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Creating Customer Cults: Net Promoter Conference Day 2 (part 2 of 3)

Day2 Net Promoter Conference
eBayDay Two of the Net Promoter London conference kicked off with Kip Knight of Ebay.Factfans: 1.3 million people make all or part of their living from eBay. So listening to this community is pretty important for them - in fact eBay consider this community their strategic differentiator.Their simple feedback mechanism has to date yielded more than 4bn results. And anaylsys of this has yielded some Net Promoter Economics - a key driver for eBay Management. They know that Promoters are 7.1x more likely to buy than detractors.A few points I took away: They have a "Red Alert" program if something goes radically wrong based on NPS. Each week, the managers have a Monday morning ritual reading the previous week's verbatim comments. Twice a month the "coded" verbatims are distributed to the right people.
SatMetrix
Laura Brooks VP Research and Consulting - SatMetrix: Laura's content-rich presentation spoke about how loyalty is driven by trust - not simply products or services. Becoming a trusted partner means more to customers than product quality or operational excellence.Laura also defined "Networked Promoters" (sounded very much like the mavens in one of my favourite books "The Tipping Point"). These are your consumers who are superfans, but who are also connected to many others (via Blogs, forums etc). As I was listening I was thinking of Delia, Nigella, Oprah...The meat of her talk: findings from the PC industry (PC hardware makers) which has an average NPS of 27%. Apple is incredibly at 78% (80% promoters, 2% detractors).I'm not showing the Referral Economic workings here (it's in her white paper) but it shows how much a promoter is worth to the business.Example:
  • Average sales price: $1615
  • Average sale price to Promoter: $1818. Extra value added by recommendation:  $816. Total: $2634.
  • Average sale price to detractor: $1457. Value destroyed by  detractor: $1352. Net value: $105.
Moral: Create promoters. Detractors really produce bad profits!Rules of thumb: Promoters refer up to 4 people on average. Top of the range (Apple) promoters refer at rates 1.7x higher than average! Learnings: Create passion around the brand, spend less on acquisition.She wrapped up by urging solus Employee Net Promoter Surveys. Don't mix with traditional 70 question HR-esque attitude surveys.
AON
Peter Harmer, AON CEO: Peter's talk spoke about how AON sells a very conservative product (insurance) but had successfully implemented NPS to help them focus and improve sales.First lesson was how NPS was different by customer value band. The lowest segment (almost SME companies) had lowest NPS. Turned out they just wanted simple transaction interactions and the account teams were largely ignoring them. So they switched these accounts into a more appropriate group within company.AON also segmented customers on basis of job title: More senior execs in their customers seemed less happy than the risk adjustors or Admin folks.Another telling graph was NPS by salesteam. The jolly Geordies from the North Eastern office were getting much higher scores than the sulk southerners. Best practice training followed swiftly...Their textbook approach also analysed drivers to improve NPS, and plotted on axes of importance and performance, helping identifying the quadrant of what to improve. It helped AON take a defensive stance on some accounts and reduced the attrition rate by saving several accounts.
SIMPLE
Crispin Manners from Kaizo spoke about the UK cosmetic company Simple and how they had activated promoters.This was one of the most impressive presentations for me - it was less about a text book approach to top-down and bottom-up improving actions, but more a real action plan rooted in limited resources but a lot of creative energy.First the facts. 18 months ago Simple is a £60m company, #3 in market but with a loyal base of fans. 80% of their customers bought just one product. The brand was built on customer recommendation. But they found that customers who arrived through recommendation were most likely to become promoters (63% NPS).They created a VIP panel of consumers via a web community (SimplyCity - see what they did there?) with benefits of trials, VIP voting, "first looks" and inside scoops.Soon they found that just generalized beauty content was not valued. What this community wanted was more and more info about the brand. They wanted a clear personal relationship. In addition, financial rewards were not needed (discounts, exclusive products). The intimacy of feeling that they were being taken seriously by the brand was enough. The deal was with customers: "If you are an advisor, you should answer a few questions each month - about 3 minutes."Crispin reminded us about the "Hawthorne Effect". When you ask advice, people become more positive. (See my article Checkups make you feel better...)Some examples and numbers:
  • The VIP community is now 6000 strong.
  • Find people that love your brand AND the sector
  • One item the community helped with was choosing "face of Simple" and chose favourite packaging.
  • Product launch case study: Simple Derma was test marketed on the VIP community.
  • Identified many new uses and marketing messages
  • Got 530 customer reviews (many used in PR, marketing)
  • 60% recommended - 35000 samples generated 30,000 product requests
  • Result was a launch that exceeded expectations.
  • Simple now #2 in market with 45% NPS (sector average around 20%), growth outperform by 2.5x
  • And trials (cross - product usage) have now increased.
Crispin finished with a slightly off-topic but fascinating insight into cults, which succeed by
  1. Giving people a sense of purpose
  2. "Love-Bond" people. Thank and reward them
  3. Make things simple (black and white).
Not explicitly linking with the Simple case, but you could see where he was going...
Travel Counsellers
malcom hingleySales director of Travel Counsellors, Malcolm Hingley.His presentation was on how their travel company could grow by focusing on excellence in customer service. Seems that they have found a magic formula: Their 900 franchised agents now turnover £255m. NPS was 82% in an independent survey (LastMinute was a paltry 3%).Some amazing results. On their own NPS survey, half the agents scored 100% NPS, giving a group total of 94%.Some practical tips:
  • Engineer opportunities to keep in touch with end consumer
  • Engage customers with thank you cards (nice anecdote about how one agent delivers tickets on horse back)
  • A customer rating of 9 or 10 gets a personalized "Thank You"
  • Future: They are instigating referral tracking "How did you hear about us".
  • Future: Customer feedback too on hotels, services etc will be integrated.
Final tip he gave from a Harvard survey (sadly I could not catch the detail): If you give good service, 5% will refer you. If you give good service, and ask nicely to recommend, then 50% will refer you.

Next Up: "Zippin' up my Boots, Going Back to My Roots": Net Promoter Conference London: Notes Part 1

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