CustomerGauge News Digest February 2008
Philips chooses CustomerGauge to measure Net Promoter Score
We are proud to announce that Philips Consumer Products chose CustomerGauge as their Net Promoter and customer feedback tool for the Philips Online shop. We have been partners of Philips since 2006, and much development work on CustomerGauge was done in conjunction with Philips. Full story here.
NEW FEATURES
Upgraded Comments Classification
How can you prioritise where to improve your business first? And are you getting better or worse in specific areas? CustomerGauge helps you by reviewing customer comments, and helping you organise them by assigning “reasons” why each customer was unhappy (or satisfied). The result is a “Voice of Customer” neatly organised…. [more]
CustomerGauge adds Automatic Testimonial Publisher
“When I first started in marketing, we used to proudly publish the comments of satisfied customers in our monthly Tecno catalogue”…. now a new feature to CustomerGauge that allows clients to simply publish comments in seconds [more]
CUSTOMER ENGAGEMENT
Net Promoter Score to win in ‘08!
“Prediction is very difficult, especially about the future” said the Danish physicist Niels Bohr…. Learn how IBM predict that 2008 will be the year of Customer Satisfaction – or at least it’s the No.1 issue for retailers…we predict that more companies will focus on the customer this year, and that they will use the simple tool of the Net Promoter Score [more ]
Good is (on the side of the) Right
In the world of surveying, which side is “good” on? Left? Or right? Read why it’s almost always on the right in our “Survey Idols” section [ more ]
Final Thought:
Percentage** of business executives believing they are doing a good job in serving customers: 80%
Percentage of customers who agree: 8%
CustomerGauge is a hosted software tool from Directness BV that helps organisations to measure customer loyalty, understand customer sentiment, and respond to customer comments. Compatible with the Net Promoter® Score*, CustomerGauge allows organisations improve customer relationships and encourage loyalty, most immediately in e-commerce functions
Other Resources:
- Have you taken our test drive yet? Try out our demo-site… (get a full log-in on request).
- 2-minute guide to the Net Promoter Score: All you need to know about NPS in a cartoon format…
- To subscribe/unsubscribe to our emails go here.
*Source: BAIN and Co 2006
Net Promoter Score to win in '08!
“Prediction is very difficult, especially about the future” said the Danish physicist Niels Bohr. This week the news is dark and gloomy about recession around the world, inflation and lack of business confidence, and it’s more difficult than ever to forecast what will happen over the next year.
But I’m going to stick my neck out and predict that more companies will focus on the customer this year, and that they will use the simple tool of the Net Promoter Score* (or NPS).
My crystal ball is helped by a new survey from IBM and US National Retail Federation which asked 418 executives in 137 retailers their top priorities this year. The number one issue for 2008 is Customer Satisfaction (up from 5th place last year).
IBM said that customer focus is always high, but this is the first time that is projected to be the most important area, due to customers becoming increasingly demanding. Internet and mobile phones are cited as reasons for this change.
For most businesses, the first place to start an improvement project is by measurement. In a recent issue of the Harvard Business Review a list was given of key performance indicators for leading companies including Return on equity (ROE), Operating Margin, Equity Ratio, Return on Investment (ROI), Liquidity ratio, Personnel costs (as % of sales), CAPEX (as % of sales), ROCE, EBIT and so on.
I had to re-read the list again to check. There were NO customer centric metrics. Nothing to indicate how well a company is performing in the eyes of its customers.
However, it is easy to see why. All the metrics listed above are clearly defined in business schools, and codified by accounting standards boards to help investors understand how much a company is worth or is performing. And until recently, marketing people have been hopeless at defining a standard for customers satisfaction.
But the Net Promoter Score has the power to change that. It is a simple to measure metric (just one question) and easy to teach and understand internally. In the last 12 months I have been hearing more companies adopting (or planning to adopt) NPS as their measurement of customer loyalty.
We have had much interest in CustomerGauge (which was the first tool designed specifically to measure NPS) from organisations who want to get closer to their customer base, and improve the customer experience. So much so, that I believe that in the next few years NPS will be as important a score to report as earnings growth, market share or profits.
And I believe that 2008 will be the tipping point for NPS. This will be the year that Net Promoter together with its running mate Customer Focus will be elected by business!
Waitrose is #1 UK retail experience
Waitrose supermarkets are the UK’s best stores according to a report out today from consumer group Which?, and not surprisingly are able to persuade customers to pay a premium in return for better service.
Which? surveyed nearly 11,000 shoppers and asked them to rate customer satisfaction, convenience, experience, pricing and products. Waitrose and partner store John Lewis topped the survey with 87 and 78 points respectively. Other high places were given to independent book and DVD stores, Marks & Spencer (who must have been happy to climb to 6= place), Lidl and Aldi (proving that budget stores can also score highly in customer satisfaction).
Customer focus no doubt assisted Waitrose to bring in a good year, with high sales growth at 4.1% – and in the key Christmas week, up an impressive 28.5% at £79.2 million.
At the back of the survey were TopShop, Focus, Currys/PC World, Somerfield, Woolwooths, JJB Sports. In last place (77th) were JD Sports – scoring 33 points overall, but only 6% on customer service.
Many sources for this, but the Independent remarked that “JD Sports told Which? Magazine that it had appointed researchers to find out the reason for its unpopularity”.
Can we respectfully offer some advice to poor Wayne Davis, head of retail at JD: “Wayne, don’t hire researchers! Your customers are your best consultants. Listen to what they say, prioritise, and then take one action per month to fix it. Track your Net Promoter Score, publish internally, and re-focus the company around the customer. Regards, Adam”
PS If in need of a good tool for this, we humbly recommend CustomerGauge.
Old School (Sony)Style
As a former member of SonyStyle in Europe, I think it’s always fun to see how Sony’s Direct Sales operations started. So I was clearing up the attic and throwing out rubbish from our new house’s former resident and I found this A5 format catalogue left behind by our new house’s former resident: “VAIO Accessories straight from the source: Sony”.
I recognised it at once as one of the first (if not the first) SonyStyle catalogue. It’s available online here (PDF 5Mb) for your download pleasure – but I expect this is one for the collector only as it lists now defunct VAIO accessories, all no longer available I’m guessing.
Customer Survey Idols #3: The Good Communicator
I am indebted to Church of the Customer Blog for this tip. It’s an email invitation to fill out a survey for a Chicago Pizza company. I liked it for the polite, yet engaging tone of the invitation to comment. It actually does a great job of selling, and shows a lot of thought.
Hi, My name’s Mike and I’m the Manager at HomeMade Pizza Company in Evanston. I just wanted to thank you for choosing HomeMade. The way we figure it, there are a whole lot of places you could’ve tried for dinner, so we really appreciate the fact that you went with us.
And if you get a chance, we want to hear what you thought. Do you have any questions or comments about your HomeMade experience? Any rants or raves? Whatever it is, let me know. Feel free to give me a call here at the store, or e-mail us at [note: I'll save them from the spambots].
Thanks a lot for trying HomeMade. I hope to see you again soon!
After commenting, this customer got a response direct from a VP.
Hey Christine — I just wanted to thank you for your nice email to Mike! Bottom line is, we’re really glad you finally had a chance to stop in and, of course, I’m even happier your guys enjoyed everything — fantastic! Glad you’re planning on coming in again, too — we’ll be looking for you soon.
And keep in touch — if you ever have any questions/comments/suggestions, we’d love to hear them — we want to make sure we’re keeping you happy.
Thanks again for the great feedback Christine, we really appreciate it! Best — Shane.
I like the way that the company’s personality shines through in both of these communications. This is how customers like to be treated!
What's the Picture on a BRAVIA like? Lessons in checking your HTML emails…
“Dear My Sony.
Thanks for your marketing email to me today. Yes, I would like to enter your competition to “Win a 40″ BRAVIA LCD TV”. If only I could see the images in the mail!
No problem, I thought. It must be the spam blocker, so just in case I’ll just click on the link that helpfully says: If for any reason you are unable to read this e-mail, please click here.
Sadly the same result. I still can’t see the pictures in your email. Also the link to the pictures www.charterhouse.tv seems to be broken. Thought you would like to know, Adam from Amsterdam”
Well, it’s a lesson to all of us who do email marketing to our customers. If Sony can make a mistake like this, so can you. Here’s the lesson: Always check and re-check your HTML emails, or at least make sure the links go to a solid landing page.
How to jump the queue at boarding time
I liked this snippet this morning from Brand Love Hate: “On a trip to San Francisco last week, I was sitting in SFO waiting for my JetBlue flight when I heard the boarding announcement for a nearby Virgin America flight. Everything seemed normal until the gate agent said that passengers wearing red – Virgin’s brand color – could board first. For some new customers, this appeared to be a surprise, but others who clearly had flown the airline before were ready to be rewarded for their fandom.”
Another reason to fly Virgin, another good way of rewarding your customers.
]]>
CustomerGauge.com Live Today
I am delighted to report that after a year of hard work, many nights and long days, CustomerGauge.com is live.
The application is working well, and has proved itself in enterprise enviroments. Now we are poised to measure, understand and respond where no man has gone before.
Many thanks to Mila, Roy, Mariangela and Enzo for so many hours along the way.
Adam
Get closer to your customersCustomerGauge helps organisations to measure customer loyalty, understand customer sentiment, and respond to customer comments. Compatible with the Net Promoter® Score*, CustomerGauge allows organisations improve customer relationships and encourage loyalty, most immediately in e-commerce functions. more |
]]>
Radiohead's Price Strategy Signals Changes for Direct Sales?
Heavy coverage today on BBC and other sources of Radiohead’s decision to let fans pick a price for their latest album, available online.
It’s a good example of direct sales. The band are not signed to a record label. They have creative freedom, and an army of loyal fans (and some lapsed fans, like me). So they can market directly to their customer base.
This strategy exhibits many of the classic points of the “9P” model of direct sales. They have Permission – no record company to upset, no channel to undercut (although predictably the established industry and channel is quick to criticise). Promotion is taken care of through emails to the fanbase (plus lots of bonus PR). The Proposition is right: It’s a pre-release strategy. You can buy before it’s in available in the shops, but not after. And the Price is based on what their fans would pay – probably between $5 – $10, as that is less than a shop of itunes bought album, but enough to feel that you are funding the band’s craft. It’s the ultimate test of value.
It will be interesting to see if it’s judged a success – I’m sure it will, but partly because it’s the first. It may eventually erode price of music to a sensible level (hurrah!).
Of course, Radiohead have some limit to their risk. Marginal costs are low as downloads cost little to process. But can the consumer electronics industry learn anything here?
Suggested learnings:
- Pre-release strategy to minimise damage to channel relationships: Product available online first, then closed at certain date – this helps predict eventual channel sales.
- Special product not available anywhere else – there is something special in the purchase. or real fans, they will see this as an extra bonus. They will buy the shop item anyway,
- Available to fans only (keeps the brand special) – shows value of CRM strategy
- Price set by fans – will work if in a limited edition run of a product. A premium price may even be established. Radiohead also offer a full-fat $40 version with CDs and artwork (probably the biggest source of profit here).
Apply these lessons to your business with boldness like Radiohead, or contact us at Directness for some more help on your direct sales strategy.
]]>
Check-ups make you feel better
This morning I had a full medical checkup for insurance purposes. I was prodded, poked, tickled then drained of blood and other liquids. Although I was confident of my fitness level, these tests are always slightly scary – I’m sure everyone treats them with trepidation. I had eaten sensibly for a week before the test, laid off drinking, went for a run – that sort of thing (as if it would make a difference…). The final test had me hooked up by 12 tentacles to a hi-tech ECG machine, with a display like the one above.
It led me to think that the very act of testing humans always has other effects. It’s analogous to the Schrödinger’s Cat thought experiment (in a nutshell: finding out or measuring the state cannot be done without the observer interfering with the experiment — the measurement system or observer is entangled with the experiment. More here, fact fans). In this case, by testing me, I considered the state of my health and made some (admittedly feeble) attempts to impress the examiner by doing some workouts beforehand – so it may not have been a totally accurate assessement of my steady state health.
My speciality is the gauging of customer sentiment. So what is the Schrödinger Cat issue with surveying customers?
I believe that by the act of asking a customer a simple question post-purchase has a strong effect. Firstly, the act of following up a transaction is a basic human politeness – as we were taught when young to write a thank-you letter to Auntie Ethel. Secondly, asking for their opinion on the transaction forces the customer to recall the experience and make a judgement call. In the case of good buying experience, the customer should find the act of recall enjoyable, making the connection with the brand in the mind a positive one. So you get a free marketing hit.
In the case of a poor buying experience, the question may trigger “buyers remorse”, a form of cognitive dissonance. Or customers may take the opportunity to vent their anger. He or she may regret the purchase, but at least if you act on the “Vox Clientis” (Voice of of Customer), it gives you a second chance to correct it. Disatisfied customers may go on to badmouth you, but if you ask, you are able to gauge the percentage that might do.
So as I sat there, pedalling my way to 300W and my stress limit, I mused on how similar our CustomerGauge application is similar to the ECG machine. Both have multiple monitors, automatically checking “heartbeat” and stress levels, provide insight and help to ultimately improve. In our case, it’s taking the pulse of the customer, and giving them an instant check-up. For the customer, it’s a chance to think about their own “purchase health”.
Oh, and after spending 20 minutes on the stress test machine, I am pleased to say I passed it with flying colours. At 42, I’m delighted to report that they found me fitter than as a butchers dog, apparently.
]]>
