New research proves customer happiness doesn't pay

In my recent video I reveal new research that challenges one of our most universally held business beliefs. Using our huge customer data set we tested the relationship between customer satisfaction and loyalty, and the results are stunning. Using customer Net Promoter Scores (NPS) we consistently find that there's literally no statistical correlation between NPS and how long customers stay.

In fact, this result holds even when the responses are divided into the three NPS groups: "Promoters" (scores of 9 and 10), "Passives" (scores of 7 and 8), and "Detractors" (scores of 0 to 6). There is no statistically significant difference in average lifespan between the groups. In fact, the differences are so small that they amount to a few days of customer life over four years!

But as I discussed in my full video, there is a significant difference that appears - not between the levels of satisfaction, but for those who didn't respond to the NPS survey at all. In fact, the average lifespan for nonrespondents is significantly less than half of those who responded! This is important because it clearly indicates that the level of customer engagement strongly correlates with customer lifespan, and points to the conclusion that customer results are the primary driver of retention.

But, many have asked about how this relates to the research that has repeatedly shown companies with a high NPS tend to also have higher retention. Well, this is where it gets interesting because that's a totally different question. What we tested is the relationship between NPS and lifespan for individual customers. By contrast, those other tests instead compare the overall NPS and customer retention for the whole company.

So how can there be a correlation between a company's overall NPS and retention, but that relationship vanishes when you look at individual customers? The answer is that companies that are good at producing high satisfaction tend to also be good at other things, like delivering customer results. In other words, what actually drives retention is customer results, and it should not come as a surprise that well-managed companies that are effective at this also tend to be effective at customer satisfaction. Our research supplies the key missing piece to the puzzle by proving that it is the results rather than the satisfaction that drives retention.

So if customer satisfaction doesn't drive retention, then what does? The answer is clear: by far the strongest predictor of customer retention is measurable customer results. Watch my video to learn why this is and how customer results are the key to retention.

Watch the full video: