A recent research project for a client opened our eyes to the impact that high-quality customer service has on growth.  This client has used our ExperienceConnect transactional survey process since 2007.  We compared the service growth over a four-year period by individual customer account with the responses from each customer account to the Net Promoter question (willingness to refer).

As the chart shows, there were some big differences.  If the customers started out with a relatively high level of satisfaction and the customer remained satisfied, service revenue grew at a compound rate of 4%.  If the Promoter response went down over time, so did revenue at a scary compounded rate of almost 12%.  There are at least three messages from this finding:

  1. This confirms a lot of other research about how good service influences customer loyalty.
  2. Service consistency matters.  Notice that revenue grew only where the service quality started high and stayed high.
  3. Even when service improves it still takes a while for customers to reward a supplier with more revenue.  The customers that started with a lower Promoter response but improved still showed a negative compound annual sales growth rate (though a lower rate than those with a declining Promoter response).

I welcome your comments.  What are you finding regarding connections between service quality and other business outcomes such as sales or profitability changes?  My email is [email protected].

Lynn Daniel

The Daniel Group

Net Promoter and NPS are registered trademarks of Bain & Company, Inc., Fred Reichheld, and Satmetrix Systems.

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