We’d like to share a short 6-step plan for customer retention, based on some years working in e-commerce. We’re going to find some key customers that you can rescue, and others that you can reward. Then help you reach them and increase sales.

Step 1. Segment your customer base. Rank your customers by amount of spend, then make the cut at a suitable point – somewhere like 10 – 20% of your total customers.  You’ll probably be aware of the 80-20 rule (sometimes named the Pareto rule) which helps explain how a small number of customers are responsible for much of the sales (20% customers drive 80% sales). In the case of e-commerce, it’s often more extreme. We found on some sites that around 10% of the customer base brought in 50% of the revenue (and even more profit if you take into account acquisition costs). When you do the analysis, you may find it’s just a few hundred customers who make a sizable contribution.

Step 2. Identify your loyal customers. Survey your customers using the Net Promoter® Score question. You can find out how to do it in our 2-minute guide to the Net Promoter Score.   Ask “Would you recommend us to a friend of colleague?”, with a 0 – 10 scale. Use the results to understand who in your customer base are “promoters” or “detractors”. You may get up to 30% of your customers responding, so this is a very good way of dividing up the base. Don’t forget to ask for customer comments.

Step 3.  Draw up the matrix. See the chart above. On one axis, plot customer spend (or value). On the other, loyalty. In the top boxes you should have a manageable number of customers who represent a sizable portion of business, divided into those who would recommend you (promoters) and those who would not recommend you (detractors).

Step 4. “Customer Rescue”: Find the customers who are most at risk from defecting: High value customers that scored low ratings. If you do nothing, you risk losing repeat sales, or lose them to a competitor. At worst, they may warn their friends from buying from you. By reading their comments you can understand what the issues are. Don’t waste time – divide up the numbers and get your team on the phone to them within 24 hours of harvesting their comments. Failing that, personal emails will do. Acknowledge any problems, apologise if needed, and ask what it will take to put it right. Often, customers will make allowances for errors – and if you can surprise them by over-delivering on a fix, you may even turn them into evangelists.

Step 5. “Customer Reward”: Identify the high spenders who rate you highly. These are customers who are likely to make a repeat purchase, and with luck, bring you new customers. So give them the tools to do so. In the excellent book  Creating Customer Evangelists (Huba/McConnell) you can get some good ideas on how to turn customers into referral machines – offer new product information, ask for product feedback, give small gifts. Surprisingly, there are more effective actions than  financial incentives.

Step 6. Automate and track the progress. This retention model is not a one-off task – the successful companies bake these process steps into their sales DNA, and monitor which actions are most successful, while reducing the number of detractors. Keeping a customer is far cheaper than finding a new one.

Do the hard work, easily

Yes, you can do all the above steps using manual analysis. You can do it for next to nothing with low cost survey tools, if you have spreadsheet skills and plenty of time.

However, there is an easier way: CustomerGauge automates all the steps for you: segmenting, surveying, reporting, closing the loop. By integrating with e-commerce systems, CustomerGauge can survey every transaction with the Net Promoter Score question, and can often reach 30% response. Thanks to special reporting, the system automatically ranks customers (and repeat orders) by value, showing results in real-time, and providing call- and email-lists for actions. CustomerGauge even tracks open customer issues with internal workflow, and reports on returning customers.

Now all you have to do is come up with some creative ways of keeping your best customers recommending you to others!

CustomerGauge has built-in tools to identify your most loyal and high-value customers

Learn for free

Our upcoming webinar  “Learn how to increase customer loyalty and grow online sales automatically” on 10 Feb 2010 has additional resources on how to keep customers. Details/sign-up here.

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Net Promoter Score with qualifications on Document of Record from CustomerGauge

Amsterdam, 1 Feb 2010 – Press Release:

CustomerGauge, provider of a hosted software solution for automatically surveying customers and calculating Net Promoter® Score,  announces a new tool designed for small and medium enterprises. The new tool, “CustomerGauge b2b Edition”, allows companies to survey their customers or channel partners using the enterprise-standard Net Promoter Score, quickly, easily and at a breakthrough cost.

In response to the recent trend of companies announcing a Net Promoter Score without  qualifications, the new CustomerGauge tool features a Net Promoter Score “Document of Record” listing the relevant information. This document acts as a certificate, and can be published internally within the organisation, or displayed online publicly to support press releases and act as a benchmark.

“We have been collecting company scores on press releases for our Net Promoter News site for over a year,” says Adam Dorrell, Managing Director, CustomerGauge “and we have seen a wide variety of reporting methodology, using different scales or with no sample size detail. To help the growing Net Promoter community, we have developed a Document of Record, which lists the relevant information in a certificate format. Using this certificate will allow companies to establish a new credibility with their Net Promoter Score reporting”.

Full size document of record (click to view online)

View our AcmeB2B demo site certificate online here

CustomerGauge b2b Edition also features HTML branded emailing with reminders, surveying in multiple languages, a real-time dashboard, advanced reporting showing scores for customer companies and individuals, segmented scoring and classification of “voice of the customer” comments. It also includes many features found on high-end systems – for example, results for separate divisions can be rolled up on to a single dashboard for internal comparison.

CustomerGauge b2b Edition is available immediately. Clients can be surveying within a few days, with results usually with 24 hours. System pricing starts at €3900 (approx US $5490), including three month subscription.

http://www.customergauge.com

For product details and online demo, please contact info@customergauge.com.

About CustomerGauge

CustomerGauge measures loyalty and collects feedback to help companies to understand customer sentiment, centered around the Net Promoter Score standard. It is optimized for e-commerce and can be rapidly deployed anywhere in an organization, without investment in capital equipment or IT assistance. Customers include Philips, Canon and CMC Markets. The company is based in Amsterdam, NL.

About the Net Promoter Score:

Net Promoter® is both a loyalty metric and a discipline for using customer feedback to fuel profitable growth in businesses. Developed by Satmetrix, Bain & Company, and Fred Reichheld, the concept was first popularized through Reichheld’s book The Ultimate Question, and has since been embraced by leading companies worldwide as the standard for measuring and improving customer loyalty. Details: www.netpromoter.com *Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld.

2-minute guide - the Net Promoter Score Comic in Polish

We were delighted to be contacted by Marcin Malinowski, a Poland-based Certified Net Promoter® Associate from Philips, who asked if we minded a translation of our famous cartoon guide to the Net Promoter Score®.

He also is happy to share his work here, so we would like to present to the Net Promoter community his Polish translation of our comic as an image (1.7Mb PNG)  or PDF (14Mb). Please enjoy!

Marcin, Dziękuję!

PS If you would like to translate into other languages please let us know.

(How a handful of customers can make or break you…)

One of the surprising secrets of e-commerce is that a small number of customers account for a large amount of sales. In fact, on a recent sample of large sites, just 7% of the customers accounted for 50% of sales revenue. For most e-commerce sites, this means if a few hundred customers decide to return or leave, it can make a big difference to hitting sales targets. In this webinar, aimed  at e-commerce professionals, we promise you will pick up some useful tips to improve customer retention.

• How to identify and segment your top spending customers
• Learn how to save money on acquisition and grow revenue from existing customers
• Build a “Loyalty Robot” to automatically develop repeat business

Adam Dorrell (Managing Director of CustomerGauge) and Melanie Otersen (ex- SonyStyle online store, Europe) will outline how to succeed using a customer loyalty strategy, and show real-life examples with impressive  revenue growth.

Wednesday, 10 February, 2010.
Starting time:   17.00 Europe (Amsterdam, Paris), 16.00 London, 11.00 AM New York
Duration about 30 minutes. Free of charge, but limited places.

Mail for more info.

Register now!

Trends:

In 2009 there was a steady increase in Net Promoter interest. Noticeably, we saw a lot of companies reporting self-calculated Net Promoter Scores in press-releases (in so-called “self-puffers”. We reported nearly 100 companies through the year in Net Promoter News and expect to see this double in 2010. Biggest uptake seemed to be in B2B – with many business service companies measuring Net Promoter. Marketing press also mostly getting behind Net Promoter. And from Twitter, a quote we liked “Net Promoter is the Cliffs Notes of market research.” @celeduc

Earnings reports continue to feature Net Promoter Scores – top marks for Home Depot, CoinStar, Hertz. We saw commentary from stock-pickers on looking out for “high net promoter scores” – see CostCo below. Expect more of this, but tempered with critical examination of the numbers (just as investors question profit reports).

Job ads are starting to feature NPS as a Key Metric including RackSpace (for a SAN Storage Engineer: “Strive towards a world class target of 80% for the Net Promoter Score”). Seen similar  a few times,  which should widen the pool of knowledge.

Easier ways to get to NPS – new instant Net Promoter features in tools including CustomerGauge: Daily NPS report and customer feedback, Real-Time via Twitter,  and visualisations based on “Loyalty Spectrum Analysis“

A sign that Net Promoter is moving in to the mainstream: This year we saw NPS-Spam. SEO merchants are harvesting Net Promoter keywords to sell “male enhancement” products!

To look forward to in 2010: More rigorous reporting of scores – listing at least sample size and notes on methodology, and that PR people start to understand better   – see Standardising on Net Promoter Score Reporting. We trust more scores move out of the “Twilight Zone” of unknown origin. Companies reporting over 99: we are looking at you!

Finally, we leave you with an excellent informative (although rather serious)  video from Bain’s NPS guru Rob Markey. A useful 4-minute primer to start 2010 with.

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Happy New Year from the CustomerGauge team and here’s to a recommendable 2010!

Company Results

These were the scores we reported this year. Most are self reported, and perhaps have dubious value, but on a very positive note it’s good to see that business is starting to use a common metric. Rigour will come later.

Delighting your customers starts with quick response to their comments, delivered in daily reports like this one from CustomerGauge

Every e-commerce professional tracks traffic and counts orders once a day, but rarely (if ever) checks customer feedback daily, weekly, or even monthly. Let’s look at some reasons for this, and why regular customer feedback will benefit your business.

Reasons we have heard for not taking regular customer feedback included: “not standard business practice”, “it’s extra workload”, “how will it benefit?” and “just too difficult”.

Here is what every e-commerce manager needs to know about daily feedback:

1. It’s becoming the norm. World-class companies DO survey EVERY transaction for customer feedback. To mention a few: Sony, Philips, Canon, Avis, Hertz, eBay and many more. Feedback is an essential part of their daily business routine with comments distributed around the organisation. Also there IS an Industry Standard Methodology for measuring loyalty: the Net Promoter Score® - a simple, one-number approach, as understandable as page-views or profit.
   
2. It’s not extra workload. If a customer complains in a survey, you would likely have to deal with that customer issue anyway (so it’s not additional workload, just time-shifted forward). More usually an unhappy customer will silently defect and never return. Unless you ask customers, you may never know how much business you are losing.
3. It’s free consulting. Customer suggestions can help shape your business. We have seen examples where customer feedback helped merchandising give instant additional sales, and comments on manuals and packaging delivered cost-savings. In addition, positive comments can be used as testimonials on your site, which  helps reassure future customers.
4. It’s simple to implement. You can start a feedback project with a simple online survey tool and do it manually (actually, we started that way by doing monthly reports), but due to time lag we highly recommend that you automate it. Products like CustomerGauge have plug-ins for major e-commerce systems that automatically survey customers.

If you are still hesitant, here are some other points to consider:

Responding fast is impressive: When was the last time you had a response to a comment you made? You can transform customer experiences by responding quickly to feedback. Some large companies we deal with read and react to customer comments within 24 hours. That can turn the most hardened complainer into a delighted evangelist for a business.

Customer Focus: As a result of measuring, these same companies have become more customer oriented. Staff are bonused on Net Promoter Score, and welcome the feedback that customers give in order to improve service.

Give Us This Day Our Daily Feedback

Our customer feedback solution is CustomerGauge: a simple plug-in to your e-commerce site, paid monthly on subscription. All the hard work of integration and setting it up is handled by us. We arrange the emails, surveys (in different languages), automatic sending and reporting in real time. We deliver daily and weekly feedback to your staff by email. You can use positive comments and publish them on site as testimonials, which increase conversions significantly. CustomerGauge also helps keep your promises to customers: track open and closed customer issues with built-in workflow. And identify your most valuable returning customers with our real-time reporting.

In summary, Customer Feedback can become one of your essential Daily Metrics, tracked like your other Key Performance Indicators. You can receive it on a daily basis in your mailbox, and use metrics to check improvement. It is the business transformation you are looking for this year.

Join us today on our Campaign for Daily Customer Feedback and benefit from a January 2010 CustomerGauge offer: Free 30-day trial on your e-commerce website*

*Sign up by 31 Jan 2010. Terms and conditions apply, ask for details.

DIY-Massmailer MailChimp, announced their Net Promoter Score of 69 in their newsletter. They had 4000 responses to their question “Would you recommend MailChimp to a friend?”. (Source).

Continuing in the simian theme, men’s apparelster Bonobos were proud to announce their 74 NPS, by working on word-of mouth marketing. CEO Dunn is targeting 90. Source: CEO Blog and comment.

Net Promoter Ski-ore: Vail-based SkiButlers score 89 (source: VisitVail),  Whistler resort has an eye on customer satisfaction, up 6 NPS points (source: PiqueNews) .

GameStop Corporation, World’s Largest games’n'ents seller with 6200 outlets report “very high customer satisfaction metrics indicated by our record net promoter score results”. Sadly no number given, so we don’t know their High Score.  (Source: Q3 2009 Earnings Call – SeekingAlpha)

A & G Insurance Services: Managing director of Australia’s A & G Insurance, Michael Weston, says his company’s direct-to-market brand, Budget Direct, has “… a high net promoter score”. However, he chooses not to share it. Shame! (Source SMH)

Mixer-tap and bath maker Grohe optimised customer service (i.e. cut back on 25% of “unproductive” customer contact) by tracking effect of number of sales calls on Net Promoter Score according to Bain research in Harvard Business Review. NPS maxed at three visits, so not worth doing more. Results of improving customer experience by 10 % increases revenue by 7%. (Source $ Dec 01, 2009, HBR, Closing Customer Feedback Loop)

B2b News:

CoinStar NPS results from Q3 Earning Docs

Coinstar: Cash-machine corp CoinStar get to “North of 80”. Their RedBox brand pays out NPS 83. Source – Q3 2009 Earnings Call, Seeking Alpha and preso

Proving every cloud has a silver lining, 911-chaser PuroClean set up 89 new franchises, hit $90m of emergency service and score “highest customer experience in industry” with 93 NPS (source, self puffer)

Cherry-picker hirer NES Rentals get to top of the tree with all time high of 80 NPS – best of three quarters in a row. (Source: Self-puffer)

Workforce managers GMT take on Net Promoter methodology and have an initial score of 47. Kudos of GMT for publishing score and some details of how calculated (although getting your own client support organization to collect the answers might sway some of the values) (Source: Self Puffer)

Hi-Tech News

Tennessee Software Solutions (TSS), bean-counting softer (Quickbooks etc) was recognized by Sage as a Top Performer in their 2009 Customer Loyalty Project. In 2008, score 87 (average of Sage partners was 49). In 2009, TSS have hit NPS 94. (Source: Self-puffer)

Virus-stopper Symantec talking about NPS. CEO Salem: “We’ve seen improving Net Promoter Scores [...] we believe that this is a positive leading indicator for our business [...] We continue to use the Net Promoter Score feedback to deliver differentiated and improved experiences for our customers and partners” (source: SeekingAlpha) and “We established three key metrics embodied in something called a Victory Plan and then communicated this to the employees, with the indication that it would be the means to how we measure our success. These three items are the Net Promoter Score, essentially how we measure customer loyalty; market share; and employee loyalty and satisfaction.” (Source: CIO Digest). Also some details on Employee Net Promoter Score (ENPS): “The one-question survey asks ‘Overall, how likely are you to recommend Symantec to a friend or colleague as a place to work?’” Source: Symantec

Qlikview, a Biz-Intel softer with unpronounceable name quoted “QlikView achieved a Net Promoter Score (NPS) of 48, a new world record for the software industry.” Note to their PR people: If in the Guinness Book, we’d like to see details, please (source: ITWeb and self-puff)

HCL, India-based IT services company were apparently ranked by Gartner as highest pure-play IT service provider among global 211 Manufacturing Industries on Net Promoter Score”. However, we tried to track down Gartner source, but to no avail, so not verified.  (Source: Results Preso)

And finally… Point Of Reference claim 100. In the category of “too good to be true?” comes testimonial management outfit Point of Reference with a 100 Net Promoter Score. They asked “How likely is it that you would recommend Point of Reference to a friend or colleague?”. No details of how many people responded or methodology. So apparently no one gave them a score of less than 9. Likely? You decide. (Source: self-puffer)

It started when a client asked: “Could we put a desktop widget on the bosses desk, so that every time a new comment comes in it pops up?”. Actually we’d been thinking about this for a while, trying to find the right component.

Now we have a solution that’s super easy and flexible: we integrated CustomerGauge with Twitter. As soon as a customer makes a comment, an API connection to Twitter is made and a “Tweet” sent – and you get a real-time feed on your favourite device (PC, mobile phone etc). It is customisable, so you can filter on comments – examples: “Score 9 + 10 comments for call center staff” or “Detractors commenting in Manchester with ‘reception’ keyword”. The feed can be public (if you are proud of what your customers are saying) or private so it’s secure for selected subscribers. A link takes you to the full comment and customer details.

We would be happy to give you more details, by tweet (@adamdorrell) or old-fashioned phoning. Contact us for details.

Adding a new venue to DemonstratorGauge is simple. Please check first that the venue you want to add is not already on the list. Go to Settings > Add/modify Venues. Fill in details – make sure you add Postcode. Select a Retail Chain to aid reporting.

Importing

If you have a long list of venues to add (50+), we are able to “bulk upload” the data. Please ensure all fields are correctly filled in (postcode, retail chain, Venue Name). Please contact us so we can arrange it.

You can download the DemonstratorGauge Venue Import excel template: Examplevenues.

Note that you can get a list of venues using the API – demonstratorgauge-data-download

A note about adding venues

It’s important that the venue list is as clean as possible, with no duplicates to confuse demonstrators. Before adding a venue, please check whether is already stored. We can modify venues, and merge them, but we are not able to delete venues as they are used for multiple purposes.

What this API does:

SUMMARY: The objective is to provide the correct ID numbers for Demonstrators, Products and Venues in the DemonstratorGauge field marketing system. Using an HTML request, a remote call can be made to the DemonstratorGauge database to retrieve a list of:

• Demonstrators
• Products
• Venues

It is designed to be used in conjunction with the API: DemonstratorGauge Event Upload

Detail:

A correctly formed HTTP request will deliver a file in CSV format of fields from the tables containing demonstrators, products and venues.

Restrictions:

• You are restricted to 100 API calls (total) per day.
• You can only retrieve Venue data for your specified Country
• You can only retrieve Person data for your specified Agency AND country
• You need a valid API key – please request one from API@directness.net

Using the API

To get a list of venues in your country:

http://www.d1-gauge.com/canon/API/GetInfo.php?key=xxxxxxxxx&type=Venue

To get a list of products:

http://www.d1-gauge.com/canon/API/GetInfo.php?key=xxxxxxxxx&type=Product

To get a list of persons/demonstrators for your Agency Name:

http://www.d1-gauge.com/canon/API/GetInfo.php?key=xxxxxxxxx&type=Person

NB Replace xxxxxxxx with your API key.

Example Output WIth Person List (restricted to Agency Name)

Example Output with Venue List (restricted to Country)

Example Output with Product List

Example with PHP

<?

// DemonstatorGauge Data Download 4 December 2009 - v0.1

url = "http://www.d1-gauge.com/canon/API/GetInfo.php?key=xxxxxxxxx&type=Product";

// replace xxxxxxxxx with your API key

// type=Product

// type=Venue

// type=Person

$ch = curl_init();

curl_setopt($ch, CURLOPT_URL, $url);

curl_setopt($ch, CURLOPT_BINARYTRANSFER, 1);

curl_setopt($ch, CURLOPT_RETURNTRANSFER, 1);

curl_setopt($ch, CURLOPT_SSL_VERIFYHOST, 0);

curl_setopt($ch, CURLOPT_SSL_VERIFYPEER, 0);

$result = curl_exec($ch);

curl_close($ch);

print $result;

?>

Validation

A CSV (Comma Separated Variable) file can be downloaded.

Error messages:

API Key expired - please ask for a new key
API key not valid - please request key with your API 
Support

Please send comments to API@directness.net