Thoughts on how cultural differences impact Net Promoter® Score
Yesterday we had three webchat enquiries within an hour from different countries relating to exactly the same topic. This one is typical: “I’m searching for information if there are cultural effects that impacts the NPS. I’m specially interested in if Dutch customers are “harder” to receive a high NPS score from then the rest of Europe”. It’s not normal to hear such a specific pattern of questioning like this, and at first we thought it might be some kind of sophisticated botnet attack attacking customer loyalty firms. But when we spoke to one of the questioner it was clear it was genuine, apparently triggered by one of the company’s Big Client survey results just coming back. And you guessed it, a low score from the Low Countries.
I was asked, in a conspiratorial way “Is there something like a “Dutch Effect” on scores?”
“…for now, the net promoter score is the best measure available for determining client delight”
A couple of relevant articles caught our eyes this week.
Steve Denning in the Forbes article “Measuring Business’s New Bottom Line: Customer Delight” neatly summarises the Net Promoter® Score methodology. “To measure customer delight at the organizational level, the best place to start is the work of Fred Reichheld. [...] Initially he had trouble getting firms to take loyalty seriously or to do anything about measuring or tracking it [...] So he set out to create an instrument so simple that people could easily understand how it tracked the quality of their client relationships“. In a balanced way, Denning describes the growth of Net Promoter, and closes with “Reichheld himself is careful not to overstate the reliability or validity of the method. It’s not intended as a tool for academic study, he notes, and it doesn’t work in some settings [...] Nevertheless, it is practical and intuitive, and, most important, it drives rapid learning and action across the organization [...] for now, the net promoter score is the best measure available for determining client delight.“
On the VentureBeat Entrpreneur column, Clate Mask (of Conquer the Chaos fame) counts up 3 ways to avoid costly customers. News-At-Ten-headlines: 1. Get totally clear on who the target customer is, 2. Put metrics in place to measure the cost of a customer. 3. Re-negotiate with or terminate costly customers. Back up to bullet 2) and he suggests: “A few key metrics can help you steer clear of this trap. These will vary, depending on the type of business you run, but a few common examples are cost of goods sold, lifetime customer value and net promoter score.”
Social Media: Netpop Research publish Net Promoter Scores for social network sites in US, and find that YouTube users are more likely to recommend than FaceBook and Twitter. Scores include YouTube 50, Facebook 36, Groupon 33, LinkedIn 30, Craigslist 29 with Twitter at 11. Source: MarketingProfs
Canada’s BMO Financial Group shout out their NPS and Profit in their Q1 results: “We continue to focus on the customer experience, as reflected in our high loyalty scores. Our retail net promoter score was 41 for the first quarter of 2011 and 40 in the prior quarter, and remains very strong compared to the scores of our major competitors.”. Profits up too: Net Income Increased 18% to $776 Million. Source
Military’s own USAA topped NPS tables for third year, coming first in consumer banking, personal auto insurance and homeowners/renters insurance categories in Satmetrix 2011 Net Promoter Benchmark Study. Texas based USAA led in all three industry sectors by squarebashing Net Promoter Scores of 87 in consumer banking; 78 in homeowners/renters insurance; and 73 in auto insurance.From San Antonio Business Journal. [Net Promoter insiders should check out the USAA testimonial page, which is beautifully executed and kept up to date with new tributes daily.]
Card-Not-Present e-commerce processers Litle and Co win 2011 Stevie Award for Litle Vault. PR reads “The company’s customer-obsessed culture is committed to Voice of the Customer initiatives, including Net Promoter Score (NPS)” More.
Staffing Specialists: In a slew of self-puffers covering Net Promoter scoring in Inavero’s 2011 Best of Staffing/CareerBuilder one stood out with a number. Hudson, who “secured their place on the winner list by obtaining at least a 55% Net Promoter Score for extraordinarily high levels of client satisfaction. This score is nearly double the national staffing industry’s Net Promoter Score benchmark…” Source.
Gaming: British bingo-to-roulette gamblingistas Rank Group touted financials for 2010 showing increase in revenues to £567.8m, and mentioned NPS in refreshinghly honest way. “Revenue accelerated strongly and operating margin expanded [...] Net promoter score declined significantly, principally as a result of customer dissatisfaction with our online casino and sportsbetting sites.” Not clear if they are fixing the NPS score, or if mug punters do not recommend losing money to friends or family. iGaming
International: Genroe and Directness announce partnership to bring continuous Net Promoter Score measuring system CustomerGauge to Australia, calling out early success with insurer iSelect. More
Small Business: We like to see heartwarming stories from smaller companies having success with Net Promoter. This from Lawn and Landscape News , and covers Brad Johnson, owner of LawnAmerica in Tulsa, Okla., talking about on how companies can measure their customer satisfaction. “True growth in any industry is hard to find,” Johnson said. “We’re geared for not just pleasing customers, but exceeding their expectations. They’ll talk about us if we’re really, really bad or really, really good. … That determines your future growth: how happy your customers are. I’m a numbers guy. I like to see data. The Net Promoter Score is a number I can look at, and I can be confident of how we’re doing on customer service.”
From a Net Promoter perspective Johnson does the right thing: incentivizing his entire company on the NPS results; depending on their position, managers can receive as much as $3,500 more at the end of the year if they exceed their goals. Technicians and office staff earn bonuses based on the performance of the company as a whole. “We post all of our data. There’s some peer pressure, because it’s very visible,” he said, and added “It seems to be working: In 2010, retention went up, turnover went down and employees’ attitudes were better”.
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.
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.
Net Promoter News: Centrica +3, 10Ks from eBay, Nokia, HomeDepot – plus FaceBook stuff, Sony NPS-Man, Kamp skore
Net Promoter News 3 June 2010
Centrica supply Net Promoter Dashboard
Centrica (the Company Formerly Known as British Gas) come with plenty of customer experience baggage. To their great credit, they are reporting their Net Promoter progress by publishing on their site a chart and downloadable numbers. They also list goals: “British Gas’ NPS at the end of 2009 was -2, placing us equal first in the league table of major UK energy providers with three other suppliers. Our target for 2010 will be to increase this score to +3.” An example of transparency that we look forward to seeing more of. Source
Zuckerberg: Privacy down, NPS up!
Facebook’s privacy controls have been heavily criticized recently, but CEO Mark Zuckerberg is confident users care less about sharing data, more about possible subscription fees. And he knows this because he tracks what he calls “a special metric”, which most others call Net Promoter Score. “We’ve seen no meaningful change on the stats on any of that stuff,” which is how he refers to people quitting the ‘Book.
“Whenever we make a change, the net promoter score always goes down. But it will usually recover to a higher place than it was at before,” he continued. “So when we started rolling out these changes after f8, our net promoter score went down. And we thought it was because of the privacy issues. But what we found was that it actually went down because we made changes to our news feed…” Interesting reveal there – we would dearly like to see some more stats on how they are surveying people. And whether they gave permission. Maybe its not just hubris though, as yesterdays “Quit Facebook Day” apparently was a flop, and did not result in a significant amount of “that stuff”. VentureBeat and Forbes
At a recent conference, Sony Canada opened up about their Net Promoter journey. Excellent tips from Wayne Ground, CIO of the Canadian division, explaining how it was not initially driven by executives, but after getting daily reports, the president was quickly on board. Customers are invited to complete online surveys on call center interactions, website visits and retail store visits. They have sent more than 100,000 surveys with a response rate of 23%.
All detractors gets a follow-up contact from customer support. Promoters also receive a follow-up — a coupon for future Sony Canada purchases. The promoters who receive coupons tend to use them, and sales transactions with those customers are 40% higher than the average purchase.
Additionally, the company started to capture email addresses at the in-store locations. Once in-store managers and sales reps realized they were being evaluated, they caught on to the program pretty quickly, Ground said. The follow-up contacts have really made a difference: “When we phone back the day after they send in a survey, customers are blown away,” Ground said. “They can’t believe someone actually read it.” Source: – SearchCRM.com
Sage grows Net Promoter
Sue Swenson – CEO of Sage North America opened Sage Insights ’10, and revealed how it is “Maximizing existing assets“. Sage has climbed 10 points in its Net Promoter score, which quantifies customers’ “willingness to recommend to others.” It’s also boosted renewal rates from 90 percent up to 97 percent. Customer value comes from not just product functionality, EVP marketer Palsule said, it comes from how easy Sage is to do business with. Source DestinationCRM
Phones 4U Pay on NPS. Probably.
Mobile News reports on the fiendishly complex compensation scheme from High Street SIMmery Phones 4U. The scheme has so many “ifs” and “buts” it takes four paragraphs to summarise. NPS excerpt: “Phones 4U sales consultants will now have their full commission entitlement paid out if the store hits a Net Promoter Score of 37.5. Previously, stores had to achieve a score of 35 for consultants to receive full commission.” Mobile News
Temkin on Take-Up.
Bruce Temkin of Temkin Group blogs about how executives are using NPS: 400 people took their recent survey. Key numbers: 43% are using Net Promoter Score (NPS), and 65% of those people think that it has had a positive impact on their company. Temkin
Wall Street News – Our regular review of the 10-Ks
eBay Inc. (EBAY) – Q1 2010 Earnings Call
Chief Online Gavel Swinger John J. Donahoe called out how eBay is “…becoming a more customer focused company. We are driving improvements to our user experience and we are measuring our success with three customer oriented metrics; net promoter score, velocity and market share. I have tied a portion of our leadership compensation to customer satisfaction.” SeekingAlpha
But the public knew this already, as eBay’s top goals for 2010 were revealed in a tweet by their corporate blogger, Richard Brewer Hay. Having seen a poster in a stair well in San Jose he posted an image of it on yfrog. The goals include 1) Increase eBay’s Net Promoter score by 10 percentage points. Source Tamebay
Nokia Corporation (NOK) – Q1 2010 Earnings Call
Nokia CEO Olli-Pekka Kallasvuo talked NPS on the call, referring to C3 with Ovi Mail: “Since January there have been 10 million downloads [...] Consumer engagement is very high. In addition, feedback on the user experience has been very good with a double-digit positive net promoter score since we launched.” SeekingAlpha
In contrast Parks Associates research of the basic phone market called out some bad news for Nokia. Their Consumer Decision Process research of CE product buyers showed Nokia, once the unequaled leader of the U.S. mobile phone market, last year fell to the bottom of the list of brands of basic mobile phones that people would recommend, as measured by Net Promoter Score (NPS).
Basic Cell Phones by Brand, Q3 2009:
- Samsung 32%
- Motorola 26%
- Basic Cell Phones 21%
- LG 18%
- Nokia 7%
The Home Depot, Inc. (HD) Q1-2010 Earnings Call
Frank Blake, boss of DIY shedder Home Depot explained on Q1-2010 call called out customer service as key to success: “Last year, […] we re-trained every associate in the company on our customer service expectations. […] We’ve seen consistent improvement in our net promoter score […] in the first quarter, 600 basis points over last year, even as our transactions increased 4.2%.”
Analyst William Truelove from UBS is one of the few bankers we have seen ask about customer service (so for that he gets our “Analyst of the Week” prize) and quizzed EVP Ellison further “…Did you have any kind of service metrics from the customers?”. Marvin Ellison shoots back “Frank talked about the net promoter score […] We get roughly 100,000 customer surveys per week that we look at […] trying to make sure that we have incremental improvement week over week, month over month.” SeekingAlpha
From another source we learn that Home Depot net promoter score (a score measuring customer loyalty) is almost 70%, an improvement of 800bps in the past year, (Shareholder Meeting 20 May 2010)
Hertz Global Holdings, Inc. (HTZ) – Q1 2010 Earnings Call
Mark Frissora, Hertz CEO called an increase of nearly 8 points in NPS “Our net promoter score rose 790 basis points in the US or 18%, reflecting the appeal of a newer fleet and the addition of popular new car classes.” We estimated Hertz NPS at around mid 50s last year (http://customergauge.com/2009/02/net-promoter-news-hertz-drives-26-in-europe/) so that may put them in the 60s – firmly in the Cadillac class. SeekingAlpha
BMW forecourter up 66%
UK BMW seller Vines reports a 66% year-on-year increase in its Net Promoter Score results, as computed by Mondial. Vines BMW (or Mondial) say they have gained insight into its customer satisfaction levels, and using this to predict future business growth. Note of caution: the math is provided by a PR company, and based on that, it’s unclear if that’s and impressive 66 NPS points up (impressive only because it must have been a low base) or a 66% increase, i.e. 10 to 16, (equally non-impressive). Still, they pepper the text with superlatives, “massive” and “huge” so that must be good then. Source
The fantastically named RV Daily Report tells us that Kampgrounds of America has added yet another guest feedback service for its franchise owners to help them improve service and drive camper nights through increased referrals, based on Net Promoter Score. KOA’s new on-line camper feedback survey offer KOA owners near-instant feedback from their guests following their stays – so far 9,200 surveys have been completed by the campers. RV Daily Report
Net Promoter Score, Verbatim Comments on a Digital Sign.
Inspired by the “crawler” (or news ticker) on SkyNews and CNN, or maybe by the “Calls Holding” message boards in call centres, we proudly present the new CustomerGauge Real Time Feedback Screen. It’s designed as a digital sign (a new buzz word that as far as we can tell means “giant plasma display” and a spare PC running Firefox or Safari). Ideal for placing in your marketing department, lobby, canteen or even boardroom.
We pack a lot of information on this screen. As a CustomerGauge client, you can survey your customers continually. As comments and scores come in they are displayed in the upper part, on a sliding carousel of the most recent comments. All the relevant transaction information is shown next to the comment.
In the “lower third” we show the Net Promoter Score® for the current week, past week, month and year to date, plus sending stats and other useful information.
It is the latest iteration of our display board, and is designed to:
- understand the “zeitgeist” by reading customer voice in real-time
- help react immediately to customer comments
- motivate staff
For CustomerGauge b2c clients, it’s a simple low cost add-on. Let us know if we can show you more.
NB: Can’t see the Flash image above? View it on YouTube.
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!
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.
CustomerGauge introduces new b2b survey tool for Net Promoter Score with publishable Document of Record
CustomerGauge announce new Net Promoter® Score tool for small and medium enterprises. The online system makes b2b surveys quick and inexpensive, includes many high-end features, and features Net Promoter Document of Record for publishing online.
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”.
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.
For product details and online demo, please contact firstname.lastname@example.org.
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.
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.
Download it here: PDF (14Mb). Please enjoy!
PS If you would like to translate into other languages please let us know.
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.
In 2005 an influential report by a UN body predicted “The Internet of Things” – a ubiquitous wireless network linking household objects and appliances, all talking to each other. The Internet of objects may encode and track up to 100,000 billion objects. Every human being is surrounded by between 1,000 to 5,000 objects.
No more lost keys, no running out of milk, waste is a thing of the past, and so on…
In our industry that means that “things” will report back to home base on their operation: “Running out of disk space – help!”. For CustomerGauge of the future, it may mean that systems have their own built-in survey mechanism that gathers feedback at the most appropriate moment. And, yes – we are working on that.
In the meantime, I can report that CustomerGauge has a small part of this future available from the November release.
We call this new report “Recommendation Score of Products” – or more snappily: “Score by SKU“, to help show customer satisfaction of each product. The results are compatible with the Net Promoter Score®, (jointly developed by SatMetrix and Fred Reicheld, also known as NPS®), and come from the question “Would you recommend this product to a friend?”
Until now, manufacturers have struggled to keep track of what customers thought of individual products (or stock-keeping units), and at best have relied on omnibus surveys taken once or twice a year. Results can be poor due to lengthy time lag, and low response rates (which mean that similar products can show markedly differing results).
CustomerGauge can be used to survey ALL transactions of a manufacturers online shop, or ALL product registrations. Automatically. And in a volume that gives reliable scores.
Results are shown in real time, and feedback can go straight to Product Managers.
We have already been piloting “Recommendation Score by SKU” with some of our clients over the last 90 days. One organisation has been using the report to sort their 2000 products by ranking into “Top 20 Best” and “Top 20 Worst” products, and examining the related voice-of-customer feedback. They distributed customer comments to product managers, de-listed many of the poor performers immediately, and changed instruction manuals on several others to help usability. On the best performers, some actions taken included more prominent marketing, re-pricing, and including some customer testimonials on web pages. The results have been impressive, with overall Recommendation Score (compatible with NPS®) increasing by several points.
Another organisation is taking the product feedback and recommendation scores from the direct sales division and distributing to product managers in the entire organisation. Although the direct division represents only small percentage of overall sales, the results give an excellent representation of total sales, and are available within 15 days of product purchase. This contrasts with 90 days or more from channel sales, and the results are unfiltered by store managers and account managers.
It’s one of the many new features on the ever-growing CustomerGauge platform that is already helping major organisations understand and measure customer sentiment. So until your products start to phone home with the latest user gossip, please let us know if we can arrange a demonstration for your organisation.