Consumers are more loyal to multiline carrier State Farm than they are to any other life insurance company, according to new research.
In a 2014 consumer Net Promoter Benchmark Study conducted by Satmetrix, State Farm tops other life insurers when measured against a customer loyalty metric used in the research. Dubbed Net Promoter Score, State Farm garnered an NPS of 45 points, 11 points better than second place New York Life (34 points). Allstate, occupying third place, has an NPS of 29 points.
State Farm leads on all key customer loyalty drivers, including company reputation, buying/sign-up experience, ease and convenience of finding policies and acting in customers’ best interests. Here is a breakdown by overall score and category of the of three top three life insurers:
The Net Promoter Score is a loyalty metric calculated by placing a company’s customers into three categories: Promoters, Passives, and Detractors. Customers are asked one key loyalty question: How likely is it that you would recommend [Company X or Brand X] to a friend or colleague? Customers respond on a 0-to-10 point rating scale, with 0 being not at all likely, and 10 being extremely likely to recommend. Responses are categorized as follows:
• Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others, fueling growth.
• Passives (score 7-8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
• Detractors (score 0-6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.
The Net Promoter Score is calculated by subtracting the percentage of customers who are Detractors from the percentage tagged as Promoters. The resulting NPS can provide insight on competitive position among companies in a given industry. By understanding attributes of the customer experience that influence the recommended score and NPS, companies can make improvements to product and service design and delivery to support profitable growth.
The Net Promoter Benchmarks are compiled by Satmetrix, the co-developer of Net Promoter, to help companies compare their Net Promoter Score performance to other leading brands. The business-to-consumer benchmarks rate leading consumer brands across a variety of industry sectors and countries.
Data for the 2014 US consumer benchmark was collected in January 2014 using an opt-in email survey with more than 23,000 individuals in the U.S. across more than 219 brands in 22 industry sectors. The database includes brands for which 100 or more responses were received regarding the company’s products and/or services. This tends to capture the largest companies operating in the market, but is subject to some variability based on the respondent sample.
Net Promoter, Net Promoter Score and NPS are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc. and Fred Reichheld.