What's better for a company than lots of happy customers? Lots of happy customers who go around talking about their satisfaction and recommending the company. A survey of how often consumers talk up companies to their friends and loved ones reveals good news for high scorers and poor scorers alike.
Satmetrix's "Net Promoter" score takes the percentage of customers who are most likely to recommend a company's product or service, then subtracts the percentage that think poorly of it or badmouth it. Here are a few notable scores in several industries:
|
Industry |
High Scorer(s) |
Low Scorer(s) |
|---|---|---|
|
Airlines |
JetBlue |
US Airways |
|
Telecommunications |
Verizon |
AT&T |
Data: Satmetrix.
A look at these two industries suggests that there might be something to this Net Promoter measure. The airline industry has long been an albatross to many investors, with a few exceptions -- such as JetBlue and Southwest. These two have upped their revenue over the past three and five years, while many airlines, such as US Airways, have struggled just to get out of the red. Indeed, many airlines are now trying to merge with each other to cut costs and reduce competition. US Airways planned to join up with UAL's United until it caught United making eyes at Continental.
In terms of net promoters, JetBlue and Southwest each topped the industry average by more than 40 points, while US Airways experienced turbulence with a score of negative 16%. While most airlines these days are starting to charge for everything from checked bags to pillows, Southwest doesn't charge for bags, and JetBlue offers extra legroom, TV, and above-average snacks.
Can you hear me now?
In telecom, Verizon's score of 41% doesn't seem that terrific next to, say, Apple's 78%. But compared with AT&T's 9% and Sprint's 10%, it actually is a great number. Verizon's (relatively) strong consumer appeal will help the company as it aggressively markets its smartphones and 4G network. AT&T is a giant with more debt than its peers, but its iPhone carriage gives it a boost. The customers protesting its pricing via a Twitter petition probably won't do anything for its Net Promoter score, though. Sprint remains troubled, with shrinking subscribers and cash flow and hefty debt; however, its new EVO smartphone is doing well.
The news is clearly good for standouts such as Southwest, JetBlue, Apple, and Verizon. Satisfied customers who spread the good word can only help their businesses. But there's a silver lining for the laggards: They all have room for improvement. Even Verizon could increase its score considerably. By providing better products and services, and better customer service, good companies can become great companies.
Top Net Performers may be very promising, but an even more attractive opportunity lies abroad, in India.
