Rent-to-own News - Study spotlights impact of customer experience

No business owner has to be told what a single negative review from a customer can do.

But a few statistics can’t hurt.

The just-released 2011 Net Promoter Industry Benchmarks study of more than 22,000 U.S. consumers nationwide, found that bad customer experience forced 22 percent of customers to stop doing business with a company during the second half of 2010. It also suggested word-of-mouth endorsements from friends or colleagues are the most trusted form of information when purchasing.

So that one bad review online -- whether on Facebook, Yelp or any number of electronic sounding boards portal --  may be helpful in fixing some customer service problems, is is also inflicting untold damage on sales.

“Having a great customer experience is critical to a company’s financial performance because it impacts both customer retention and new customer acquisition through word of mouth,” said John Abraham, general manager of Net Promoter programs at Satmetrix. “These benchmarks allow companies to compare their performance to industry peers based on an industry-standard measure of customer loyalty. But the big challenge for most companies is to figure out how to use customer feedback to drive improvements in their customer experience. Measuring is just the first step.”

APRO last week wrapped up two "Potential Customer" studies specifically for the rent to own industry in conjunction with state rental dealer associations in Ohio and New York. The studies gauge customer and "potential" customer insights and impressions of the rent to own industry to determine why those who fit the industry demographic do not rent.

A similar study will be conducted next week in Tampa, Florida and a Texas study took place last month. The results of these and all APRO "Potential Customer" surveys over the past two years will be compiled into a specialized RTO Marketing Plan by Jill Adams McDonough -- an award-winning developer of PR and marketing programs. The marketing plan will be provided for free to those attending the APRO Convention in Little Rock July 11-14.

The Satmetrix study, gauges customer experience and bottom line impacts on the insurance, financial services, airlines, telecommunications, technology, retail and online services industries.

This year’s winners included well-known brands such as USAA, JetBlue Airways, Symantec, Trader Joe’s, Vanguard, Amazon.com, Apple, Google, Costco and American Express.
The rankings are based on survey responses from more than 22,000 U.S. consumers nationwide, and include ratings for 170 individual brands across 17 industry sectors. Each consumer rates up to two companies from whom they have purchased products or services within the previous 12 months.

A company’s Net Promoter Score, or NPS, is based on customers’ likelihood to recommend the company. NPS is calculated as the percentage of customers who are Promoters, rating the company 9 or 10 on a zero-to-ten point scale, minus the percentage who are Detractors, rating 6 or lower. Consumers also rated each company on various aspects of customer experience, including product or service features, customer service and overall value, allowing Satmetrix to analyze drivers of loyalty and performance gaps for each company.

The study encompassed 17 specific competitive sectors across seven industries. Highlights include:

• Financial Services: USAA’s direct banking operation led the banking sector again this year with an NPS of 87%, the highest NPS recorded across all brands and industry sectors. Citigroup and HSBC Bank were the only two banks profiled with more Detractors than Promoters, earning an NPS of negative 6% and negative 13% respectively. In the brokerage and investment category, newcomer Vanguard took the top spot at 56%. The credit card sector average moved up 9 points over last year, with American Express remaining in top position at 41%, 61 points ahead of sector

• Insurance: The average score in the health insurance category climbed 7 points from last year but remained the lowest of all sectors profiled. A new addition this year, Kaiser Permanente, led the category with a positive NPS of 28% compared to the sector average of negative 5%. CIGNA once again ranked last among major health insurers with an NPS of negative 24%. The average NPS for life insurers dropped 7 points compared to last year, with State Farm still leading at 19%. USAA dominated both the auto insurance sector at 73% and homeowners insurance at 78%.

• Airlines: JetBlue Airways (60%) and Southwest (59%) once again dominated the airline rankings, scoring nearly 45 points above the industry average with similar scores. U.S. Airways trailed the segment at negative 12%. JetBlue Promoters referenced the in-flight experience, extra legroom, quality snacks and television, while Southwest Promoters praised the airline for its friendly service and for not charging baggage fees.

• Telecommunications: Metro PCS took the top spot in the cellular phone service sector with a score of 41%. TracFone and Sprint saw the biggest improvements with increases of 8 and 10 points respectively. In Internet service, Verizon led with an NPS of just 13%, highlighting that providers in this sector continue to struggle to build positive connections with the customer. Verizon also led in the cable & satellite TV category at 28%, 12 points higher than last year’s winner, DIRECTV.Technology: Apple continued as the top performer in the computer hardware sector with an NPS of 72%. Sony made the biggest jump in the category, increasing 12 points to an NPS of 46%. In the consumer software sector, Symantec earned top position with an NPS of 44%, increasing its score by 8 points compared to last year’s benchmark.

• Online Services: Amazon.com led the online shopping sector with an NPS of 70%, edging out other leading online sites such as eBay and the Amazon.com subsidiary Zappos.com. In the online search and information category, Google and Facebook led again with scores of 53% and 52% respectively.

• Retail: The grocery and supermarket sector achieved the highest average NPS of all industries examined, with Trader Joe’s increasing its score by 14 points to 82%. Costco led again among department, wholesale and specialty retailers with an NPS of 77%, while Target outpaced Wal-Mart by 29 points. Among the 30 retailers profiled, drugstore chain Rite Aid lagged behind all other brands with an NPS of just 4%.

• Full reports are available for purchase on www.satmetrix.com and www.netpromoter.com.