Decoding a Viable Metric for Measuring Customer Loyalty in Travel

The so-called performance metric Net Promoter Score (NPS) has certainly faced some scrutiny, but with over two-thirds of Fortune 1000 companies using it, no one can deny the wide adoption by brands of this “one number you need to grow.” It’s definitely a number that is taken seriously by many industries. Travel is no exception. Research done in 2019 by NICE Satmetrix in its  U.S. Consumer Net Promoter Benchmark report, surveying 68,000 respondents and covering 23 industries, revealed that in the travel sector, airlines have been leading with an average NPS of 39. Hotels follow with a score of 36, and travel websites have an average of 18. Knowing your company’s NPS is great, particularly when it acts as a benchmark to competitors, but actually understanding the reasons behind the score is where the secret lies. How to Measure NPS “The one number you need to grow” became widely known in 2003, released in the Harvard Business Review and coined by Frederick Reichheld. Its purpose was to minimize the use of complex traditional surveys in evaluating customer satisfaction. More importantly, what made many companies jump on the wagon of NPS adoption was the finding that Reichheld had reported: high net-promoter percentage is strongly correlated with high revenue growth across many industry sectors. NPS is measured on an 11-point scale from 0–10, presented with the question that asks: “On a scale from 0–10, how likely are you to recommend this company to a friend or colleague?” Promoters are grouped on respondents who selected 9–10, passives are those who selected 7–8, and detractors are between 0–6. To work out the score, the percentage for the total detractor scores needs to be subtracted from the total percentage of the promoter scores. In doing this, the score is calculated as a number and not a percentage between -100 and 100. Zero is considered a fairly reasonable score. However, the aim is to be 50 and above, which means the percentage of the promoters is at least 50 points more than that of the detractors. If it drops below zero, then companies are entering the red-flag zone, with more detractors than promoters. Promoters are seen to be a brand’s advocate, and more brand advocates are associated with more revenue. Passives are somewhat undecided, and detractors will disparage a company based on their last experiences. With this metric, a company can continuously measure their performance without a customer hav