Service Quality and Sales Growth: Another Connection

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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 transactional survey process for five years. 

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. 

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There are at least three messages from this finding:

  1. These findings confirm 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?  


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

 

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