Net Promoter News: A Nation of Shopkeepers say “Meh” to Points Cards but #1′s Waitrose, Accuray enters loyalty zone, Earnings ‘n’ NPS from Aviva, Hertz, Overstock, Bank Montreal plus Doxim’s self-promo fails advocacy test
British shoppers think loyalty cards are past “Best Before” date
What drives loyalty among shoppers? This week a Net Promoter survey across 1,200 British shoppers was released – with some eye-opening results.
While you may think cost-effectiveness was a sure way to driving loyalty, the brand with the most loyal customers was premium supermarket chain Waitrose. [Check out our previous Waitrose coverage]
Based on that, it might be reasonable to assume that customer service and quality were the main drivers of loyalty. Well, sort of. In fact, the biggest driver of loyalty was “Good price for good quality,” followed by “Customer service; product quality.” But that doesn’t mean cheap prices aren’t important – discount supermarket Aldi was second on the ladder, not far behind Waitrose.
But perhaps the biggest surprise of the survey surrounded loyalty cards. Despite the name, they don’t seem to be effective. Loyalty card pioneer The Co-operative Group, has the least loyal customers, and Tesco, which operates the mammoth-sized Clubcard scheme, has the third least. By contrast, Waitrose has only recently launched a loyalty card initiative.
These were the key findings, but also intriguing for us Net Promoter junkies are a few observations on the supermarket chains’ Net Promoter scores against their overall business performance. Not only did Waitrose and Aldi record the best and second best scores respectively, they have been among the two fastest-growing grocery retail chains in recent years. The Co-op, which scored -14, sacked hundreds of head office employees just last week. And Tesco, which scored -8, recently gave its first profit warning in 20 years.
Of course, Net Promoter Scores and business performance are not always in sync. But we believe there is more than a little truth in an independent 2005 study by the London School of Economics which was quoted in the article. The study found that Net Promoter “may be useful not only in predicting sales growth but, also predicting share performance and employee productivity”.
If that’s the case, I think I just felt Tesco shudder. Those scores in full:
| Store | Net Promoter Score |
| Waitrose | 46 |
| Aldi | 42 |
| Asda | 21 |
| Sainsbury’s | 16 |
| Lidl | 14 |
| Morrisons | 2 |
| Ocado | -4 |
| Tesco | -8 |
| Marks & Spencer | -10 |
| Co-op | -14 |
| Source: Grocer/Satmetrix Mar 2012 | The Grocer |
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Big Data Analytics and the role of Net Promoter
The rise of big data has been the subject of much discussion over the last few years, as businesses try to capture, analyze, and capitalize from it.
Bernard Marr, author of a book on the topic called “The Intelligent Company” suggested in a post this week that while traditional KPIs will remain vital tools to chart business strategy, they will increasingly be supported by analysis of “big data” – such as unstructured conversations across social media networks or search engine keywords.
He suggests that increasingly, companies may utilize tested metrics such as Net Promoter to assess advocacy and loyalty among a group of customers, but supplement this with big data analysis, such as social media analysis of the conversations around the product or brand on platforms such as Facebook and Twitter.
We have long been firm advocates of a customer-centric approach to business, and therefore what we like about this approach is that it sensibly places your relationship with your customers at the centre of your strategy. Despite the changes brought about by big data, sometimes the fastest route to nurturing delighted customers is by asking them one simple question: “How likely is it that you would recommend our company to a friend or colleague?” Smart Data Collective [Editors note: Bernard Marr has "75 measures every manager needs to know" but Adam Dorrell of CustomerGauge bests him by two in "77 Essential Metrics"]
Does a social media presence affect your Net Promoter Score?
The past few years have seen an enormous amount of noise (and some informative discussion) around the rise of social media, but what happens when a marketing-leading brand puts little or no effort into creating a corporate social media presence?
Conventional wisdom might tell you that the brand in question is missing out on an enormous opportunity. However, a post this week argues that beyond the hype, social media is just one medium through which customers interact with a brand. And if customers are consistently being delighted by that brand every time they interact with it, they will in turn advocate it to people around them – their friends, families, and social media communities.
According to the post author, automotive general manager Peter Anthony, the key takeaway is that corporate social media initiatives are not always necessary to achieving a high Net Promoter Score. (Note: While he cites Costco as an example to support his argument, we did find a Costco page on Facebook with nearly half a million fans, so we aren’t sure that the brand does not have a clear social media strategy.)
At any rate, we agree with the point, but we’d like to add a significant caveat. There may be a select few large, highly-advocated brands with enough positive momentum to rely on positive word-of-mouth buzz across social media channels to help generate advocacy. However, if you do not have a corporate presence on social media, that is one less channel you have to delight your customers and nurture new advocates.
In short, although for many brands there are risks associated with being on social media, the argument of whether to be in the space or not has already largely passed most of us by. The question for most companies now isn’t whether a social media affects your Net Promoter Score. Instead, it’s this: How can I nurture new advocates across my social media platforms? Peter Anthony’s blog
Accuray enters the loyalty zone
It’s another week, another NPS-based award for customer satisfaction as radiation oncology company Accuray Incorporated became the first company to receive Omega’s NorthFace ScoreBoard Award(SM) for excellence in customer satisfaction and Net Promoter Score.
This award system works on the Net Promoter Score’s basic principles. To be eligible, customers are surveyed a minimum of four times in the preceding year. However, rather than simply relying on the tried and tested NPS scale of zero to 10, Omega spins a little magic with the metric and converts it to a 5 point scale. Companies must achieve a score of 4.0 or above from their customers to receive the NFSB Award.
While we are not a fan of the mechanism or reasons for converting NPS to another scale, the basic principles of the award methodology seem sound, and we particularly like the fact that customers are surveyed four times in the preceding year. According to Omega, companies that average over 4.0 in their scale are in the so-called “Loyalty Zone,” and this ensures that they are “locking in profitable, long-term customer relationships.” But hey hey Accuray, what’s wrong with just sticking to the 0 – 10 scale? The Sacramento Bee
Doxim’s self-promotion fails the advocacy test
Last week we took a look at an announcement by virtual data room company V-Rooms that it had achieved an “A+” Net Promoter Score. While we weren’t sure exactly what that was, we were very enthusiastic about the tangible, clear steps the company is taking to further improve on its customer service.
This week, cloud-based enterprise content management firm Doxim has announced its “record Net Promoter Score” of 63 – an admirable figure, but a puffy piece of self-promotion that still leaves us feeling like we’ve just watched a nil-all draw.
Where V-Rooms focuses on the future and getting even better, Doxim discusses the past and how they compared to now. While V-Rooms drew a clear line of differentiation between their competitors, which are cutting down on customer service costs, Doxim compares its scores to global companies such as Sony, Google, Amazon and Apple – none of which are direct competitors and for which comparison is mildly interesting at best.
To wrap it up: Kudos on your score, Doxim. But what’s next? PR Web
Finance and NPS – A round up of recent company filings that mention Net Promoter.
Aviva PLC 2011 – reporting in London, Andrew Moss, Group Chief Executive Aviva said: “Last year more of our customers were willing to recommend us than ever before. We improved our customer satisfaction measure, Net Promoter Score(TM), last year and now more than half of our businesses operate in the upper quartile relative to local competition”. And in the UK: “Customer satisfaction levels and employee engagement have increased, with customer complaints down 20% in 2011. We’ve been changing the way we look after our customers by simplifying our processes and making them more customer-friendly. In our existing annuity business this has delivered a 26 point improvement in our Transactional Net Promoter Score(TM), achieved significant cost savings and helped reduce call volumes by around 20%.” Marketwatch
By the way, found on the web, really nice Net Promoter story from Andrew Moss, at Henley Business School June 2011. “…And when we look at our customer metrics, it’s an amazing thing but, here in the UK, our best net promoter score, which is how we measure customer satisfaction, is in our Death Claims Unit in York. So, how we deal with people in that very difficult situation, it’s amazing how people appreciate it if you really do deal with them like a human being” Aviva
Hertz Q4 2011 “In 2011, worldwide rental car’s net promoter score was up 6.4% year-over-year…” SeekingAlpha and Q4 2011 Conference Call Slides
Telecom Italia Adopt NPS (from Q4 2011 Earnings) “Move to our goals for the Mobile business… progressively shift customer care to self caring and adopt net promoter scoring across our organization to gauge customer preferences….” Seeking Alpha
Metro PCS (Q4 2011 Earnings call). Interesting as it’s in an answer to an analyst – shows that the COO understands NPS: Thomas C. Keys: “That’s a great question, Michael. The first thing is you’re asking me to give up a little bit of the secret sauce, so I’ll be happy to do that. [...] That works on the viral nature of how we advertise, at how we move a product, keeps our CPGA lower. It keeps our net promoter score higher…. ” SeekingAlpha
Bank Montreal Q1 2012 “This business continues to perform well with volumes higher across most products, and we continue to innovate in the execution of our strategy, achieving higher net promoter scores and increasing share of wallet” SeekingAlpha
Overstock Q4 2011. Report Net Promoter of 52 (see graph) “Customer, net promoter score has, slide 20, has still remained sort of astronomically high compared to retail in general. I just saw another scoring service came out and it put us right at the very top, we scored an 83, well, on another scoring service.” Seeking Alpha. and Slides
H&R Block (Q3 2012) “Additionally, our retention and Net Promoter Scores are up 150 and 400 basis points, respectively, demonstrating sustained improvement in 2 of our most important metrics.” Seeking Alpha, and Slides
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Net Promoter News: Marketers, Metro Bank ‘get it’ but Barclays don’t, plus Smartphones, Ireland and Clockwork Home
In what is a kind of Net Promoter ‘Love-fest’, the UK’s Marketing Week devotes many column inches in their latest issue to NPS. In “How to get more from your score” they explain how “adding extra layers to the Net Promoter score technique of assessing levels of customer satisfaction is enabling marketers to take their insight into the boardroom.” They add “…there is no doubt NPS has proved useful for marketers. Mark Blayney Stuart, head of research at the Chartered Institute of Marketing (CIM), believes the use of NPS continues to increase because the system is so straightforward and easy to use.” Article name checks companies: Hays Recruitment, Standard Life, Aviva, Carole Nash and Philips.
And continuing in the same issue Mark Ritson writes “Why I would recommend NPS to my friends” with some well thought out reasons and solid metrics: “Lego revealed that it was aiming for 5 million club members by 2015 and a net promoter score (NPS) of 75%…. the head of Citigroup’s consumer banking division had some good news for his team. After two years of crisis and more than £20bn in losses, the bank’s NPS had risen to 54%. That was 9% higher than a year earlier, and the first time the bank had risen above the 50th percentile since the data was first collected.” He also adds “Against the recommendations of professors and jealous research agencies (that despair of any metric simple enough for clients to use without their assistance) thousands of marketers have become advocates of NPS.”
iPhone tops NPS poll, no one surprised.
Zokem, an Espoo, Finland-based marketing company used standardized net promoter score (NPS) survey to analyze user loyalty of over 6,000 U.S. consumers in 2010 and found that the iPhone scored a 73 percent rating, while Android handsets took second-place with a 40 percent score. Research in Motion’s BlackBerry line earned 30 percent, Nokia’s Symbian was 24 percent, while Palm and older Windows Mobile phones pulled just 10 percent each. Interestingly, Zokem said Android users were actually the most likely to buy an Android phone again, at 89 percent, while iPhone owners get another iPhone 85 percent of the time. To explain how the statistics relate to the large gap in scores they point out Android powers a number of models and carriers, and consumers have more opportunity to choose and jump from one Android handset to another.
BlackBerry users stick with the platform 61 percent of the time, but only 28 percent of Palm owners and 8 percent of Symbian users plan to stay the course. Full source here.
When Irish “1″s are smiling…
Dublin based metricists W5 recently freely published useful Net Promoter benchmarks in Ireland. High street and grocery stores achieved the best scores, with health insurance and broadband providers achieving the worst. Download as a PDF here.
Company News
Metro Bank: Committed to NPS. Now this is newsworthy – a bank focused on customers using NPS. Anthony Thomson, co-founder and chairman of Metro Bank — first new high street bank to be opened in the UK for 150 years - talks about being a retailer not a bank, nixing staff sales commission and using Net Promoter as a business metric. “None of our customer facing staff have sales targets or sales bonuses — their rewards and bonuses are based purely on their customer satisfaction scores. We use Net Promoter and currently we have a Net Promoter score of 87% which I believe is among the highest anywhere in the UK — and eight out of 10 of our new customers come as recommendations from existing customers — 97% of our customers rate our service as being exceptional.” Read more…
According to self-puffer, NES Rentals Holdings, Inc. has set a “new Net Promoter Score record for the aerial equipment rental industry” with a 2010 annual score of 80.1. The lifting company achieved consistently high quarterly scores in the NPS process throughout 2010, including a quarterly high of 82.6 in the fourth quarter, derived from results of thousands of customer interviews and ratings throughout 2010. The company implemented the NPS program in 2007 and has received growing Net Promoter Scores each year since. “Achieving high customer loyalty scores in the midst of tremendous economic pressure in our industry is a testament to our team and their dedication to our customers,” stated Andrew P. Studdert, NES Rentals chairman and chief executive officer. “By making the customer experience our priority, it has led to a natural emphasis on customer safety and service, an emphasis that sets us apart from our competition and gives us the highest customer loyalty scores in our industry.” Source.
Sage keep “A deep customer focus” according to an opinion article covering their annual analyst event. Unusually for Sage, who have given NPS scores out before, it seems there was some reticence to give details. Could be that some rather sharp comments on the blog might be a more accurate representation of current customer sentiment. Judge for yourself on ZDNet.
Clockwork Home Services, a home repair conglom from Sarasota (owned by Toronto-based Direct Energy, the North American subsidiary of publicly traded Centrica) talk about Net Promoter in the Gulf Coast Business Review. Company head Scott Boose has implementedNet Promoter for all three service brands after learning the NPS ropes at British Gas. “A key component to the success was to be absolute on one rule from the first day: Well-dressed, polished and professional technicians were the only employees allowed to arrive at a customer’s home.” Key takeaway for Scott: Educating customers couldn’t be an afterthought in the home services sector. “If all we had done was fix the customer’s appliance,” says Boose, “but we hadn’t fixed the customer, then we’d be back.” Source.
The boss of Clayton Homes of Abilene, Texas describes the important the customer treatment to the company. Clayton Homes keeps track of each office’s Net Promoter Score, and earlier this month the Abilene office stood at 86 percent. To Buddy Parish they represent people customers can contact for testimonials about Clayton Homes. Those who answer with a 9 or 10 are promoters who will keep buying or referring friends. Nice homespun small-co reference: Source.
PPC-tweaker Covario held their annual INFLECTIONPoint Conference in downtown San Diego, CA last week, basing the conference theme on the movie Top Gun (Hey Covario, the 80′s called and want their uniforms back!). Oh and they announced that their Net Promoter Score, had shown an increase of 20 points. From where, to where, we sadly are not told.
TD Ameritrade announce jump in NPS. At an event so star studded that when Tony Blair had to cry-off (citing some minor middle east peace issue), Colin Powell stepped in at the last minute (what do the finance sector have on these people?), and it was announced that the company’s net promoter scores had ‘zoomed’ from 49 to 75. The jumps apparently reflect the fact that the company has ironed out technology glitches that cropped up when Ameritrade and TD Waterhouse worked to integrate systems and service after their merger in 2006. More conference details here.
Dell’s 66 second NPS soundbite: Adam Brown, Director of Social Media at Dell, explains why Net Promoter Score (NPS) matters so much to the computer-maker. Relevant snippet: At Dell, the NPS score is shown top right hand side of intranet screen, right under stock tracker. (Surely only a cynic would say that’s Dell’s relative positioning of NPS vs stock price?) YouTube.
Vodafone’s Turkish Delight: Vodafone Turkey on Thursday said its service incomes in Q3 in 2010 went up 31.7 percent over the same period a year earlier, becoming the fastest growing operator within Vodafone Europe, also adding that its net promoter score was 18 higher than that of its closest competitor. Source TurkishPress
Back-officers Blue Frog Solutions self-puffed about record high client loyalty and satisfaction levels “as ranked through a national scoring system”. “Blue Frog surveys its distributor and carrier clients semi-annually using Net-Promoter Score (NPS)… ” said SVP Joe Breakey, “Survey results … help assess the performance of our employees.” (translation: we bonus our staff on NPS). BlueFrog claim industry leading survey 72% response rate and say Net Promoter Score climbed to an all time high in December and “scored higher than nationally well known organizations such as EBay, Costco, State Farm, Geico, and Cigna.” Source.
Amcor, Australian based ore-botherers talk about NPS and the amalgamation of Alcan. “All the while the discipline of the so-called “Amcor way” will be drummed in – the key elements are safety, customer focus, talent, capital discipline and low costs, each with its own key performance indicators, programs and deliverable targets.” Customer focus, by way of example, is delivered by making clients happy through innovation and profitable sales growth, which comes from a range of programs including environmental action, and is measured by Net Promoter Score, among other tests. Australian.
BallenIsles birdies NPS, crowned Country Club Facility of the Year. Interesting to see that Net Promoter has been adopted by the golf set. Troon Golf, the world’s largest golf management company, with operations at properties located in 30 states and 23 countries honored BallenIsles Country Club, as it nearly tripled its NPS ranking, used to evaluate loyalty and the Club’s relationships scores. Source.
Bloomingdales hire for NPS: Spotted in the SitVac ads, retailer Bloomingdales specify Net Promoter Score Experience in job ads: “…analyze our performance in the Net Promoter Score (NPS) customer engagement survey” Manager, Customer Service and “Achieve store Net Promoter Score goal.” Distribution/Logistics Manager
And the NPS Razzie goes to… Barclays.
As a bookend to the Metro Bank story, read another Mark Ritson piece in MarketingWeek, about how tone deaf Barclays manage to be. “After more than 90 minutes of bonus-based questioning, committee member George Mudie MP changed tack and [...] then referred to Barclays’ all-important net promoter score, widely acknowledged as a key metric of banking performance, which currently sits at the astonishingly low -35. Mudie asked whether Barclays’ ability to generate huge profits while treating its customers so badly provided clear evidence of a lack of competition in the British banking sector. He looked across at [Bob] Diamond and waited for a response. But Diamond, sensing that this was a question about customers, took a long drink from his cup of water and handed the floor over to Anthony Jenkins, his head of retail banking.” (This also tallied with surveys completed by Millward Brown and Geronimo that both rated Barclays as the worst performing bank in their respective net promoter research studies). Ritson closes with “perhaps no-one at Barclays actually cares about what their customers really think. In the weeks ahead the furore around £1m bonuses during Britain’s worst period of austerity in living memory might encourage the leadership team at Barclays to take a more customer-centric view. MW.
