Net Promoter News: Whistler ski-jumps on NPS buzz, BMO links Rev/NPS increase, AppDynamics’ dynamite growth, Employee engagement key to +NPS
Whistler leaves rivals flailing in the powder
In good news for Canadian tourism, a UK Net Promoter survey of 18,000 British skiers has found that Canadian resort Whistler is preferred over any other resort in the world, and fellow Canadian resort Banff is second most preferred.
The research was conducted by a UK company (Spike Marketing) but as Net Promoter junkies we noticed with interest Tourism Whistler’s VP of marketing strategy Louise Walker mention that Whistler monitors Net Promoter from its own end as well.
Walker also noted that in the era of social media, Whistler gains enormous buzz from Promoters as they share their unsolicited love for the resort across social networks. “Word of mouth is one of the biggest promotional tools that we now have and with Facebook and people on social media, it is absolutely essential that we have a good net promoter score,” she told The Whistler Question [Ed: excellent name for newspaper!]
This is the second time in as many months we have reported on Whistler’s NPS – last month, Whistler Blackcomb was named best resort in Canada in terms of satisfaction, customer loyalty and commitment to promoting and growing skiing and snowboarding by the Canadian Ski Council (CSC), with the resort also achieving the highest NPS in Canada for the season.
A spokesperson nominated top class skiing, a wide range of activities off the mountain, wonderful customer service and hospitality, and of course, consistently outstanding snow as its points of differentiation compared to other resorts.
Forget Megève, next year we’re off to Whistler! The Whistler Question
BMO increases net income and Net Promoter Score
In more news from Canada, The Bank of Montreal (BMO) has briefly mentioned Net Promoter in its earning call, claiming that customer loyalty, as measured by Net Promoter, “continues to improve in both its personal and commercial businesses.” No details were given on scores or sample sizes, though BMO has mentioned its NPS in earnings calls on several occasions before. The claim has a correlation with the bank’s strong quarterly results, in which it increased net income by 37% year on year. Seeking Alpha
AppDynamics’ dynamite growth backed by +76 NPS
In May we reported on AppDynamics’ binary perspective on customer satisfaction. The app management biz frames customer satisfaction only in terms of “good” or “bad” and claimed it had reached an amazing satisfaction level of 99% among its customers. This was backed up by an NPS of +73 and correlated with an equally impressive 400% increase in growth in 2011.
Not content to rest on its laurels, in a recent self-puffer AppDynamics claims its NPS has increased to +76 on its latest customer NPS survey, and it grew 270% in the first half of 2012. With figures like these, we’re certainly curious to know if the company has improved on its 99% customer satisfaction level! Sacramento Bee
Employee engagement – jet fuel for NPS
JetBlue, Charles Schwab, Belgacom, and Cintas are some well-known organisations that have been and in some cases continue to be at the leading edge of Net Promoter best practices. According to Bain & Co partner Domenico Azzarello, one thing these organisations share is an emphasis on developing employees who are brand advocates passionate about delivering a superior experience for their customers.
Azzarello nominates a number of ways organisations can nurture similarly strong advocacy among employees, including measuring employee engagement just like customer engagement and linking the two, putting employees squarely at the center of customer feedback loops, and giving employees freedom within a framework to improve the customer experience. EPM Channel
Brain training franchiser LearningRX has presented its Net Promoter-based 2012 customer service award to The Woodlands LearningRx. Woodlands Online
Net Promoter meetups:
- Australia: Genroe host ACGUG on 26 September, Sydney
- Netherlands: CustomerGauge Event, 16 October, Amsterdam
- Associate Net Promoter Score (NPS) Specialist: Life Technologies, Grand Island, New York.
- GM of NPS: Brooklyn Group, Melbourne.
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|
|Marks & Spencer||-10|
|Source: Grocer/Satmetrix Mar 2012||The Grocer|
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
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
Net Promoter News: Bank Montreal 44, HomeDep nail 64, eBay go 0-10, Gas burns 30, SmartPen writes 54
Bank of Montreal Group report Net Promoter Score of 44
From the BMO Financial Group F4Q09 (Qtr End 10/31/09) Earnings Call Transcript. Bill Downe – President & CEO: “[we] improved our net promoter scores for both retail and commercial in 2009.” He drilled down to P&C Division U.S, emphasising strong fourth quarter results and added: “Our retail net promoter score was 44 for 2009, compared with 42 in 2008, while the average scores of our large bank competitors declined.” Source: SeekingAlpha and TradingMarkets.com
Other financial snippet: The managing director of A & G Insurance Services Australia, Michael Weston, boasts his company’s direct-to-market brand, Budget Direct, has a high net promoter score (but is only teasing us by not revealing it…) Sydney Morning Herald.
Weaponising NPS at Easynet for an Industry to become “responsible”
UK ISP Easynet Connect are calling for a common benchmark for measuring customer service for business ISPs: “We’ve been using the Net Promoter Score internally for a few years now. Since adopting it our score, and therefore the customer service that we actually deliver, has improved significantly in just a few years. It is a powerful tool that keeps you on your toes,” said Harry Eastman, Operations Director, Easynet Connect “Crucially for us, we use the NPS to zone in on problem areas. If our CRM is the big gun in our arsenal, then NPS is without doubt our targeting system for that gun.”
Julian Harriott, Business Manager, Communications Management Association (CMA) says “… Adopting a standard like Net Promoter Score is the responsible thing [for the industry] to do…” Sourcewire.
Home Depot toughs it out.
It was a tough 12 months for the DIY shedsters. But they took comfort from increased customer loyalty. Frank Blake – Chairman and CEO: “On the store operations side, our net promoter score, [...] with 64.1% in October, over 8.5 percentage points higher than last year at this time.” From the Home Depot, Inc.Q3 2009 Earnings Call Transcript on SeekingAlpha and slides.
eBay “just testing” the zero to ten scale
“This is a just a test…” say eBay UK, who have started to trial Net Promoter Score feedback for buyers (Source: Tamebay). Sure it is. eBay have been using the Net Promoter Score internally for a while. This from the recent eBay Q3 2009 Earnings Call Transcript: “Our net promoter scores are up for both buyers and sellers.” says CEO John J. Donahoe. “….our focus on great customer experiences and customer retention and loyalty is as strong or stronger today than in any time in the last couple of years. [...] I changed the senior management incentives so the top 600 people in the company, part of their annual bonus is driven by improvements in essence in customer loyalty, as measured by net promoter scores. So we made good progress.”
British Gas Mark 30
Sensible tips from British Gas, winners of the European Call Centre of the Year award.
Tip 4: Use Net Promoter scores – Show scores on your wall boards. “We adopted the Net Promoter score as our key measure of customer satisfaction. Our agents are bonused on a combination of their Net Promoter score and the percentage of their customers that fill in a telephone-based post-call satisfaction survey. A bonus is payable based on the score and if 25% of their customers complete the survey. Progress has been significant and has gone from -20 to +30 in the past 18 months.”
Source: Call Centre Helper
DragonAge NPS (as recommended by Dark, Heroic Fantasy World Gamers)
Founder/CEO of Canadian developer Dragon Age: Origins BioWare, Dr. Ray Muzyka spoke about KPIs for game developers: “Net Promoter scores, which is more of a fan opinion they recommend to their friends, that’s a useful metric.” Source: VideoGamer.com
Strong loyalty with “Life Changing” Pen
Livescribe’s senior marketing director and UK GM, Eric Petitt was interviewed about the no-computer-needed SmartPen. Read more on PCR
In a recent US national survey of 5801 registered Pulse smartpen users, 74.5 per cent said they were very likely to continue using it, 92 per cent have demoed the pen to a friend, while 73 per cent said “Pulse has changed my life”. We also got a 54.2 net promoter score (recommenders minus detractors) – this puts us in an elite group of brands, alongside Apple and Southwest Airlines.
Buy on NPS!
One of the original ideas behind Net Promoter Score was that companies with a high Net Promoter Score should provide better investment opportunities. In the appendices to The Ultimate Question Fred Reichheld shows graphs with NPS and growth correlated. So it’s nice to see the market catching up with this thinking. I saw this headline: “Companies You Should Buy Right Now” from MarketMixup, with the sure-fire stock picking strategy of “So if you want to make serious money in stocks, start with great companies. [...] Costco (Nasdaq: COST), for example, has a high net promoter score“. I’m looking forward to the first NPS Portfolio I can invest in…
Career Tip: From IT manager to CEO via NPS.
How a senior IT executive can move beyond a traditional role in technology (i.e. become a CEO) is discussed in What it takes to become ‘the extended CIO’, a book from Richard Hunter and George Westerman. An excerpt:
Since 2006, Leonardson [Butch Leonardson is CIO of Boeing Employees Credit Union (BECU)] has cochaired a BECU customer and employee loyalty initiative called Net Promoter. [..] “When a BECU employee logs on in the morning, if he’s [customer-facing] staff, he sees our four strategic objectives—the target and where we are,” Leonardson explains. “With Net Promoter we’re supposed to be at 73.5 percent right now, and we’re at 74.6 percent.” [...] Leonardson continues to seek improvements in the company’s ability to use data to improve performance for customer service. … “
From CIO Canada (24 Nov 2009) IT World Canada
Our occasional feature showcasing links to NPS-deniers. This week, Flat-Earther Augustine Fou gamely argues the view “What’s wrong with the Net Promoter Score”. Plenty of (well-informed) pro-NPS heckling follows in the comments, with even the author repenting: “… I will definitely grant that some clients may be able to use NPS, given a deep understanding of what it can and cannot do.”
*Researchism: A new term that I just made up referring to the quasi-religious beliefs of some market research professionals that the Net Promoter Score is pure Evil, and that a proprietary scoring system derived from 40-question questionnaire is better than any other surveying system. A form of business creationism, probably done to protect a revenue stream rather than helping clients.