2004 Q3 Net Promoter Index
Based on research conducted by Bain Associates on more than 400 companies representing 28 industries and over 130,000 customer survey responses, an index has been developed that links survey responses with actual customer behavior – purchasing patterns and referrals – and ultimately with company growth. This research provides a strong correlation between a company’s growth rate and the percentage of its customers who are promoters – that is, those who say they are extremely likely to recommend the company to a friend or colleague.
After analyzing hundreds of customer survey questions, the researchers found one question that can be linked directly with the growth rate of a company. Based on the likelihood of recommending a company’s products or services to friends or colleagues, the index is calculated by taking the percentage of promoters and subtracting the percentage of detractors. The passively satisfied are not included in the calculation. Company size has no relationship to their net promoter status. The median net promoter score for 400 companies was 16%.
The Index can also be used in surveying your competitors and comparing your Net Promoter Index to competitors. You can then determine how your company stacks up within your industry and whether your current Net Promoter number is a competitive asset or liability. For example, when comparing airlines, the airline with the best three-year growth rate was Southwest Airlines and it had the highest Net Promoter Index of 52%. For internet service providers, MSN had the highest 3 year growth rate and it also had the highest Net Promoter Index of 9% within the industry.