It seems ironic that the wireless provider with the lowest NPS score in the business has teamed up with the highest-ranking hardware manufacturer. But there it is: AT&T’s exclusive contract to support Apple’s iPhone makes for one of the oddest couples around.
The laggard here is AT&T, which just won the dubious distinction of coming in dead last in the latest Satmetrix NPS survey of eight major cell phone providers. AT&T‘s NPS was barely positive at 9%—37% promoters minus 29% detractors. Contrast this to top-ranked Verizon with an NPS of 41%, 55% promoters and 15% detractors. (The disparities in subtraction are due to rounding.) The 32-point gap that separates the two typically reflects serious performance problems for the loser.
AT&T’s top-performing partner, of course, is Apple. Satmetrix’s survey of consumer electronics companies put Apple far in the lead: its NPS of 78% (81% minus just 4%) is 42 points higher than second-ranked Toshiba. The survey didn’t cover mobile-phone manufacturers. But given the iPhone’s dramatic growth and Apple’s overall scores, it’s a safe bet that the phone would get outstanding Net Promoter ratings.
Perhaps AT&T’s contract with Apple has helped it prop up results despite a substantial disadvantage in NPS. But at some point, Apple will almost certainly develop an iPhone for the Verizon network. And companies with top-ranked NPS typically work effectively together as partners, in large part because they share a cultural value of focusing on customers. So an eventual Verizon-Apple partnership is likely to lead to an abrupt shakeup in the wireless marketplace—a shakeup that AT&T’s investors and leadership team are not likely to find comforting.
How did Verizon generate such a lead versus AT&T despite its failure to win the iPhone? I happen to know that Verizon has been concentrating on improving its NPS for several years (see my blog from September 24, 2007 detailing my experience with Verizon). That work has paid off in handsome improvements in customer loyalty—witness Verizon’s climb to the #1 ranking in NPS.
What should AT&T do to avoid calamity? Well, executives might look to some of the NPS success stories for lessons on how to make quick progress in creating more promoters and fewer detractors. Charles Schwab is the current champion, to my knowledge, with an astonishing improvement of 70 points—from -35% to +35%—over a four-year period (see my blogs of October 21 and November 13, 2008).
But this kind of change can happen only if the senior leadership team follows the Schwab example: making NPS a mission-critical priority that touches all parts of the business, from operations and finance to marketing and human resources. If leaders view NPS as nice but not vital—merely a customer service initiative—then progress will be modest at best.
Will AT&T realize that it needs to get serious about creating a customer-focused culture and improving its NPS relative to Verizon? Only time will tell. But one thing is certain: this case study will be written up in the history books. And it will become the legacy of the current AT&T leadership team.