Unhappy customers to drive up Vodafone’s NPS
Vodafone Australia has lost 200,000 customers in the year to date, and a significant portion of its market share since widely publicised network problems in 2010. Worse, the bleeding hasn’t stopped yet. A number of customers who joined the company around 2010-2011 are forecast to leave in the near future, as their contracts expire.
All of which is potentially good news for the company’s NPS.
The reason is that most of these leaving customers were with the telco during the period where its network was causing user frustration, and still carry a negative impression of the brand. However, new customers that have subscribed with Vodafone since the network troubles ceased have a much more positive image – and correspondingly higher NPS.
But while these incremental improvements in NPS may bode well for mid-long term loyalty and organic growth (short term churn notwithstanding), according to the business there is plenty more ground to recapture. For starters, the organisation has made significant investment in customer experience, allocating one quarter of its marketing team to “experiences that drive NPS.” And regarding the need to earn back trust, CMO Kim Clarke notes: “You can’t earn that back if you don’t acknowledge the relationship you currently have. We have to acknowledge what has been, then invite customers in to what it is like today.”
Best Buy's Showroomers offer valuable advice
US retailer Best Buy has an in-store market share of 7%, compared to its physical store market share of 18%, and is one of many large businesses that has suffered in recent years from the interwebz-powered explosion of Showrooming (that's people who try in-store but buy at a cheaper price online, folks).
However, recently the business began to use Net Promoter to survey Showroomers as well as purchasing customers - an interesting move because Net Promoter is generally used to survey only purchasing customers. According to boss Hubert Joly, Showroomers' feedback is giving the organisation a new frame of reference:
"The company used to measure customer satisfaction of course, but only with buyers. And of course once you’ve bought your TV or your computer or your phone at Best Buy you are happy. We are now also asking the non-buyers and of course they have a different perspective, which gives us a more sober perspective."
While it may be providing a "more sober perspective", there are signs that the strategy may be having an impact. At its earnings update, the company announced that it grew its online business in Q1 by 16% year-on-year, in correlation with a 3-point increase in its NPS. Seeking Alpha
Net Promoter earns more loyalty from marketers...
According to a Forbes post, the emphasis on financial metrics to measure the ROI of social media initiatives has declined markedly between August 2010 and February 2013. Instead, CMOs are using other metrics, including Net Promoter, to measure the social media impact – metrics that reflect attitudes and how people talk about brands, but in the case of Net Promoter, ultimately increase retention and organic growth. The post says that the number of companies using Net Promoter increased 30% between August 2010 and February 2013. Forbes
...and loyalty begins to grow from scores of "6" or "7"
In a new report called The Economics of Net Promoter, Temkin Group analyzes NPS and loyalty across 19 industries based on feedback from 10,000 U.S. consumers. The research shows that consumers are more likely to repurchase and forgive companies that receive higher NPS scores. 81% of Promoters are very likely to repurchase from the company in the future and 64% are very likely to forgive the company if it makes a mistake.
Another interesting finding is that while the metric categorises Promoters as respondents who give a score of "9" or "10," loyalty appears to increase consistently starting from either "6" or "7." Press release
- IT biz Mural has announced a post-activation NPS of +78. In addition to this impressive score, the business boasts a customer activation growth rate of 233 percent, ninety-day churn reduction of 70 percent, and a host of other positive stats that correlate with its NPS. Press release
- As it announced a significant increase in headcount following its third consecutive year of growth, Fujitsu Australia and New Zealand also said it is using Net Promoter to drive high performance at the enterprise and account level. Newsmaker
- Corporate facilitation business Leadership Strategies has announced an NPS of +93. Press releases