What Do Companies With Low Net Promoter Score Have in Common?

What Do Companies With Low Net Promoter Score Have in Common?

We’ve previously covered the common characteristics of companies with high Net Promoter Score, and boiled their success down to three qualities:

  • 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 in 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 insights that are helpful 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 greatest negative impact on customer satisfaction.

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.

At the bottom of the technology industry is antivirus software company McAfee, which earned a Net Promoter Score of 2.

Other brands in antivirus software, such as Kaspersky, report relatively high NPS, although they don’t provide exact statistics. From this, 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 of the complaints directed towards 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 automatic re-billing of customers’ credit cards.

This example isn’t a statement about McAfee’s specific practices, as they’re far from being uncommon in many industries. However, it’s clear that the companies that score lowest in NPS 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, it’s also used by many of the world’s most liked companies. 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.

Companies 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 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 that you’re transparent about how you’ll bill customers. Get aggressive or deceptive and there’s a good chance it will hurt your customer satisfaction.

Limited or poor quality support

There’s another common weakness among companies with low NPS – bad service. In a 2015 Temkin Group NPS Benchmark Survey, Comcast TV earned the lowest NPS both in its service category and overall – a score of -17.

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 its customers.

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 companies aiming to improve retention and increase their customer satisfaction. The first is that bad customer service can and will definitely hurt your relationship with clients.

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 likely kept some customers onboard, but at the cost of many others who deserted the company entirely.

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 an overall attitude of 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 of the companies with low or declining Net Promoter Score combine a downward trend with a poor approach to service.

For example, satisfaction amongst 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 make sure that 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 NPS of -8 in the USA.

In 2013, McDonald’s recorded the longest waiting time at its drive-thrus. And the waiting time is mostly influenced by the menu complexity. The chain started with 26 menu items in 1980, and the number increased to 121 in 2014.

In comparison, McDonald’s’ direct competitor, KFC, isn’t doing quite great, but at least they have a positive NPS of 14.

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. Sometimes NPS doesn’t actually matter and it can be affected by factors not related to the business’ performance.

A great example is Uber and Lyft. These two brands are almost identical in their service, and drivers often drive 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, while 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 highly crucial to retain your customers.

The correlation between satisfied customers and long-term revenue growth is undeniable. Some companies though chose fast revenue over customer needs, and got at the bottom of the NPS chart for their industry. This is 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 in regards to 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. Which proves that there isn’t a problem with the insurance industry (as it was the case with the banking sector in the US, as we mentioned above), but the problem lays within CIGNA’s internal policies and it’s denial to provide the product they’ve advertised.

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, a disaster while comparing with its competitors: Southwest (NPS 62), JetBlue (NPS 56) or Virgin America (NPS 48).

For years customers keep complaining about United’s delays, canceled flights, served food, baggage handling and having some of the oldest aircraft in the industry. In 2012, United was responsible for 43% of the total of complaints filed against all US airlines.

It’s worth mentioning that United always tracked their NPS score, but so do its much more appealing competitors such as Southwest and JetBlue. Why this 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 tracks NPS, it seems that it doesn’t act on their customers’ feedback, at least not fast and satisfactory enough. The most important aspect of an efficient NPS campaign is to close the feedback loop, and this is the only way to improve customers’ satisfaction and become a leader in your industry.

Measure and improve your Net Promoter Score with Retently

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. Start improving your NPS, retaining more customers and generating more revenue.

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