing the risk of it rolling off the table.
• Pretty much all Apple notebooks have a slight indentation in the area right below the trackpad to make it easier for Apple users to open the laptop with just one hand.
• Newer Mac laptops feature a “smart” fan. Basically, when a user engages the voice dictation feature, the internal fan’s speed is automatically slowed down a bit so that the laptop can better hear the user speaking.
• MacBook Air and newer MacBook Pro devices have a “smart Caps Lock” feature. Apple essentially prevents accidental Caps Lock keystrokes by requiring users to hold the Caps Lock key a bit longer for it to turn on.

Apple’s attention to detail goes beyond the products to the packaging and the experience attached to it. The company doesn’t just deliver the purchased items in standard cardboard packaging – it goes above and beyond and puts just as much attention to detail into its packaging as it does into every product.

How much attention, you ask? Consider this – the company has a dedicated packaging designer who spends months opening prototype boxes made by Apple’s designers. A lot of testing goes into making the packaging a joyful experience for the customer.

The result is that buying and opening an Apple product is a sensory experience. From the first interaction with an Apple product – in this case, opening the box – customers have a sense of Apple’s attention to detail and design philosophy.

This relatively small factor can have a big effect on purchases, as it might help the company stand out from its competitors by delivering a unique experience to its customers.

This experience is closely linked to the product itself. The sensory response of opening up the box and first using the product is an event that customers subconsciously remember each time they use an Apple product.

Going forward, no compromises are ever made when it comes to Apple Stores either. Steve Jobs’ belief was that “details matter, and it’s worth waiting to get it right”. For example, the team spent 3 months developing the stainless steel wall panels that first appeared in Stanford stores, achieving what seemed impossible – a matte yet reflective surface.

One of Apple’s strengths is best expressed through a simple rule: “Sell an experience, not a product.”

Buying, opening, and using an Apple product is a memorable experience for people, not just a consumerist tendency – which is a major factor that influences Apple’s NPS.

Yet, what one must not forget is that a unique customer experience relies on the people that are behind Apple’s products and services. Hence, the company makes sure to instill this approach to excellence to its staff through every decision.

Apple’s new campus is a unique example in this respect – a technical marvel that embodies the company’s values. The project received much criticism due to its grandiosity, but as Tim Cook explained: “Could we have cut a corner here or there? It wouldn’t have been Apple. And it wouldn’t have sent the message to everybody working here every day that detail matters, that care matters.” 

3. A Focus on Employee Satisfaction

If you’re not familiar with eNPS, it stands for Employee Net Promoter Score, and it’s a derivative of the NPS methodology. The surveys work pretty much the same way, but instead of focusing on customer satisfaction, they focus on employee satisfaction.

Basically, eNPS helps you find out how happy your employees are working at your company, and how likely they are to recommend your business as a working place to others.

Why is that relevant? Because happy, satisfied employees are productive employees! According to research, happy employees are 20% more productive than their unhappy counterparts. And that boost was achieved by just spending $2/person on snacks and drinks!

Plus, companies with engaged employees outperform businesses without engaged employees by a whopping 202%. What’s more, companies with highly engaged employees can see a revenue growth of around 2.5 times that of their competitors – not to mention high employee engagement can also reduce expensive staff turnover by approximately 40%.

And if your employees are happy and productive, your customers will be satisfied too. If employees are unhappy, eNPS lets you know about that so you can take action.

Now, Apple was actually one of the first companies to adopt eNPS. Apple began surveying its own employees every four months to find out how likely they would be to recommend the store as a place to work.

The company recognized the importance of employees being Promoters themselves. After all, only an employee who truly believes the service they are selling is the best in the market can turn a customer into a Promoter.

The eNPS score is calculated the same way as the NPS score, with the total ranging between -100 and 100. Apple’s eNPS score in 2024 seems to be 18, taking a step back from an eNPS score of 25, registered in 2018. That might not seem impressive, but it’s actually a pretty good score, given that eNPS is usually lower than NPS since employees are stricter critics than customers.

But how does Apple achieve high employee engagement?

Here are a few things the company does to keep employees happy and motivated:

• When employees work in teams, rewards are applied to team performance.
• Apple created a culture of fandom at work by letting employees use company products regularly, giving them discounts, and even some products as gifts.
• Apple offers employees regular training sessions to improve their skills and help them develop better ideas. What’s more, the company created a corporate university designed to instruct its employees in the various aspects of the company’s technology and culture, preparing the next generation of Apple leaders. Although there is little information on the available courses, some of them would focus on: Communicating at Apple, Project Management, Vendor Management, What Makes Apple, Apple. Employees can sign up for courses relevant to their positions on a voluntary basis.
• At Apple, employee contributions are not measured by how long they worked at the company, but by how many projects an employee has worked on. Also, the best ones are always rotated between current projects.
• Apple employees can get a raise without a promotion. For example, a designer could get a raise without being promoted to a team manager if it’s not the kind of job they’d be good at or happy doing. Apple focuses on having people do the jobs they are best suited for.
• Apple introduced new channels of communication, like the “Hello” app, delivering a daily summary of the need-to-know information for retail employees. Another example is the “Loop” app which enables peer-to-peer communication and learning by exchange of best practices.
• The brand invests in building an environment for its employees that reflects Apple values and that would inspire them to match the effort in the products they create and the customer service they provide. 

With over 530 retail stores worldwide and 161,000 employees as of 2024, keeping such a big team constantly engaged and loyal to the company’s values might seem an impossible task to accomplish. However, Apple has consistently proven the opposite, the company always being recurrent on the Top companies to work for charts.

4. Unique Customer Experiences

It was predicted that by 2020, customer experience would overtake price and product when it comes to brand differentiation on the market – which actually turned true years past.

Yet, Apple was more than prepared for this shift. A simple Google search is enough to reveal how many Apple customers are pleased with the unique experiences the brand offered them – like replacing a phone for free because a customer waited too long for the problem to be diagnosed, or replacing a month-old computer with a brand new one because a key was depressed for someone who was going to college.

These experiences are usually a result of Apple’s 5 steps of service (the acronym for those steps is actually APPLE). The 4th step (“Listen for and resolve issues or concerns”) encourages employees to get to know their customers better so that they can offer them a higher degree of convenience and personalization.

The fact that convenience is important is a no-brainer, but what about personalization? Well, according to research, 51% of consumers expected that – by 2020 – companies would manage to anticipate their needs and make relevant suggestions based on that. Four years past, the research accounted for 66% of customers expecting companies to understand their unique needs and expectations. Also, increasing personalization on more channels can increase consumer spending by around 500%.

Apple doesn’t just deliver personalization in the form of unique customer service. The brand’s services are usually highly oriented towards offering users a personalized experience.

For instance, Apple Music uses personalization to pick the best soundtracks for every user. Apple also utilizes user info like purchase and download history to make what they call “Personalized Recommendations” on the App Store and iBooks Store.

Customer feedback plays an important role in user-oriented personalization too. For Apple, feedback is clearly important, given they make it very easy (and also encouraging) for customers to leave feedback for most of their products and services.

5. A Clear Understanding of the Power of Simplicity

“That’s been one of my mantras – focus and simplicity. Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple.” – Steve Jobs

One of the best ways to provide consumers with a positive experience with your brand is to offer simplicity. Research backs that up too – consumers desire simpler, faster, and more seamless brand engagement.

Apple’s emphasis on simplicity is immediately noticeable when you consider that most Apple services support single sign-on features. For instance, you can use your Apple ID to access all services hosted by Apple, which is much more straightforward than having users keep track of multiple IDs to use different services.

Or you can start working on a task on your MacBook and then finish it on your iPad. The brand understands that it’s important to ensure continuity via a seamless experience across devices, and they are managing this pretty well, given the complexity of the task.

Apple’s focus on simplicity is also noticeable when you take their omnichannel support into account. Customers can get in touch with Apple’s support team through live chat, email, or by phone. But that’s not all – the company also offers support on Twitter and has a dedicated YouTube support channel .

Apple also launched the Tips app – as the title implies – offering great tips and tutorials about different features, hence educating their users so they can make the most of the purchased product.

The “Everyday Experiments” series on YouTube uses content shot on iPhones to showcase specific features, helping users maximize the product’s potential for creativity and innovation. This approach displays product capabilities while highlighting the seamless integration of technology into daily life and strengthening emotional connections with the audience.

How does omnichannel support contribute to high customer satisfaction, you ask?

Well, it seems that companies with omnichannel engagement strategies manage to retain around 89% of their customers, and 64% of consumers expect to receive real-time assistance regardless of the channel they use. Offering this type of support is more likely to get your customers to promote your brand to others.

6. A Brand Built on Innovation

One of Apple’s biggest selling points is its unique hardware and software. The main reason they manage to offer products like that is because they focus on innovation. By that, we don’t mean they just create products that are new. They also make sure they are useful, they are likely to be adopted, and that they will lead to change.

The AirPods and Apple Watch are great recent examples of the company’s ability to innovate on the market. What’s more, even though the AirPods were met with skepticism, Apple powered through it and delivered on their promises. And when users noticed problems with the product, they were quick to act on that feedback.

On its path to innovation, Apple did encounter many difficulties and there were for sure faulty decisions that harmed its image. Among them were the cancellation of the AirPower Charger because it could not live up to their standards, or the butterfly MacBook keyboards that have caused a lot of buzz. However, after trying to deliver on their promises but failing to, they could honestly admit they were wrong and focus their efforts on a new idea. They were aware that “sometimes when you innovate, you make mistakes. It is best to admit them quickly, and get on with improving your other innovations.” – Steve Jobs

The brand never ceased to progress. Apple was always looking for new opportunities and new ideas, aiming to give customers not only what they want, but also anticipating their needs. Hence, they were ready to lose sight of the shore – of what was popular with many users, in order to be able to come up with better and bolder solutions. Today, 89% of successful businesses agree that predicting customer needs is critical to growth. 

Apple is one of the most innovative companies in the world, claiming 2,536 patent grants in the US in 2023. They are spending the biggest part of their revenue on research and development. Their research expenses for 2023 were $29.915 billion, a 13.96% increase from 2022 – an upward trend that started in 2003.

Is innovation tied to Apple’s NPS, though?

Yes, it seems it is. According to research, 84% of consumers say it is somewhat important that the company they buy from is innovative. 75% of them would also be likely to pay a premium price for innovation.

And if consumers are happy with the products they buy, they will probably recommend them to others or just talk about them online. As a result, those customers will most likely become Promoters for the brand they like, raising its NPS score.

Considering all of that, it’s not hard to see how Apple’s NPS score can get a boost from its innovative products.

7. Continued Improvement of Customer Satisfaction

Contrary to the common belief that Apple doesn’t like to listen to its customers, Apple was one of the first big proponents of the Net Promoter Score. Fred Reichheld’s popular book, The Ultimate Question, explains how Apple used Net Promoter Score prior to 2006 to influence its practices.

A focus on continually improving and increasing the Net Promoter Score affects every level of work at Apple, from the big picture to day-to-day store operations. Reichheld explains how Apple puts NPS to work in the management of its retail stores:

“Comments from customers help store managers prepare for service recovery calls with Detractors to close the feedback loop. The outcomes of these calls, together with the customer comments, provide important coaching and feedback messages that are passed along to employees.”

NPS feedback is analyzed and provided to stores on a daily basis. Whenever Apple receives a poor score from a Detractor, the store manager follows up over the phone to clear up the issue within 24 hours. The response is rapid, and it has serious positive results for Apple’s ratings.

According to Reichheld’s book, internal studies showed that Detractors whom Apple contacted within 24 hours were significantly more likely to buy Apple products in the future than Detractors who couldn’t be reached. Apple found that each hour on the phone with a Detractor had a value of $1,000 in additional revenue for the company.

8. An Ecosystem of Integrated Products

Apple’s high customer loyalty and impressive NPS are largely driven by the tightly integrated ecosystem of products. The way their products – like the iPhone, iPad, Mac, and Apple Watch – work together so seamlessly is a big part of why customers stick around. Think about features like AirDrop, where you can easily share files between Apple devices, or Handoff, which lets you start something on one device and pick it up on another without missing a beat. iCloud goes beyond just storing files; it syncs your entire digital life – photos, documents, apps, and settings – across all your Apple products.

This smooth experience makes life easier and encourages people to invest in more Apple products, which only strengthens their loyalty to the brand. As of 2024, there are over 2.2 billion active Apple devices out there, and more than half of Apple users own more than one.

Moreover, Apple’s focus on ecosystem development has resulted in substantial financial growth, as seen in Q3 2024, where services revenue reached an all-time high of $85.8 billion. Apple’s customer retention rates, especially for iPhones, are consistently above 90%, which speaks volumes about how effective this ecosystem strategy is.

“The Apple ecosystem is real and cross-selling works. It is the rare Apple customer who only owns a single Apple hardware device. With iPhone and to a lesser extent iPad as the entry point, Apple has succeeded in gaining device share among its customers.” – CIRP Survey

The Apple Ecosystem Today – CIRP – Apple Reports

By making all their products play so well together, Apple not only keeps customers happy but also keeps them coming back for more.

9. Focus on Social Responsibility

Apple’s branding strategies in 2023 have really leaned into social responsibility, and it’s paying off in terms of customer loyalty and NPS. They’ve smartly aligned their marketing with issues that matter to people today, like sustainability and inclusivity, which helps them connect on a deeper level with their audience.

Take the “Mother Nature” campaign, for example. This campaign wasn’t just about selling products – it highlighted Apple’s commitment to the environment, showcasing their goal to achieve carbon neutrality by 2030. They’ve already cut their carbon emissions by over 45% since 2015, which is pretty impressive. This kind of transparency and action resonates with customers, especially since 44% of consumers say they’re more likely to buy from brands that show environmental responsibility.

Apple is also big on diversity and inclusion, both within the company and beyond. Their workforce includes 43% women and 65% underrepresented minorities, and they’re actively working to create an inclusive environment. Plus, their $100 million Racial Equity and Justice Initiative is making strides in promoting racial equity in education, economy, and criminal justice.

They haven’t stopped there – Apple is also leading the way in accessibility. With features like VoiceOver and Magnifier, they’re making sure their products are usable by everyone, earning them praise for their efforts.

By integrating social responsibility into everything they do, Apple is building stronger, more loyal customer relationships – key ingredients for maintaining their NPS.

10. Focus on Customer Value, Not Money

“There’s this thing in technology, almost a disease, where the definition of success is making the most. How many clicks did you get, how many active users do you have, how many units did you sell? Everybody in technology seems to want big numbers. Steve never got carried away with that. He focused on making the best.” – Tim Cook

Research by Deloitte and Touche found that customer-centric companies were 60% more profitable compared to companies that were not focused on the customer.

If Apple’s main focus was on making more money, they probably wouldn’t have been so successful now. Instead, they focused on their customers and it has paid off.

Today, Apple is one of the world’s most successful and profitable technology companies. It holds over 40% of the US smartphone market (48,6% in 2022 to be precise) and has a fantastical 87% brand loyalty across the US and Europe.

So think less about profit and more about customer value. How your company and your product or service can create more value for your customers.

Find Out Your Company NPS

Apple is one of the world’s biggest companies, and the tactics that it uses to measure its NPS might not be completely relevant for your business; however, the general strategy – a unique product backed up by great customer service – is something that any brand can implement.

From Apple to other industry-leading companies, the best way to learn retention from big companies is to survey your customers, read their feedback and use it to improve your product, service, and experience.

Having access to such data can help you make better decisions regarding how to approach customers, and which segments (Promoters, Passives, Detractors) you need to focus on more at the moment.

While running NPS surveys can seem difficult if you don’t have any experience with them, the reality is that they’re quite easy to manage – if you use the right NPS software, that is.

Well, Retently has got you covered – it lets you run automated NPS surveys, segment your customers to send targeted surveys, and use multiple survey channels (like email and in-app surveys). Best of all – you can easily set up automation scenarios, run transactional NPS campaigns, and integrate our service with tons of useful platforms and tools.

The post The Reasons Behind Apple’s Customer Loyalty and High NPS appeared first on Retently CX.

Table of Contents

• Key Takeaways
• 1. Adopting NPS as Part of Their Ongoing Customer Satisfaction Program
• 2. Motivating Employees to Care About Customer
• 3. Putting the Customer at the Heart of the Business
• NPS Is Your Key to Improving Customer Loyalty

Rackspace is a respected managed hosting company that strongly focuses on the commitment to their customer experience strategy, also called Fanatical Support®. This reputation helped them grow into one of the largest infrastructure providers with a revenue run rate of more than $1 billion and an incredible Net Promoter Score® of 58.

The way Rackspace measures and manages Fanatical Support is by putting Net Promoter System® at the very core of its DNA.

In his interview, Julian Lopez, Director of Customer Loyalty at Rackspace, explains,

“Net Promoter is the method that we use to take Fanatical Support and operationalize it by constantly measuring ourselves by this standard: Are we delivering a product that our customers are proud of?”

There are three key elements that Rackspace uses to achieve such a high Net Promoter Score.

Key Takeaways

1. Rackspace uses NPS as a core part of its customer experience strategy, adapting it to meet departmental needs and track changes in customer loyalty over time.
2. The company emphasizes hiring employees who share its customer service values, training them in five key elements: responsiveness, ownership, resourcefulness, expertise, and transparency.
3. Rackspace’s leadership actively reviews NPS feedback to guide strategic decisions, while focusing on direct communication to build lasting customer relationships.

1. Adopting NPS as Part of Their Ongoing Customer Satisfaction Program

NPS is a metric that measures customer loyalty by asking them to answer one simple question: On a scale of 0-10, how likely are you to recommend Rackspace to a friend or colleague?

Here, Mark Roenigk, the Chief Operating Officer of Rackspace, shares that they’ve been asking this question in one form or another as far back as 2003-2004.

However, they quickly realized that just asking the question and calculating a score was simply not enough. So they started tracking customer responses over time to detect positive or negative shifts in their satisfaction score.

By continuously measuring customer satisfaction, NPS was far from being just a static number for them. Instead, it was a real-time assessment of the company’s performance and success that reflected customer trends and changing preferences.

In 2008, the program evolved a bit more. Since then, they’ve remained loyal to NPS, slightly changing their approach while making sure each department has customized aspects of the program to fit their needs.

2. Motivating Employees to Care About Customer

Angus Dorney, Rackspace’s GM, stresses that HR plays a key role in maintaining its culture of customer service through finding and keeping the right people.

It all begins with hiring the right people who possess the right skill set to provide great customer support. When interviewing candidates, Rackspace looks for people who share the same vision and are passionate about the company’s mission, followed by technical skills and capabilities.

If a person is a culture fit at Rackspace, then motivating them becomes much easier. As a result, it hires only one person for every 17 interviews it conducts.

Once hired, the candidates go through the so-called Racker Rookie Orientation, a three-day long onboarding process for new employees. There, new Rackers (that’s how Rackspace employees call themselves) are educated on the company’s mission and the 5 elements of Fanatical Support:

1. Responsiveness

• Rackspace customer support team is available 24x7x365
• Customer Support is accessible by phone or ticket at all times
• They take special care to assist customers with an urgent request

2. Ownership

• They take personal responsibility for the customer’s hosted Rackspace infrastructure or services
• Rackspace empowers its employees to make decisions and take actions
• A live escalation contact is available to customers at all times

3. Resourcefulness

• Rackspace employs creative and practical solutions for customer’s hosting service, including items related to the network, hardware or operating system.

4. Expertise

• Rackspace has subject matter experts available that know how to identify problems and offer solutions
• Support teams will provide advice to any customer about the Rackspace environment or services based on industry and technology expertise

5. Transparency

• Rackspace customer support team actively listens and provides customers with direct and individualized communications
• Rackspace communications and conversations are not scripted, but are personal responses addressing customer’s specific needs
• Their answers to customer questions are straightforward and honest, and they do not avoid tough questions

Rackspace also uses NPS to examine their internal employee engagement and loyalty, as well as their internal performance on back office functions. They believe that understanding satisfaction within their own company provides a steady stream of feedback to identify and prioritize issues early.

They were among the first companies to recognize the importance of employees being Promoters themselves. Only employees who are truly enthusiastic about the service they are selling can turn a customer into a Promoter.

3. Putting the Customer at the Heart of the Business

The most important goal for Rackspace is achieving high customer satisfaction and building long-lasting customer relationships. But in the world of big companies, it can become more and more difficult to manage it back to simple.

Simplicity is one the main reasons Rackspace chose Net Promoter Score. Of course, there can never be enough analysis, reports and metrics, but the true value comes from simply listening and responding to your customers.

“Whatever method you choose to measure customer engagement and satisfaction, don’t over-complicate it, and don’t expect it to be the perfect metric,” said Lopez.

Find a way to listen to your customers and then use that feedback to fuel growth and build a strong brand. Use their recommendations to improve your product and service.

Just by feeling that their voice matters, customers will be more inclined to provide feedback and, hence, be more loyal and satisfied. They will become another advertising force for the company and tell their friends about Rackspace.

In that same interview, Roenigk shares that Lanham Napier, Rackspace CEO, reads open-ended responses every day and sometimes personally replies to some customers. The Rackspace Board of Directors also reviews NPS feedback in their quarterly meetings.

It’s one of the ways they keep a pulse on what customers think and feel. Lanham believes the path to success comes through earning 10 out of 10 on the Net Promoter survey. His specific quote is:

“Greatness is achieved when customers say we are great.”

This philosophy guides Rackspace in its efforts to integrate innovative solutions while keeping the customer at the forefront.

Leveraging AI for Personalized Customer Engagement

Rackspace transforms customer engagement with AI to deliver personalized and efficient service. Their Foundry for AI by Rackspace (FAIR) initiative turns AI concepts into practical applications, allowing for real-time data analysis and tailored customer interactions.

By automating routine tasks, Rackspace’s AI integration frees up staff to handle complex issues, enhancing efficiency and service quality. This approach strengthens customer relationships and boosts Rackspace’s NPS, showing commitment to customer-centric innovation. Customers who receive responsive and personalized service are more likely to recommend the company.

Flexible Multicloud Strategies for Better Customer Experience

With 85% of organizations now using multicloud environments​, Rackspace has responded by refining its multicloud management approach. They offer consulting and advisory services focused on cloud adoption, application modernization, and security enhancements.

Rackspace’s expertise in multicloud environments positions them as a leader in delivering tailored, customer-centric solutions. They help businesses integrate multiple cloud environments seamlessly, ensuring cost efficiency and scalability​.

Elastic Engineering for Responsive Service Delivery

Rackspace’s Elastic Engineering model shifts from traditional managed service agreements to more flexible, project-based engagements. This model allows clients to access on-demand expertise and tailor services to specific project needs. By removing long-term contracts and focusing on outcome-based solutions, Rackspace improves client engagement and responsiveness​.

Strengthening Cloud Security and Data Management

In response to growing cybersecurity concerns, Rackspace has prioritized cloud security and data management as core components of its service offerings. With 80% of security exposures occurring in cloud environments, Rackspace implements robust security measures to address such vulnerabilities as misconfigurations and unauthorized access​.

By leveraging advanced security strategies and AI-driven solutions, Rackspace protects customer data against evolving threats. This focus on security not only builds trust but also contributes to Rackspace’s high NPS by safeguarding client assets and enhancing the overall service experience​.

NPS Is Your Key to Improving Customer Loyalty

People are your most valuable asset. They’re some of the best leading indicators of a company’s overall health and value. Collecting their feedback is crucial to your company’s future growth and success.

But gathering data is useless if you don’t act on it. With Retently NPS you don’t have to worry about the hassle of manually creating your NPS survey, keeping track of customer feedback, and building reports.

With an easy-to-use user interface and intuitive design, you can now get actionable insights on how to increase your customer lifetime value, reduce churn, and improve brand loyalty.

The post Rackspace’s Strategies for Achieving the Highest NPS in the Hosting Industry appeared first on Retently CX.

Table of Contents

• Key Takeaways
• The Secrets of Amazon’s Success
• Complex, yet Simple

From its humble beginnings as an online bookseller, Amazon has grown to become one of the world’s largest ecommerce businesses. But unlike many massive multi-national organizations, Amazon remains incredibly popular with its customers.

In fact, so popular that:

• Amazon is ranked #2 in the Top 100 Retailers 2023 List with $343.33 billion in worldwide retail sales.
• It is expected to capture over 40% of the U.S. ecommerce market, reinforcing its top position. 
• Amazon maintains an NPS 60% higher than traditional retailers like Macy’s and was ranked the most trusted US brand in 2022.
• Customers complete 28% of Amazon purchases in 3 minutes or less and 50% of purchases in less than 15 minutes.
• Amazon ships to customers in over 100 countries and regions.
• According to Prosper Insights’ survey, Amazon attracts about 80% of Macy’s frequent shoppers during the holiday season.

Amazon has redefined the meaning of the shopping experience. Now shoppers don’t need face-to-face communication to make a purchase and gain public trust. Good pricing, product reviews, fast shipping, and easy returns seem to have replaced traditional shopping.

Let’s explore specific use cases and uncover practical approaches to an impressive NPS, following Amazon’s example.

Key Takeaways

• Amazon’s ongoing investment in technology and its willingness to learn from failure have driven successful innovations like Amazon Locker, Echo, and FireTV.
• By leveraging customer data, Amazon tailors shopping experiences with personalized recommendations and marketing.
• Amazon Prime’s comprehensive benefits, including free delivery and exclusive content, strengthen customer loyalty and increase spending.
• User-friendly self-service tools allow customers to resolve issues on their own, saving time and making the experience smoother.

The Secrets of Amazon’s Success

Amazon’s journey to success has been long and challenging. For years the company posted little or no profit while refining the technology and processes that power its current success.

The good news? Your business can “borrow” many of these techniques to boost your customer satisfaction ratings. Here are some to consider.

1. Investment and Experimentation

Amazon has never been shy about spending money. The business invests vast sums in ensuring that its back-end processes are as efficient as possible. It also spends a lot on research and development, building new products and services it believes will be of value to customers.

This willingness to experiment is combined with a willingness to fail, too. While no one likes failing, it comes with the territory. The Amazon Fire Phone released years back was not a hit with customers, reporting a $170 million loss.

Yet, Jeff Bezos, then CEO of Amazon, explained that “as a company grows, everything needs to scale, including the size of your failed experiments. If the size of your failures isn’t growing, you’re not going to be inventing at a size that can actually move the needle…The good news for shareowners is that a single big winning bet can more than cover the cost of many losers.”

While the phone was unsuccessful, they learned valuable lessons that have served them well when working on devices like Echo and FireTV.

On the other hand, Amazon Locker, which allows customers to collect packages from secure locations because they cannot take delivery during office hours, has been an unqualified success, also enhancing Amazon’s NPS.

Amazon does have the luxury of very patient shareholders and investors, allowing them to spend much more than their competitors. For smaller companies, funding needs to be controlled more tightly – but that does not mean sacrificing the capacity for experimentation, especially if the customer experience is compromised as a result.

How to Implement Following Amazon’s Lead

• Prioritize Key Investments:  Focus your spending on areas that enhance customer satisfaction and boost operational efficiency. Even with limited resources, strategic investments can deliver substantial returns.
• Encourage Experimentation: Create an environment that encourages innovation, allowing your team the freedom to explore new ideas through trial and error. Create a safe space where employees can propose and test innovations without fearing failure.
• Learn from Failures: Treat every failure as a valuable learning opportunity. Analyze missteps to refine and improve future projects.
• Balance Risk and Reward: Take strategic risks by ensuring each experiment has the potential for significant rewards, despite the possibility of failure. Allocate resources wisely to support both ongoing operations and new ventures.
• Leverage Customer Feedback: Use customer feedback to guide your innovation efforts. Understanding customer needs and challenges can help develop solutions that are more likely to resonate and succeed.

2. Personalization Everywhere

By carefully monitoring how customer interactions unfold on its website, Amazon builds a very detailed, highly accurate picture of its individual customers. This information then forms the basis of every email and marketing effort.

Shoppers using the Amazon website will see a list of recommended products at the bottom of every page, including items they have previously browsed but not purchased. This is followed by regular emails encouraging shoppers to return and make more purchases.

New products like Alexa and Echo will only help to enhance this profile creation further. By listening to their owners, these devices feed real-time information back to Amazon allowing them to add extra context to profiles that cannot be collected by website usage monitoring alone.

Also, if you have registered a complaint with Amazon, you don’t have to tell the same story next time you reach out to them. The records of customer complaints are persistently stored in Amazon’s centralized database, and can be accessed conveniently by any customer service executive.

Building on its legacy of innovation, Amazon announced updates to its artificial intelligence capabilities on July 10, 2024, reinforcing its leadership in the competitive AI market where investor interest remains high. The updates include smarter AI agents that can remember whether a user prefers aisle or window seats during flights – a new feature reflecting Amazon’s commitment to personalization.

Moreover, the company has refined its Q chatbot, introduced last November, to provide more advanced code-writing suggestions, addressing the growing demand for generative AI tools. These improvements, driven by machine learning, aim to sharpen customer behavior analytics, ultimately boosting NPS scores by delivering even more tailored experiences.

How to Implement Following Amazon’s Lead

• Analyze Customer Data:  Start by gathering and analyzing data on how customers interact with your website or services. This information can be used to build detailed customer profiles, offering insights into their preferences and behaviors.
• Personalize Recommendations: Deploy advanced systems designed to suggest products or services that align with past customer behaviors. Feature these personalized recommendations on your website and within follow-up email campaigns to increase visibility and engagement.
• Centralize Customer Records: Maintain a centralized database to log all customer interactions, including any complaints. This repository should be easily accessible to customer service representatives, enabling them to offer seamless support based on comprehensive historical data.
• Engage Regularly: Keep the conversation going with customers through personalized follow-up emails. Remind them of previously viewed products and introduce new items that match their interests.
• Pursue Continuous Improvement: Always iterate – regularly update your personalization algorithms and engagement strategies based on fresh customer data and feedback. This commitment keeps the customer experience relevant and engaging.

3. Subscription Membership

One of Amazon’s most successful strategies has been its Prime subscription. Amazon Prime has grown from a priority delivery service to a value-add membership program designed to enhance customer loyalty.

Not only do members receive their goods quicker (and for free). They now have access to Amazon Prime TV entertainment content and even priority booking for tickets to shows and concerts.

Jeff Bezos told investors that the idea behind Prime is to make “such a good value, you’d be irresponsible not to be a member.” This reflects the core of Amazon’s NPS strategy, which aims to deepen customer relationships.

Although the company has added more and more new perks to its Prime subscription, 63% of Amazon shoppers report that free delivery is the most important factor in their purchasing decisions.

So, while Prime subscribers pay for the privilege, they also receive unlimited free postage. The deal works out well for Amazon, too. Prime subscribers typically spend 300% more than non-subscribers.

How to Implement Following Amazon’s Lead

• Identify Key Benefits: First, pinpoint what your customers truly value. Whether it’s faster delivery, exclusive content, or special access, you need to understand these preferences. Build your customer loyalty program around these benefits to ensure it resonates with your target audience.
• Create Tiered Membership Levels: Develop various membership levels, each offering specific perks. This strategy caters to different customer needs and budgets, encouraging members to upgrade as they seek more benefits.
• Bundle Services and Products: This could include anything from exclusive content and special event access to members-only discounts. Bundles add value to the subscription and provide valuable insights.
• Communicate Value Clearly: In all marketing communications, emphasize the most valued features of your membership program, such as free delivery, to attract potential subscribers and positively impact your Net Promoter Score.
• Encourage Upgrades and Renewals: Use personalized marketing strategies and special offers to motivate current members to renew or upgrade their subscriptions. Continually introduce new perks to maintain interest. Constantly monitor the membership program’s performance and ask for customer feedback.

4. Effective Self-Service

Although they appreciate traditional service channels (phone, email, regular mail, etc.), most actually prefer to use self-service tools – at least in the first instance. Amazon has carefully refined its service processes, making many key operations available to customers.

Instead of calling a customer service rep to report a problem, shoppers can log a call in their account control panel, and carry out much of the initial escalation themselves.

This level of control allows them to “own” their issues and frees up Amazon’s internal resources to focus on delivering excellent service on aspects that cannot be solved without human intervention.

Shoppers expect businesses to respect their time and trade with them as easy as possible. In fact, Forrester Research found that 73% of customers believe that “valuing their time” is the most important thing their suppliers can do for them. And by providing the tools needed to initiate problem-solving, Amazon is clearly demonstrating respect for its customers.

How to Implement Following Amazon’s Lead

• Develop User-Friendly Self-Service Tools: Build intuitive online tools that allow customers to address issues independently. These tools should be straightforward to navigate and enhance the user experience.
• Provide a Centralized Dashboard: Implement a user-friendly dashboard where customers can easily manage their accounts, log issues, and monitor the resolution process. This reduces the need for direct contact with support teams, streamlining customer interactions and likely boosting Net Promoter Scores.
• Automate Common Issues: Pinpoint the most frequent issues faced by customers and automate their resolutions. This could include deploying automated troubleshooting guides, FAQs, and chatbot support.
• Maintain Human Support for Complex Issues: While automation handles routine inquiries, complex problems should still be directed to human customer service representatives. Ensure these issues are easily escalated and provide customers with clear guidelines on how to seek further assistance. The goal is to minimize the time customers spend resolving their issues, which greatly improves their satisfaction. 

5. Diversified Product Base

As mentioned earlier, Amazon began as an online bookseller – but as new opportunities have presented themselves, product lines have expanded. In addition to physical goods, Amazon customers can now purchase digital downloads, groceries, and hardware – like Kindle e-readers and the Alexa digital home assistant.

Amazon has also found a way to productize its own internal processes. The Amazon Web Services (AWS) cloud service replicates its internal infrastructure, making the same flexible computing model available to other businesses. By selling a subscription to these computing services, Amazon is also a significant player in the infrastructure services market.

While the COVID-19 pandemic pushed consumers toward remote care and online shopping, Amazon seized the opportunity to lay the ground for wider healthcare services with Amazon Pharmacy. Launched in November 2020, it was described by many as Amazon’s most significant venture into the healthcare industry. In 2021, Amazon’s medication delivery service became the leader in the Drug Stores & Pharmacies industry with an NPS score of 66.

By constantly expanding its offering, Amazon has become a one-stop shop for a huge range of goods and services. This makes shopping with Amazon particularly convenient, boosting NPS and ensuring repeat purchases.

How to Implement Following Amazon’s Lead

• Diversify Product Offerings: Scout for opportunities to broaden your product range. Think about what complementary products or services your customers might need that could enhance their overall experience with your brand.
• Capitalize on Internal Capabilities: Evaluate your existing operations to identify unique processes or tools developed internally that could be transformed into marketable products. For instance, a proprietary software initially designed for internal use could be offered as a standalone product to the public.
• Stay Agile with Market Dynamics: Monitor consumer behavior shifts and emerging market trends closely. Be prepared to adapt quickly and capture new opportunities, such as Amazon’s foray into healthcare services during the pandemic.
• Enhance the Customer Journey: As you expand your product lines, ensure they are woven into a user-friendly shopping experience. Streamline navigation, provide detailed product descriptions, and ensure support is readily accessible. Monitor NPS performance and make necessary adjustments to enhance retention.

6. Customer-Centricity

“The beauty of this mission is that you never run out of runway; customers always want better, and our job is both to listen to their feedback and to imagine what else is possible and invent on their behalf.” – Jeff Bezos

Reading through the many press-releases and statements over the years, Amazon has always placed the customer at the core of what they do. The brand works backward from the customer, not the other way around. 

The new product ideas pursue something that meaningfully changes customer experience over a long period of time – with “long period” being a keyword here. That’s because the company focuses on better long-term experiences and loyalty rather than short-term success, no matter the investment.

They put themselves in the customer’s shoes and are always all ears for customer feedback. The brand is willing to learn what users want or dissect what doesn’t work well for them to create better solutions. With that in mind, they make good use of customer satisfaction surveys – at critical touch points – and regular follow-ups. Turning to feedback loops and analyzing data is vital for managing customer expectations. 

Moreover, Amazon offers the opportunity to rate received products/sellers and submit reviews, thus building trust and handing more control over the shopping experience to the customer.

How to Implement Following Amazon’s Lead

• Engage Actively with Customers: Employ different channels to capture customer feedback, including surveys, social media platforms, and direct customer interactions. Train your team to respond effectively, ensuring that customers feel heard and valued.
• Forge Long-Term Customer Relationships: Focus on developing products and services that offer lasting benefits to customers rather than pursuing short-term gains.
• Leverage Data for Strategic Insight: Use advanced tools to gather and analyze data from customer feedback and behaviors. Apply these insights to refine your product offerings and enhance service strategies.
• Establish Effective Feedback Mechanisms: Provide customers with the means to influence their experiences directly. Simplify the feedback submission process, making it straightforward for customers to share their suggestions with your brand.
• Customize Customer Interactions: Based on the insights gained, tailor interactions and promotions to meet each customer’s unique needs and preferences. Customize your communication and services to reflect individual customers’ histories and preferences.
• Maintain Ongoing Communication: Regularly follow up with customers to assess their satisfaction and resolve any issues. This consistent engagement shows customers that their feedback is important and that your brand is dedicated to continuous improvement.

Complex, yet Simple

Many of Amazon’s internal techniques are quite complex (the Amazon AWS Cloud arm of the business is incredibly technical). Still, they are all focused on the same goal – happy customers. Every development, innovation, and new service is designed to make customers’ lives easier.

From more accurate product recommendations to applying technology to simplify the shopping process, everything Amazon does is focused on making things easier and more convenient for their customers.

If your business cannot replicate anything else that Amazon does, it can still borrow this relentless focus on customer satisfaction. After all, a customer-focus ethos is free to adopt. And ultimately, it is only by providing an outstanding customer experience that you can push your NPS scores upwards.

For more help and advice about measuring NPS and using it as a metric for your own business performance, please get in touch with Retently to arrange a demo.

The post How Amazon Maintains an Impressive NPS appeared first on Retently CX.

One of the most frequently asked questions we get from our customers at Retently is “What is a good Net Promoter Score®?”. Although we emphasize that the score value is irrelevant, we do understand that comparing the metric to other companies can help gain a more accurate picture of where they stand in the competitive landscape.

To be honest, benchmarking NPS® is a complicated process. Behind every customer satisfaction metric, there is a series of factors that influence it. NPS is no different.

To prove that, let’s look at the following examples. According to Retently’s NPS data for a five-year span, the average Net Promoter Score for Healthcare lies in the range of 34 with the lowest having a value of 20, while the average NPS for Communication & Media – in the range of 19, with the lowest being -6.

It essentially means that you cannot say a lot about a company just by looking at its absolute NPS without considering its relative performance within the industry. While for some businesses, an NPS of 30 might turn out to be the worst in the industry, for others – as being ranked among the market leaders.

So, from what you can see, the Net Promoter Score can vary dramatically, and if you want to figure out whether your NPS score is good or bad, there are a variety of aspects to dig into. Further on, we will be looking at the absolute values of a good Net Promoter Score across industries, factors affecting NPS benchmarks, and steps to take when comparing your scores against competitors to get the most out of your NPS score.

But, first things first, so let’s make sure there is a clear understanding of what NPS is.

Net Promoter Score Defined

Net Promoter Score (NPS) is a simple, yet effective metric that measures customer satisfaction and loyalty by asking one key question: “How likely are you to recommend our company/product/service to a friend or colleague?”. Based on their responses, customers are grouped into Promoters, Passives and Detractors, with NPS being the difference between the percentage of Promoters and Detractors.

• Promoters (9-10): Loyal enthusiasts who will most likely recommend your business to others and help attract new customers.
• Passives (7-8): Although satisfied, these customers are not devoted to your brand and may easily switch to a competitor if a better offer is on their radar.
• Detractors (0-6): Unhappy customers who may affect your business reputation and growth through negative word-of-mouth.

The concept of NPS was first introduced in 2003 and, since then, has become a key reference point for businesses aiming to improve the customer experience. Here’s why:

• Simplicity – NPS is easy to understand, implement and act upon. This straightforward nature makes it an accessible metric for companies of any size and industry.
• Actionability – Companies can use NPS to uncover opportunities to improve, efficiently target specific customer segments and turn at-risk customers into brand ambassadors. The metric also serves as a gauge for the overall health of customer relationships.
• Predictive value – Linked to customer loyalty and positive word-of-mouth, a high NPS suggests a potential for greater customer retention and more revenue for the business, predicting future growth.
• Benchmarking – NPS offers a means to compare performance against industry standards and competitors, in order to identify trends over time and facilitate informed decision-making.

Retently 2024 NPS benchmarks

We often outlined the importance of benchmarking NPS to make it work to one’s benefit. We used various sources to pinpoint the idea and bring about representative examples. But why use only external sources to surface specific conclusions when we have plenty of examples of our own?

With this idea in mind, we took a step forward to our objective. We needed to have a glance at our own customers and sort out the conglomerate of data to shape the Retently 2024 NPS Benchmark. With a large customer base from various industries, here’s how we selected the data to keep it objective and reduce the margin of error:

• we included only industries with more than 10 clients
• the data comes from a sample of at least 10,000 surveys
• the companies were not segmented by size or country as it did not fit the scope of these benchmarks

By looking into the NPS scores of the respective customers, we came up with an average value for each of the industries fitting the rule.

The aggregated data across our customers have led to surprising results: all of the analyzed industries crossed the zero threshold. Since none of the rated companies dipped into the negative NPS field, overall, we could witness an average score ranging from 16 to 80.

For a more vivid display, we decided to group our data into B2B and B2C companies. But before drawing up any conclusions, let’s dive into the numbers:

Thus, we’ve got the Insurance industry leading the pack with an impressive average of 80. After experiencing a decline last year following four years of continuous growth, the Consulting industry is getting back on track with an NPS score in the high 70s. Financial Services secured a spot in the top 3 rankings, boasting an NPS score of 73. 

In 2022, Ecommerce, Retail and Technology & Services considerably strengthened their positions, registering a notable jump compared to 2021. The high-stakes reality imposed new standards, to which these companies successfully adapted. However, in 2023, only Technology & Services and Retail advanced on the NPS scale or stuck to their positions, while Ecommerce registered the second lowest value for the industry over a 5-year period with an NPS score of 50.

Yet, 2024 comes with new opportunities for Ecommerce and Retail, with more and more brands adopting CX tools willing to leverage customer feedback for relevant improvements. This has been reflected in their numbers with an increase to an NPS score of 52 and 64, respectively. Technology & Services have experienced one of the most steady growths over the years, but unfortunately, 2024 was less generous, in spite of a quite good score of 61.

These industries, together with Digital Marketing Agencies present on our chart, prove that an average NPS score over 50 is achievable if a customer-centric approach is adopted. Since a single negative experience is all it takes to turn a potential Promoter into a Detractor, brands have learned to pay due attention to each customer interaction and act quickly to embrace change. The numbers speak for themselves.

We move toward Healthcare companies that enjoy a convincing average NPS in the high 40s, while B2B Software & SaaS and Logistics & Transportation companies account for a slight decrease to an NPS score of 40.

The Construction industry experienced the most dramatic change in 2024 with an NPS score of 37 (-23 points), being unable to maintain the impressive value from 2023.

The Cloud & Hosting industry seems to hold on to a quite decent score of 39, while Internet Software & Services, although at the end of the scale, registered a positive value of 16. 

Drawing a line under the numbers, we can outline the following highlights:

• According to the aggregated data, the average Net Promoter Scores for B2B industries range from 39 to 76, while for B2C, from 16 to 80. One can notice that for B2C markets, the gap between the highest and lowest score is more considerable than in the case of B2Bs.
• The top value of the NPS benchmarks reported a 6-point increase compared to the previous year, while the lowest score had an even better result at plus 7 points.
• Although the industries present in the benchmark enjoy a high average NPS score, the majority have experienced a decline in their numbers during the pandemic years, the most affected being Logistics and Transportation (from 29 to 3), Ecommerce (from 62 to 45), and Insurance (from 70 to 57). While the pandemic changed the game, imposing a new reality, these industries managed to improve their bottom line and come strong with better offers, new customer-centric processes and improved customer experiences – clearly reflected in their 2022 NPS values. In 2023 and 2024, 10 out of 14 industries either registered an increase or saved their spot on the NPS benchmarks, keeping the upward trend consistent. 
• The most noticeable boost was registered by the Consulting industry with an increase of 9 points (from 67 to 76), followed by Internet Software & Services companies with 7 points, Insurance and Digital Marketing Agency with plus 6 points. While the growth is not as striking as in the previous years, which featured a 40-point increase, each of these sectors has managed to recover following a less prosperous 2022.
• Although most industries have experienced an increase in their NPS scores, getting back to the pre-pandemic values or even surpassing them, there are sectors that accounted for a significant decline, among which are: Construction, Technology & Services, B2B Software & Saas and Logistics & Transportation.
• The pandemic has brought into sight more digital presence with Cloud & Hosting, Technology and Services, B2B Software, Digital Marketing Agencies, and Ecommerce earning the mid-values in our NPS benchmark. According to Zendesk, 75% of decision-makers confirmed that COVID accelerated the adoption of digital technology. Since expectations are high, even seemingly the most adjustable industries have not been spared a critical eye.
• The pandemic and the subsequent limitations have hit hard such industries as Travel & Tourism, Restaurants and Hospitality, companies which diminished in number and therefore are no longer recurrent in the Retently NPS benchmark. At the same time, we witness such industries as Staffing & Recruitment or Food Takeout & Delivery gaining more attention given the new reality. As expected, as soon as most countries launched their vaccination programs, there was an increase in the average NPS score for most industries, especially Ecommerce and travel-related. Given the considerable focus on environmental aspects, such industries as Renewables & Environment came forth, making it quite possible to earn a respectable place on our NPS benchmarks in years to come. 

With all this data in mind you may wonder, what is actually a good Net Promoter Score to have and how can you get a more accurate understanding of where you stand in a particular niche?

Well, it’s about time to get into more details.

What is a good NPS score?

Generally speaking, a Net Promoter Score that is below 0 would be an indication that your business has a lot of issues to address.

A score between 0 and 30 is a good range to be in, however, there is still room for progress. If your NPS is higher than 30, that would indicate that your company is doing great and has far more happy customers than unhappy ones.

An NPS over 70 means your customers love you and your company is generating a lot of positive word-of-mouth from their referrals. The higher your NPS is, the more likely it is that your customer referrals will convert into new leads, hence into more revenue for your company.

Do your best to keep your score above 0. Even though an NPS of -10 might be higher than others in your niche, finding yourself below zero might be discouraging and it should definitely ring a bell as to the provided customer experience.

NPS trend over time

Have you ever thought of how the NPS average value changed over the years?

We did, and it seemed to firmly slide down. To back up our assumption, we looked into the data provided by the Temkin studies for a span of 3 years. As a result, we could witness a clear decrease in the average NPS score provided by consumers for 15 out of 20 industries, with sectors such as Banking, Software and Internet services accounting for a more significant decline.

The data reflected in the Satmetrix-NICE NPS benchmark reports for a similar period seems more optimistic, with a clear decline in the received NPS scores for only 12 out of 23 industries, having Cable & Satellite TV and Internet Services at the bottom of the scale. However, what seems encouraging at first sight, is merely a temporary spike in the overall picture. In this context, one should consider that only 2 of the 23 sectors got a slight increase – Health Insurance and Smartphones – while the remaining 9 sectors enjoyed a slight boost in 2018, followed by an even lower average NPS score in 2019 as compared to previous years.

A compelling study in the field, conducted by ProfitWell, supports our observations. By analyzing NPS data in both B2B and B2C from over 5,000 subscriptions and nearly 25,000 consumers, they reached a similar conclusion. Five years ago the average NPS was in the upper 20s and low 30s, today dropping to single digits. The numbers highlight that the average Net Promoter Score is undoubtedly trending down.

What then? We’re past 2019 you would say. Then COVID-19 took the stage, shifting the focus to recovery rather than evolution or change. The pandemic left a noticeable footprint worldwide and NPS scores in most industries simply crashed. 

Change is never easy, therefore, companies had to figure out a quick way to adapt to the new reality that would shape their path for years to come. And although in 2022 and 2023, many industries managed to approach the pre-pandemic NPS values, and in isolated cases even achieve better results, it’s rather difficult to follow the overall trajectory of the NPS trend without taking a glance at the performance of the following years.

But still, why the change? Why did the average NPS score drop over the years, irrespective of the industry? It’s definitely not because the current offering is less attractive or quality-oriented, or because the customer support cannot provide a positive customer experience.

We live in times when there is plenty of competition, when providing a product that simply works is not enough, and customer expectations are higher than ever. Coming up with something that will challenge your client’s interest over the entire customer journey is just so much harder.

A memorable customer experience is what makes the difference, driving up a good NPS score. That is why diving into customer feedback in search of meaningful improvements that can impact your brand’s future performance is merely a necessity.

Benchmarking your Net Promoter Score, step by step

The perception of a good NPS and the accuracy of the above score segmentation is very relative. Truth be told, there are markets that never get a Net Promoter Score higher than 20. If you are one of them, there are several steps you need to go through to compare your scores against competitors.

Step 1: Compare it with your industry average

To understand your Net Promoter Score better, start by comparing it with the average scores within your industry, and against competitors. This is also referred to as the relative method, as opposed to the absolute method, which involves benchmarking your number to an agreed standard across industries for what a good NPS is.

When comparing NPS scores, it’s important to understand what market you’re operating in. Some businesses have a more positive image than others. Department stores, for example, bring more happiness to customers than banks and insurance companies. Thus, they tend to have higher NPS.

If you are in a travel business, you can’t compare yourself to a company that provides internet or TV services. It will simply give you the wrong idea.

To prove that, let’s look at the Verizon NPS score, which in 2019 dropped to 19. Considering that the maximum score you can get is 100 (which no company ever did, by the way), you might think that it is pretty low. As a matter of fact, Verizon has had the best score in the ISP industry for years in a row, being overthrown by AT&T Fiber only in 2020 with an NPS score of 20.

United, with an NPS of 10, on the other hand, ranks as one of the worst companies in the Airline industry. In 2021, the company reported an increase in its NPS score throughout the pandemic and later on referred to 2023 as a year of growth and restoration with record NPS scores. However, they have not published the exact numbers of the United NPS survey. While both companies have somewhat similar scores, their performance among peers differs considerably.

NPS shouldn’t be the endpoint of your benchmarking process. Conduct a competitive analysis to significantly broaden your ideas and inspiration base, as well as pinpoint your weaknesses and strengths.

Step 2: Compare the score within a region

NPS varies not only by industry, but also by geographical area.

Cultural differences can influence NPS scores a lot. There is a tendency for different regions to rate companies with varying degrees of enthusiasm. For example, in some countries, customers are less willing to use the top end of any scale, whilst others opt for the extremes, avoiding the middle values.

Anyone who has ever compared NPS scores in the US and Europe probably knows what we are talking about. Europeans rate company performances very conservatively and they are less likely to give you 9s or 10s.

In Europe, children are graded on a scale of 0 to 10 and it’s almost impossible to get a 10. In Europeans’ minds – 8 is good, 9 is great and 10 is genius. So when confronted with a classical 0-10 scale in NPS, survey respondents give you 8 even if they are satisfied.

In Japan, customers tend to give lower ratings as well, since it is considered poor etiquette to rate any business too high or too poor, regardless of their performance. Americans, on the other hand, give higher scores than just about anyone else. And it’s not at all surprising since the Net Promoter System was originally developed in the US.

A recent Global Consumer Study, also showed that along with the US, such countries as Brazil, India, Indonesia and Mexico have a median response of 9 when someone likes a company, which is above the value of the rest of the countries recurrent in the study. In this respect, South Korea and Japan recorded the lowest average scores of 7 and 6, having the smallest NPS gap between when they like and dislike a company.

CheckMarket wrote a compelling article that suggested the need for another NPS survey format for European countries, where respondents who give you 8s would also be considered Promoters. The distribution of NPS scores across countries like France, Germany, Spain and the UK present in the study might give a green light in this respect. We think it’s a great idea, but for now, if you’re not happy with your NPS score, read step three.

Step 3: Consider the survey channel

Pay attention to the differences in the survey channel (email, in-app, SMS) and the methodology used to conduct the survey, since it can have a big impact on the NPS score. Big companies may have the financial means to do an outsourced survey, whereas small companies will most probably measure it on their own.

There is much discussion on the surveying methodologies favored by respondents. Fueled by the growth of the internet, web surveying seems to take the lead. However, criteria such as approach, outreach method, cost, and demographics allow some of the channels to outperform in particular cases.

For instance, the social interaction proper to a phone call may determine more engagement from the respondent since he is assisted in the discussion. It may also affect their answers as people tend to present their opinions in a more positive light to a real person. Web surveys (in-app) turn out to be less expensive, less intrusive, but, at times, they might have a weaker impact on enforcing customer dialogue.

Whatever channel you go for, make sure you run your NPS campaign using the same method as performed by the benchmarked competitor. Otherwise, the comparison will simply not give you accurate results. Don’t compare apples to oranges.

Step 4: Use your baseline NPS as your own benchmark

Since the score alone is nothing but vanity, it’s impossible to give you a certain number that shows you what a good NPS is. The only number that’s good, is the one that’s better than your previous score. That is the most important benchmark.

The best way of measuring progress would be to compare your NPS against your score over the last three or six months. If you notice a 5-10% increase in score, you’re going in the right direction and progressing toward building a successful business.

On the contrary, if you notice a significant decrease in the number, treat it as a warning sign that something went wrong and certain measures or actions need to be taken. If you are continually improving your own NPS, then you’re likely to be continually improving your customer satisfaction, encouraging growth, and increasing revenue.

However,  you should make sure that your pool of respondents is of a significant size to be able to draw accurate conclusions. Segmenting customers will prove useful in analyzing the results. 

Factors affecting NPS benchmarks

So, which are the factors that affect NPS benchmarks? How do you know if you have a good NPS, and how do you know it’s not enough? Primarily, there are four factors that affect NPS benchmarks:

1. Niche Competition

Generally, NPS tends to be a better indicator in highly competitive verticals with many players, since it helps you assess relative performance. For instance, the reason why Tesla has an NPS of 96 can be partly due to its unique position in the market of luxury, long-range electric automobiles. As a result, customers have little choice, therefore are more satisfied.

Of course, there’s no denying that Tesla is making awesome electric cars and Elon Musk is building an aspirational brand, but NPS benchmarks tend to be higher for industries dominated by a bigwig with minor competition.

If you think it over, you’d realize that Apple doesn’t make the cheapest smartphones (they provide the best user experience); Netflix doesn’t offer a generic, free video streaming service (they provide a uniquely affordable, personalized and on-demand premium content streaming service); Amazon doesn’t lure customers with cheap discounts or flash sales all year round (instead, it locks them in by offering Prime benefits).

All these companies lead their market segment and have a unique, brag-worthy proposition. That’s the prime factor to consider while evaluating your NPS – how crowded your industry is and how unique your value proposition is.

2. Customer Tolerance Levels

Tolerance is one of the crucial factors that affect Net Promoter Score benchmarks, as people are more likely to be opinionated by how much value your products and services deliver to them on a day-to-day basis or how much their business or life depends on it.

You can measure the tolerance level for your business by asking a simple question: “On a scale of 0-10, how likely are your customers to get mad if you can’t address their needs on an immediate basis?”.

If the number is closer to 10, your business is in a low-tolerance industry toward service interruption, but if the number is close to 3-4, you’re in a high-tolerance industry.

The easiest way to increase the tolerance level for your company is to transform the customer experience by providing more customer touchpoints, greater transparency, and easier accessibility. Perhaps, the best examples of companies that have managed to achieve high tolerance, despite being in a low-tolerance industry, are Uber, Southwest, and Netflix.

3. Vendor Switching Barriers

One of the reasons why non-SaaS businesses tend to fetch higher NPS than SaaS ones is because it’s easier to infuse brand loyalty and high tolerance, as they have inherently high switching barriers.

For instance, if you bought a car and loved the driving experience, you are inclined toward recommending it to your friends, even if the car gave you a little trouble over time. It’s partly confirmatory bias, but mostly high switching barriers.

You cannot afford to switch to a different brand without taking a financial hit. So, in order to stay consistent with your original conviction, you maintain a strong bias and keep referring the brand to others.

However, what would be the case if you rented the car? Switching barriers would be relatively low since you can easily rent a different one to see how it performs.

That’s exactly the kind of problem that SaaS businesses face. Usually, SaaS companies have an inherently low entry and exit barrier, thus, making it difficult to retain customers and build loyalty. That’s also one of the major reasons why most SaaS companies have an NPS in the mid-tier range.

Speaking of SaaS businesses, there is another important aspect impacting their NPS score to take into account, namely: the role and stage in the customer life cycle. 

The Gainsight’s Customer Success Index 2022 showcases a clear Net Promoter Score gap between users – with a median of 36 – and executive buyers or key decision-makers, having an average NPS of 46. 

The surfaced data clearly shows that buyers are very often more satisfied with the software purchase than the users who actually interact with the tool throughout their journey. While the decision-makers are there to offer the necessary instruments to the team, they are very often on the outskirts of the actual user experience.

At the same time, as the user gets accustomed to the new product and learns about its subtleties, their NPS score streams confidently up. Hence the user’s NPS score tends to depend on how quickly they manage to adopt the new instrument, while the buyer’s score depends on how fast he switches to a new project or a new productivity tool.

And while the feedback from both perspectives is extremely important, this data outlines the importance of looking at NPS not as a one-off survey, but as a sustainable process that keeps a pulse on customer engagement.

4. Events of global significance

Timing is important in benchmarking: certain events, global or local, may influence results significantly as customer interests and expectations change.

Though events of global significance are rare, they do happen and impact the NPS. The COVID pandemic has become a challenge for many businesses leading to a notable decrease in survey scores. A Qualtrics study showcases that the average NPS dropped by 15,2 points during the pandemic, that is from 29.8 to 14.6, with younger people giving lower scores.

Moreover, the NPS dropped more than 30 points with the youngest age group as compared to the oldest one (55 and older), which declined by only 3.2 points. The obvious reason behind such a striking difference is that the first are active users of digital products, which as a rule provide faster service, thus expectations are rather high. 

Industries affected by the travel restrictions, like rental cars and transportation, hotels,  credit cards and airlines, showed the biggest decline and the lowest NPS scores: their NPS went down by 24-28 points. The least affected industries were health insurance, fast food, wireless carriers and TV/Internet service providers.

Since most services and products had to be digitized, many companies were not ready to deal effectively with the new reality. Initially, this led to slow processing, long waiting times, bugs, and errors that impacted overall customer satisfaction.

Still, human emotions shouldn’t be discarded. There are claims that at the very beginning of the pandemic, many people were more tolerant of long waiting times and glitches. That was bound to end in a while, as customers became willing to get back to the performance they were used to. This shift in emotions should, however, also be considered when benchmarking the score.

NPS as a driver for feedback

Ask yourself, if you find out in your benchmarking process that your score is lower than your competitors’, will you stop attempting to improve it? And on the flip side, if you learn that you are doing better than your competition, will you stop then?

While most businesses are obsessed with growing their score, NPS is not really a quantifiable metric to merely grow, but mostly a qualitative metric to reflect, analyze and react.

The most important aspect of NPS that many companies miss is that the number is just a metric; what’s more important is the qualitative feedback you get from it and what you do with it to make sure you’re improving your customer experience.

The main purpose of the Net Promoter Score lies in helping you track and maintain the relationship you’ve created with your audience. And your main goal should always be to listen to the voice of your customers and act on it.

Instead of asking “What is a good Net Promoter Score?”, focus on understanding what drives the score and how to improve it day in and day out, month in and month out, to produce long-term customer success.

Start measuring your Net Promoter Score today and look into the score insights, instead of interpreting it at its face value.

More data is not necessarily better data without proper interpretation, but having the right tool at hand, you might also want to look into additional customer satisfaction metrics, like CSAT or CES, for another perspective on your transactional processes.

The post What is a Good Net Promoter Score? (2024 NPS Benchmark) appeared first on Retently CX.

Tesla has also claimed the top spot in the Consumer Reports’ annual owner satisfaction survey, where 91% of Tesla owners stated that they would buy another Tesla vehicle in the future.

Total pre-orders for Tesla Model 3 surpassed many expectations at more than a quarter of a million in less than three days. To show you the bigger picture, this is more than 70 percent of annual sales for the leader in this market segment – Mercedes Benz C-Class. At the same time, the Model S received the highest-ever satisfaction score of 98%, while Model Y and 3 remain at the top of the best-selling electric car chart to date.

You cannot argue with the fact that these results are incredible. Tesla is a definite leader in NPS® benchmarks, taking into account that anything above 40 is still considered a very good score in the auto industry.

This huge success actually shows us the big picture of how markets work. So how does the world’s NPS leader achieve such a high level of customer satisfaction?

From implementing innovative features to perfecting the customer experience, today we’ll share the secret ingredients that make Tesla so special.

Tesla developed a truly unique selling proposition

A lot of economic textbooks teach you about the role of competition in the market. But they are often skeptical of the free market, concluding that some industries associated with huge entry costs alter the competitive process from its usual path.

The automotive industry is often cited as a relevant example. The need for massive investments and substantial exit fees work as a huge entry barrier.

And then comes Elon Musk with the Tesla team, creating something different, something we thought couldn’t happen – an automotive startup company.

Just like Steve Jobs, Elon Musk told a story that was aspirational and resonated with people. He said that electric cars are the future of sustainable transportation. In his blog post, he wrote:

“So, in short, the master plan is:

1. Build a sport car
2. Use that money to build an affordable car
3. Use that money to build an even more affordable car
4. While doing above, also provide zero emission electric power generation options”

The company had a vision and a long-term goal from the start. They were going to create an electric car that was fast, sexy and efficient, then use that capital to create even more desirable products – and people liked that.

A good product that appeals to the consumer is the deepest core of marketing, which is very hard to achieve. The best way to show value is to start by making something incredibly valuable to a significant market, just like Tesla did.

Tesla brings innovation

When you drive a Tesla, your concept of what a car should be is irrevocably shaken. It gives the feeling that you’ve got a taste of the future. And it’s not just that they are electric; there are many other reasons why Tesla is innovative:

• Direct sales with no dealer network. Tesla allows customers to buy a car on the Internet, and this B2C model saves a lot of time and money by skipping the middleman. It reduces distribution costs and provides customers with greater convenience.
• Sporty yet practical vehicle. Tesla cars have the character and design of a sports car, but at the same time reach a level of practicality that has never been achieved before. The brand discovered a way to introduce a powerful battery pack into the auto market at an affordable price point, particularly for the luxury cars sector.
• Battery charging. Returning to the fact that it’s an electric car, it means you can plug it in and charge it anywhere. You can use a simple outlet or find a Tesla charging station that will charge it even faster – in about 30 minutes. The charging time would only improve in later updates. With 805 Supercharger stations in 2017, Tesla’s interactive map illustrated its plan to expand them over the next few years. According to the 2023 data, there are 40, 000 + global superchargers, so they seem to have stuck to their promises.
• Interaction with the car via a smartphone. You can see where your car is parked or how much longer it will be until the battery is fully charged, directly in the mobile application. You can also honk the horn, flash the lights and turn on the air conditioning before returning to the car.
• Driver-assistance system: From mid-February 2022, all North American Tesla vehicles have Tesla Vision – 8 cameras and a neural net processing system that provides Autopilot features. It enables the vehicle to detect and respond to the environment, providing passengers with situational awareness and making driving safer and more comfortable. Tesla’s autopilot technology is a significant selling point for its vehicles. The system can automatically steer, accelerate and brake the vehicle. For example, drivers can summon their car to come to them, even if it is not in their line of sight. The technology has received positive customer reviews and helped differentiate Tesla from other automobile manufacturers.
• Remarkably safe. Tesla Model S was awarded a 5.4-star safety rating from the National Highway Safety Administration, the highest safety rating awarded to any car. It doesn’t have an engine, so the entire front end of the car becomes a crumple zone to absorb a high-speed impact. Its roof is so strong that it broke a machine intended to crush the car.

If your company plans to take over the future, this is the way to do it. This car feels like the future for more reasons than just being all-electric.

Tesla cultivates brand loyalty

Tesla doesn’t have a huge marketing budget, unlike car manufacturers such as Ford and General Motors. Instead, Tesla relies on its brand advocates and word-of-mouth marketing to sell its cars.

Hundreds of Tesla fans line up outside dealerships before the cars are even officially unveiled, and they even have to wait a few years before getting their dream car. These incredible pre-order numbers get Tesla even more attention. So, I researched how exactly Tesla builds such incredible customer loyalty, and here’s what I found:

1. Establishes an emotional connection with the customer

Tesla fans are crazy advocates. They attach a deep emotional connection to the brand. One of the easiest ways for a company to do this is by standing for something important.

In fact, a study by marketing research firm CEB published by the Harvard Business Review found that loyalty to brands is hard to achieve without one key element – shared values. People become loyal customers when they share the same vision and beliefs which that company represents.

Tesla passionately promotes its vision that adopting electric vehicles will one day solve our planet’s energy problem. Its electric cars are environmentally friendly, which appeals to customers concerned about their impact on the planet. As a result, people feel good about driving a Tesla.  They don’t need to buy gas, AND they’re helping the environment.

This sort of advertising is earned, not bought.

2. Delivers one of the best customer experience in the auto industry

Tesla has come to a realization that gave them a huge competitive advantage in the world of customer experience: make the process of owning one better than that of owning any other car.

As Tesla’s VP of Sales, Cristiano Carlutti, puts it:

“In the other companies, customers are customers, basically. They pay, they get a product or a service. In the case of Tesla, the customers are partners.”

The process of owning a car includes many touch points, from choosing a car to providing regular service and maintenance to keep it running.

And while many automotive companies offer great products, Tesla goes above and beyond in order to create a well-rounded user experience.

Their whole buying and maintaining process is very personal and, in some cases, unique to the car market:

• After you place your order, you have one week to modify it before the Tesla factory begins to work on it.
• Then the car will be delivered to you, or you could pick it up at the factory and at the same time get a free tour of the factory.
• If the issue is related to its software, engineers can often update the car at a distance. So, they can work on it at night and have it ready to go the following morning.

These are just some of the ways Tesla makes their customers feel special. Tesla goes beyond offering a great product; they are changing how the auto industry perceives customer experience for the better.

3. Takes customer feedback seriously

I personally never owned a Tesla before, but I did a test drive of the Tesla Model S once. The next day I received an email asking me to complete their customer satisfaction survey. I took some time to offer feedback because I knew someone on the other end would actually listen to what I had to say.

Tesla has been known to respond to customer feedback and implement their ideas. A great example occurred when two Tesla drivers submitted an open letter to Musk via a full-page ad in a Palo Alto newspaper. They asked Tesla to make a few changes to its Model S.

In response to this customer feedback, Musk tweeted a photo of the open letter saying that Tesla would indeed implement some of the suggested changes.

There was another instance when a Tesla owner complained about fellow consumers hogging spots at a local charging station. Musk reacted immediately.

Six days later, Tesla announced the following policy on its official website:

“We designed the Supercharger network to enable a seamless, enjoyable road trip experience. Therefore, we understand that it can be frustrating to arrive at a station only to discover fully charged Tesla cars occupying all the spots. To create a better experience for all owners, we’re introducing a fleet-wide idle fee that aims to increase Supercharger availability.”

When a client complained about a very pushy sales guy from the Tesla Stanford shop while shopping for Model X, Musk’s reply and action on the customer’s feedback were instant. He made sure that customer service representatives were reminded about the company’s goals and that their approach aligned:

N.B. Check our dedicated article on customer service tips for actionable insights to improve customer satisfaction.

You may think this was the case only for the early days when the company was making its way on the auto market. However, Musk is still very active on social media, taking up any flagged issue in no time to ensure customers benefit from the best experience possible. Let’s take a more recent example of a customer in Seoul who posted online about the error he experienced when connecting to Model 3 on the iOS app. In a couple of minutes, Musk was already checking the issue, which turned out to be worldwide, and closed the feedback loop with an update as soon as they got it under control. He took ownership of the problem and worked on a solution promptly.

It’s no wonder why Tesla has such a high NPS. From efficiently communicating its brand vision with people to publicly addressing customer issues and delivering its promises, Tesla truly knows how to build brand loyalty.

Measure and improve your Net Promoter Score with Retently

Now that you are inspired and motivated by Tesla’s staggering success, it’s time to start implementing their CX strategies into your company.

Retently NPS helps you build that special connection with the customer by providing the tools to effectively communicate with them and gather valuable feedback.

Boost your customer satisfaction and improve retention rates by sending customers an automated Net Promoter Score survey. Identify who is on the edge of churning, or loves your company so much that, if given the resources, will act as a brand advocate.

Start your NPS campaign today to improve your customer satisfaction tomorrow.

The post The Reasons Behind Tesla’s High Net Promoter Score appeared first on Retently CX.

• Simple, reliable products
• Great customer service
• Unique products and offers

You can learn a lot about improving retention, customer lifetime value and increasing your Net Promoter Score® by imitating the tactics implemented by the world’s most successful companies. Study the hacks used by brands like Apple, Amazon, and Netflix, and you’ll discover actionable tactics that can apply to your business.

You can also learn a surprising amount of tactics and strategies by studying the opposite end of the scale – the world’s least successful companies, from a churn perspective – to compare their common weaknesses and find out what makes their customers so unlikely to recommend them to their peers.

Since not all NPS® data is public, and most brands aren’t eager to publish their low Net Promoter Score, we’ve taken several steps to find reliable customer satisfaction data that we can use to compare brands:

• Whenever possible, we’ve sourced data from various NPS benchmarks to gain a picture of the general NPS range within an industry.
• In industries with a low overall NPS, we’ve looked at consumer complaint data to learn which brands are the least likely to retain customers and earn positive feedback.
• We’ve excluded industries with an extremely low average NPS, such as debt collection, as they’re unlikely to produce helpful insights for most startups and technology businesses.

Ready to start? Below, we’ve compared companies with low Net Promoter Scores relative to the averages for their industries to determine which characteristics have the most significant negative impact on customer satisfaction.

What is a Low Net Promoter Score?

Net Promoter Score is a widely used metric that measures customer satisfaction and loyalty. It looks into customers’ likelihood to recommend a product/service to others, which is calculated by subtracting the percentage of Detractors (customers who are unhappy and at risk to churn) from the percentage of Promoters (customers who are satisfied and likely to recommend).

Simply put, a low NPS score means more Detractors than Promoters, suggesting customers are dissatisfied with a company’s overall performance. That can negatively impact customer retention and, as a result, business growth. The lowest possible NPS score is -100, implying every customer is a Detractor – an unlikely scenario.

A low Net Promoter Score also refers to a value that is below the NPS industry benchmarks. Some industries tend to have lower NPS scores than others, including cable and internet software & service, healthcare insurance, communications & media. 

While the reasons may vary, there are some common behaviors that prompt a low NPS score. That’s exactly what we’ll pursue next.

Aggressive or misleading billing practices

Apple, which markets its products using brand-focused advertising, topped the 2013 technology statistics with a Net Promoter score of 65 for iPad, 70 for iPhone and 76 for its range of laptops. What’s more, according to the available NPS Benchmarks, Apple did not give up the top spot maintaining an NPS score over 60 throughout these years.

The antivirus software company McAfee is at the bottom of the technology industry, earning a Net Promoter Score of 2.

Other brands in antivirus software, such as Kaspersky, report relatively high NPS results, although they don’t provide exact statistics. From this data, we can determine that McAfee’s low NPS is likely a result of its specific practices instead of the overall negative sentiment in this product category.

Many complaints directed toward McAfee are common among companies with low Net Promoter Score. The most frequent one, dating back to 2010 and repeatedly reported over the last six years, involves automatically re-billing customers’ credit cards.

This example isn’t a statement about McAfee’s specific practices, as they’re far from uncommon in many industries. However, it’s clear that the businesses scoring lowest in the NPS survey also tend to use the most aggressive sales and billing techniques.

The lowest-ranked companies tend to use negative-option billing – a controversial practice that involves automatically providing goods and billing customers. After agreeing to a contract, often for a free sample or trial, customers are automatically billed until they opt out.

There’s nothing evil about negative option billing – in fact, many of the world’s most liked companies also use it. Netflix, which maintains an extremely high NPS, offers a free trial with an option for users to continue using a similar subscription-based billing model.

Businesses with great Net Promoter Score tend to be transparent about their billing practices and make it clear when and how the customers will be billed. Companies that rank near the bottom are the exact opposite – opaque and often deceptive about billing.

If your business depends on recurring billing – for example, a monthly SaaS subscription or an ongoing product delivery service – it’s essential to be transparent about how you’ll handle billing for your service. Get aggressive or deceptive, and there’s a good chance it will hurt your customer satisfaction.

Limited or poor quality support

Another common weakness among companies with low NPS scores is bad service. In a Temkin Group NPS Benchmark Survey, Comcast TV earned the lowest NPS both in its service category and overall – a score of -17. Four years in a row, the provider did not leave the negative end of the NPS scale.

Comcast’s customer service is among the lowest-rated in the United States. In fact, the brand’s service is so poorly rated by its customers that it’s become subject to senate hearings, in which the company presented a plan to improve its relations with clients.

In Comcast’s case, the customer service wasn’t just bad but outright disrespectful. In an effort to retain as many customers as possible, Comcast agents were trained to work as hard as they could to encourage customers to stay with the company when they asked to cancel.

There are two lessons here for businesses aiming to improve retention, increase customer satisfaction, and foster loyalty. First, poor service can and will hurt your customer relationships.

The second is that taking a short-term approach to retention, as Comcast and other brands did by using aggressive customer retention tactics, will likely backfire. Comcast’s efforts probably kept some customers onboard but at the cost of many others who deserted the company for good.

When it comes to customer service, there is another important consideration to pinpoint. The Wells Fargo scandal is a vivid example of how poor service practices can result from a toxic working environment. The company’s aggressive sales goals and high-pressure determined employees to open millions of fake accounts without customers’ knowledge. That led to irreparable reputation damage and a notable decrease in the company’s NPS score – a value of -3, to be exact. 

Due to the unrealistic sales targets, as high as 8 to 20 products a day, employees felt forced to compromise their values and resort to deceptive practices to keep their jobs. As a result, many suffered from stress and anxiety, which negatively affected their ability to provide good customer service and further contributed to the overall decline in customer satisfaction.

NPS is subject to overall trends in customer sentiment

In 2007, most customers were happy with their banks. Consumer-focused banks reported an average Net Promoter Score in the 30s, indicating positive sentiment and overall satisfaction with the industry.

Then the global financial crisis happened, and sentiment towards the entire financial services industry nosedived. The average NPS dropped from 40 to 22 over the course of two years, and from approximately 27 to just 11 for credit card providers.

These industries didn’t drastically change their customer service processes during this period, but the overall market trend produced a significant decline in customer sentiment that affected their Net Promoter Score.

Poor service or a bad product can hurt your NPS within your industry. However, every business – from technology to finance – is subject to public opinion. Many companies with low or declining Net Promoter Score combine a downward trend with a poor approach to service.

For example, satisfaction among finance industry customers has largely recovered since the global financial crisis. However, specific banks, that have been plagued with scandals, rank near or at the bottom of the NPS average for the industry.

HSBC, for example, earned a Net Promoter Score of -24 after a series of scandals, combined with record-setting customer service complaints, damaged the brand.

A great product combined with strong customer service is often enough to survive a downward trend in overall customer sentiment. However, a poor experience in a disliked industry can lead to a swift and significant reduction in a company’s Net Promoter Score.

Customer experience is crucial

Offering a highly demanded product isn’t enough. It’s important to ensure people have a great experience while using it. And that’s something McDonald’s learned the hard way. Even though it’s one of the most recognizable brands in the world, the largest fast-food chain has a devastating negative NPS of -8 in the USA.

In 2013, McDonald’s recorded the longest waiting time at its drive-thrus. And the waiting time is mainly influenced by the menu complexity. The chain started with 26 menu items in 1980, which increased to 121 in 2014. Over the next three years, the company would find itself at the negative end of the industry NPS benchmarks.

In comparison, McDonald’s’ direct competitor, KFC, isn’t doing quite great, but at least they have a positive NPS of 14, experiencing an upward trend over the years.

The best-performing fast-food chain in America is Pizza Hut with a Net Promoter Score of 78.

Net Promoter Score and brand awareness

Having a high score is inspiring and can be considered an important achievement. Yet, sometimes the NPS score doesn’t actually matter, and it can be affected by factors unrelated to business performance.

A great example is Uber and Lyft. These two brands are almost identical in their service, and drivers often work for both companies. However, despite their obvious similarities, Uber managed to get a score of 37, while Lyft is way behind with an NPS of 9.

The difference can be explained by the fact that Uber has a more recognizable brand, since its name often appears in the press, and also covers a significantly larger part of the US and abroad. At the same time, Lyft only offers the service domestically.

Deliver as advertised

The insurance industry is one of the most developed in the US, which also means that the competition is very high and it’s crucial to retain your customers.

The direct correlation between satisfied customers and long-term revenue growth is undeniable. Some businesses, though, chose fast revenue over customer needs and got to the bottom of the NPS chart for their industry. That’s the case with CIGNA, a health and life insurance company with a score of -1.

The insurance company was affected by a long-lasting scandal regarding their refusal to satisfy disability claims by their customers. Since 2009, CIGNA has been monitored by relevant authority institutions.

In comparison, their competitor GoMedigap has an astounding score of 93. This proves that the issue is not with the insurance industry (as was the case with the banking sector in the US, mentioned above). The problem lies within CIGNA’s internal policies and its denial to provide the advertised product.

Always close the feedback loop

One of the worst airlines in the US is considered to be United, which had an NPS of 10 in 2014, increased to only 14 by late 2022 – a disaster while compared with its competitors: Southwest (NPS 62), JetBlue (NPS 56) or Virgin America (NPS 48). Since 2012, United has been ranked as the worst or near worst among its competitors.

For years customers have kept complaining about United’s delays, canceled flights, served food, baggage handling and having some of the oldest aircraft in the industry. In 2020, United had one of the worst complaint rates, being responsible for nearly 1 out of 3 complaints filed against all US airlines.

It’s worth mentioning that United always tracked its NPS score, but so do its more appealing competitors, such as Southwest and JetBlue. Why the huge difference in customer satisfaction? The answer is actually simple.

“NPS is core to how we make decisions,” said Robin Hayes, JetBlue’s chief commercial officer.

Even though United measures customer experience and tracks NPS, it seems the airline doesn’t act on customer feedback, at least not fast and satisfactory enough. The most important aspect of an efficient NPS campaign is to close the feedback loop; this is the only way to improve customer satisfaction and become a leader in your industry.

Measure and improve your Net Promoter Score with Retently

A low Net Promoter Score can have significant implications for success, including high customer churn and negative word-of-mouth. By taking proactive steps to address the root causes of a low NPS, such as implementing customer feedback systems and offering tailored solutions, businesses can not only meet customer expectations and increase satisfaction but also improve their bottom line. 

Ultimately, a poor NPS score reflects the lack of commitment to delivering exceptional customer experience. By prioritizing CX throughout the customer journey, companies can create a loyal audience to help them thrive in the long run.

Retently NPS automates the process of surveying your customers, letting you learn how they feel about your product while you focus on running your business. Sign up for a free trial, set up your CX survey campaign in minutes, and start collecting invaluable customer feedback. Improve your company’s NPS score to unlock the potential of customer loyalty and, as a result, drive revenue growth.

The post What Do Companies With Low Net Promoter Score Have in Common? appeared first on Retently CX.

“You can’t have a mid-life crisis in the airline industry, because everyday is a crisis.” – Herb Kelleher

Maintaining an airline is a mess. From ensuring flight safety and regulators’ compliance to providing delicious meals, battling global uncertainties to keeping airfares competitive, every system must work like a Swiss watch to ensure on-time performance.

However, in the pursuit of keeping their operational costs lower, airlines often compromise on one element that has become the crucial competitive differentiator – customer experience.

This article explores how one can use Net Promoter Score to dig deeper into customer issues and deliver better experiences. While there’s high competition in the aviation sector, it’s ripe for disruption, as customers are now ready to pay a premium for availing of better services.

But before we dive deep into the NPS® competitive analysis, let’s first understand why airlines, as an industry, trails other verticals in delivering customer satisfaction.

Why Do Airlines Have Low Customer Satisfaction Ratings?

While customer satisfaction ratings for US airlines have reached a peak not seen in over 20 years, scoring 76 out of a possible 100 on a scale, the industry still lags behind other verticals in delighting its customers.

In 2020, according to Qualtrics, the airline industry recorded an average NPS of -1, the second-lowest score in the benchmarks and 13 points lower than the average NPS score of all sectors. At the same time, the Satmetrix report for the same year accounts for a more optimistic average of 27.

Although these values have been considerably affected by the pandemic – improving in 2021 with an average NPS score of 12 and 45, respectively – the airline industry has always struggled to secure its place on the NPS benchmarks. That was mainly due to poor customer experiences and low loyalty levels, which directly correlate with NPS.

“Despite the uptick in metrics for customer service, aviation is still a sector, where customers have lots of issues when compared to other products or services that they consume on a regular basis,” said David VanAmburg, director of ACSI (American Customer Satisfaction Index). “From having a decent flight experience to getting to your destination without losing your luggage, every single element forms a critical part of the overall airline experience.”

And it’s not that airlines are oblivious to the underlying testimony. On average, the industry spends over $1.3 billion per month on engaging customers, boosting promotional offerings, and optimizing internal operations. Like other companies, airlines are also blitzing customers with customer satisfaction surveys the moment they step off the airplane.

But, despite all the efforts being made, the industry still falls behind in delighting customers and delivering favorable experiences. For instance, according to U.S. Department of Transportation’s Air Travel Consumer Report, in 2021 vs. 2019, there was a 225.84% jump in complaints received from consumers about airline services. Already in September 2022, the numbers went up to 380% compared to the pre-pandemic levels. Although the huge increase was mainly due to the pandemic and the many refund complaints the industry has been facing, earlier reports still accounted for regular increases in the value on a YOY basis.

While there can be several reasons for low customer satisfaction in this industry, there are four primary factors that skew the metrics for the sector:

Service Polarity: Traditionally, airlines have segregated their customer base into two segments — economy and business class. While business passengers continue to enjoy top-notch services, economy passengers are forced to squirm in 28 or 31 inches of legroom and be lucky enough just to get a pack of nuts and soda. The extreme polarity in customer service, backed by an exorbitant pricing structure, often agitates economy fliers, as they feel they are being mistreated.

Low Tolerance: Airline customers have extremely low tolerance towards any problems they face during the flight experience. That’s because customers pay considerably more for a flight ticket and take an enormous risk trusting the airlines with their personal safety and baggage. The high-risk investment increases the expectation levels and decreases the tolerance barriers.

Price Sensitivity: US airline customers (and nearly customers all over the world) have shown that there’s only one factor that matters the most while picking an airline – pricing. That has led to pricing wars in the airline industry, but in significantly cutting down costs, airlines have overlooked elements like the comfort and convenience of their customers, leading to higher customer dissatisfaction.

Poor Employee Satisfaction: It is a universal truth that happy employees provide better customer service. If anything goes wrong with booking, luggage, food, etc., well-trained staff will always be able to defuse the situation. Naturally, the resulting NPS will be higher as customers always appreciate friendliness and desire to help.

Airline Industry’s Response to the Pandemic

Since customer satisfaction is central to the Net Promoter System, airlines have to work hard to provide a seamless experience even during challenging times. The main concerns now involved ensuring passengers’ safety, decreasing face-to-face communication, and transitioning everything into an online experience.

Naturally, the attention of companies went from food and entertainment to health concerns. Airlines turned to scientists for advice, but also listened to their customers and took extra precautions to reduce travel anxiety. In addition to general safety rules, American Airlines introduced touchless check-in kiosks to avoid any contact. At the same time, United provided wipes to their passengers to clean their seats and make them feel safe, though flight attendants had already done it. United was also the first airline to provide the possibility to take rapid coronavirus tests at the airport.

Delta communicated with its passengers through surveys and found about their concerns with air quality, which is quite understandable as they have to spend hours in a confined space. Now their staff changes air filters more often than recommended by scientists. Due to rigorous procedures, Delta ranked first among the ten largest US airlines for the response to the pandemic. 

Though it’s not an American carrier, Emirates went even further and offered to cover medical and quarantine expenses if passengers contract the virus while traveling.

Online operations have become more important because of social distancing rules and sanitation concerns. While some passengers prefer to check in at the airport, now it is almost a must for every airline to have a mobile app that allows them to do it without physically communicating with staff. That’s especially relevant in the times when carriers cut jobs. For example, United announced in 2020 that they would let 13,000 employees go while hoping to get government aid; while in 2021, they informed that the jobs of 14,000 employees were at risk when the second round of federal assistance expired. 

 Competitive NPS Analysis in the Industry

Despite being in a highly challenging industry, some airlines have managed to stay profitable and delight their customers on a consistent basis. For instance, Southwest was ranked #10 in the Customer Service Hall of Fame, with their customer relationship model becoming a case study in delivering great customer service. The company also recorded the highest NPS score in the airline industry in 2019 and 2020.

Southwest is the first airline to introduce profit sharing to encourage its staff to work harder. Since their well-being is tied to the company’s success, employees are motivated to go above and beyond in performing duties.

Delta is another airline that adopted the profit-sharing model. At the beginning of 2020, the management distributed a record $1.6 billion among its 90,000 employees. It sure works, as Delta is frequently ranked high in many areas of flight operations: in 2019, The Wall Street Journal named it the best airline. 

Alaska Airlines was ranked #1 in Satmetrix NICE NPS Benchmarks Survey of U.S Airlines, 2021, while other airlines struggled to stay competitive. For instance, despite flying over 104 million passengers and clocking $24,6 billion in revenue, United has been right at the bottom of the list for years. In 2020, it also ranked #10 in the Customer Service Hall of Shame, registering the biggest number of complaints of any US carrier – 11 274, to be precise.

Over the years, the news about passengers being dragged because of overbooking became routine. For some time, flight attendants complained about understaffing. In addition, the airline management replaced quarterly bonuses with a lottery-based system. Naturally, employees are not incentivized to work hard and please passengers. 

In 2008, musician Dave Carroll’s frustrating experience with United Airlines became a well-known example of customer feedback shaping a company’s reputation. Carroll, a member of the band Sons of Maxwell, had a $3,500 guitar damaged during a United Airlines flight. Frustrated by the airline’s indifference and lack of compensation, he wrote and recorded a song – “United Breaks Guitars”. The song (which later became part of a trilogy) went viral, significantly impacting United Airlines’ reputation and customer satisfaction. Fast forward to 2017, the hashtag #unitedbreaksguitars trended on Twitter after another controversial incident where United Airlines forced a passenger out of the plane to accommodate crew members needed elsewhere.

Recently, United recorded some decent attempts at improving customer service. A good example is how the company handled the challenging trip of Jason Dorn. He posted about his experience on social networks, prompting many reactions and positive word-of-mouth for United Airlines. 

In 2021, United Airlines, which has been lagging in terms of customer service for many years, declared it had shifted focus to Net Promoter Score to evaluate how it is performing compared to other carriers. That will certainly have a direct effect on both their customers and employees, but until then, let’s focus on available data.

While the comparison of NPS scores provide a bird’s eye view, the overall customer dissatisfaction is quite apparent in the breakdown of airlines’ NPS. For instance, while Southwest has only 8% Detractors, United has 37% Detractors (despite having a higher NPS than U.S Airways).

To ensure relevancy, we also looked into late 2022 data; however, the picture did not improve considerably over the years.

The numbers might seem insignificant from an operational perspective, but a closer look at the bottom-line margins and the amount of carried passengers help us assess the impact of delighting customers. For instance, here’s a look at the top five airlines by passenger traffic:

And here’s a trend analysis of the bottom-line margins of the airline industry from 2008-2013:

As you can see, Delta (DAL) managed to sustain the highest profit margins, while companies like United (UAL) and American Airlines (AAL) had the lowest profit margins, despite flying more customers than their competitors.

While it’s certainly fascinating to establish a direct correlation between customer satisfaction and profitability, that’s not the goal of the NPS study. Just like how NPS insights matter more than the number itself, the strategies that these airlines used to improve customer satisfaction are more important than the technical analysis.

For instance, what different strategies did Southwest use to improve customer satisfaction? How did they capture the voice of the customers? How did they prioritize their operational goals? And how did they measure the financial impact of corrective action?

Intending to understand the factors that drive customer loyalty in the airline industry, Satmetrix published a report on the US Airline industry, in which they outlined a framework that could gauge customer’s relationship with a brand (relationship drivers), and assess customer satisfaction with specific aspects of a product or service within the vertical (industry drivers).

The study leveraged the power of open-ended feedback and individual Net Promoter score to assess the importance of each driver in delivering customer satisfaction. While crunching down the whole study is beyond the scope of the post, we have extracted the core data analytics strategy to help you understand how airlines use NPS data to boost profits and improve customer satisfaction.

Importance v/s Performance: Classifying the Bottlenecks

Compared to other businesses, running an airline is an operational challenge, because many pieces in the system need to function flawlessly to deliver a delightful flight experience. But again, identifying the bottlenecks is not enough; classifying them based on their importance is.

For instance, United found that just improving the coffee made customers happier, while American Airlines teamed up with local logistics players to deliver baggage directly to their place, allowing customers to skip the queue. However, despite their proactive efforts, both these airlines find their place at the bottom of the list.

That’s the reason why the importance-performance model is so important.

It allows companies to classify bottlenecks and understand the business impact of strategic decisions. By mapping their strategies with customer emotions, a brand can eliminate all guesswork and get a clear perspective of what matters the most.

Here’s how it works:

1. 1. Identification: First, the industry and relationship drivers for the industry are identified. For example, industry drivers for aviation are more specific, like, staff attitude, seat comfort, flight entertainment, etc. On the other hand, relationship drivers are more generic, like, the reliability of services, value for money, online experience, etc.
   2. Classification: Once the drivers are identified, they are mapped against the mean satisfaction score and the relative increase in LTR score. So, if we had to plot a driver on the graph, we would have to consider the mean satisfaction score for that driver and the likely impact on LTR. For instance, based on the above graph, Southwest has a poor satisfaction score (6.6) for in-flight entertainment, but since the impact on the LTR score for the driver is low (0.42), improving the quality of service won’t have a drastic impact on customer satisfaction. On the other hand, drivers like staff attitude and check-in process have a high LTR score and mean satisfaction score, which means the airline needs to maintain its focus on these drivers, as they are important.
   3. Plotting: It’s clear from the graph that a relative increase in LTR measures the importance of the driver, while a relative increase in the mean satisfaction score measures the impact or performance of the driver in the industry. To make the assessment simpler, the study divides the plot into four equal quadrants by taking the midpoints of importance and performance metrics.
   4. Interpretation: Once the quadrants have been plotted, it becomes simple to understand which factors are pivotal to customer satisfaction. For instance, drivers that fall in the “high importance, low performance” section should be prioritized, as they deliver maximum impact on the LTR score and are one of the top reasons for customer dissatisfaction. Similarly, drivers in the “high performance, high importance” quadrant should be leveraged effectively, as these are the reasons that matter the most to the customer and make them happy with the business.

Lastly, the size of the bubble (as shown in the above graph) is determined by the percentage of customers that gave opinions on the driver, which means the larger the bubble, the greater the impact of the strategic change.

Now, using the theory as a reference, we will compare the best airlines on the survey – Southwest (highest percentage of Promoters) with the worst airline – United (highest percentage of Detractors). The analysis will help us break down the major reasons for customer dissatisfaction and analyze the key areas of improvement for each airline.

Southwest vs. United: What Separates the Best from the Worst

For plotting the competitive performance graph, the NPS framework was broken down into elemental blocks, so that the importance of each driver could be accurately gauged. While the gray horizontal scale spans the industry average, the blue dot indicates the score of the airline on that scale.

As you can make out from the comparison, Southwest leads the sector in almost every industry and relationship driver, except a few, like seat comfort or in-flight entertainment. However, a quick look at the importance-performance graph tells us that improving seat comfort or in-flight entertainment would have a negligible impact on overall customer satisfaction.

On the other hand, United scores low on almost every driver, right from staff friendliness to brand reputation. So, how does it identify which areas need the most attention? If we have a look at the importance-performance graph for United, it becomes simple to understand which drivers need to be prioritized.

For instance, improving product features, the reliability of services, or in-flight entertainment quality would have a major impact on customer satisfaction, which was probably not the case with Southwest.

That might make you wonder: how can flight entertainment matter a lot to United customers while being largely insignificant to Southwest customers?

That’s because Southwest operates on a low-cost model, focusing more on the factor that matters the most to customers — pricing, while United charges a higher ticket fare from customers, thereby increasing their expectations from the airline.

Improving Customer Experiences: The Road to Profitability

“You can either win with the best product, best price or the best experience.”– Sam Altman

Plotting the importance-performance graph using NPS data can measure the impact of a business decision on customer satisfaction and gauge the differential competitive edge. It’s a great starting point for airlines that want to improve their customer service and profit margins, but don’t know how and where to start.

Takeaways from the study

• Plotting the NPS score on the importance-performance graph helps businesses discover hidden bottlenecks and improve the overall customer experience.
• NPS provides a data-driven methodology to prioritize customer issues and gauge their ROI on the top-line, eliminating all internal “guesswork”.
• Segmenting NPS feedback with regard to industry drivers can be pivotal in measuring competitive differentiation within the industry, while plotting the score with regard to relationship drivers helps businesses in gauging overall customer satisfaction.
• Even within the same industry, customers can have different expectations from different brands, based on the product pricing and offering.
• Great customer service and profitability can go hand-in-hand when you have a framework to proactively listen, act and reflect on customer feedback.

Measure Your Net Promoter Score

The Net Promoter Score is undoubtedly reaching maturity since more and more companies across industries use the metric to understand how people feel about the brand, as well as measure customer satisfaction and loyalty. 

Retently makes it easy to measure the NPS score of your brand. With quick installation and easy-to-follow documentation, you can get actionable insights on how to reduce customer churn, grow revenue, and build long-term customer satisfaction.

Easily import your customers and keep their data in sync using our built-in integrations with MailChimp, ConstantContact, Zapier, etc., or use Retently’s extended API to connect your account with any other service. Create a free account now to try many other features and start gathering customer feedback.

The post How Airlines Use NPS to Improve Their Customer Satisfaction Ratings appeared first on Retently CX.