NPS Blog

Never take your customers for granted

Posted on June 13, 2013 by Fred Reichheld

In certain businesses with limited competition or long-term contracts, executives can easily delude themselves into thinking they have captive customers. That is, until a major disruptive trend shatters this fantasy. And that always happens.

In my latest post on LinkedIn, I discuss the dangers of taking customers for granted. Even if you think your customers have no alternative to your services (and trust me, they’ll find one eventually), their loyalty matters.

Read the post here: Your Customers Aren’t Yours

If you like it, click “follow” and my future posts will show up in your LinkedIn feed.

The danger of dismissing a dissatisfied customer

Posted on May 16, 2013 by Fred Reichheld

The byproducts of happy clientele are obvious, but the cost of detractors is less clear to many business leaders. By the time their irritation is evident in traditional metrics—declining sales, failed product upgrades, defections to rivals—the cause of their discontent often has ballooned into a widespread problem.

Detractors are so dangerous to companies that the Net Promoter system weights them more heavily. In my latest post on LinkedIn, I discuss why companies need to take angry customers seriously.

Read the post here: What Does an Angry Customer Cost?

 

Airlines turn to NPS to cut customer turbulence

Posted on April 4, 2013 by Rob Markey

After irritating travelers with delays, oversold flights, baggage fees, dwindling amenities, poor communications and a host of other missteps, airlines are taking steps to earn back the loyalty of passengers.

And several carriers use a Net Promoter system as their guide, reports travel editor Scott McCartney in a new Wall Street Journal article. Not only are these companies asking customers for feedback, they’re proving that they’re listening. From the article:

“NPS is core to how we make decisions,” said Robin Hayes, JetBlue’s chief commercial officer. One example: NPS influenced JetBlue’s choice to offer customers one free checked bag when rival carriers began instituting baggage fees. Executives believed that the revenue generated by a new fee would be offset, in the long run, by lower revenue from weakened loyalty.
Continue reading →

The most toxic kind of corporate “waste”

Posted on April 2, 2013 by Fred Reichheld

This post originally appeared on LinkedIn. 

In the suburb where I live, people regularly demolish 4,000-square-foot homes just because they’re a little outdated, clearing the way for new 8,000-square-foot estates. Everything goes into the dumpster— all the flooring, drywall, window, carpets, fixtures and even the kitchen sink! Our local landfill is full of discarded houses.

Of course, these same folks religiously separate their paper and plastic trash each week, in the name of saving the planet. I’m all in favor of recycling, but in this case, their commitment to environmentally responsible and sustainable practices seems superficial at best.

In the corporate world, there’s a similar pattern. Companies love to use buzzwords like “stewardship” and “sustainability” in their public relations campaigns. But inside their walls, many treat their most precious assets as disposable: people. Continue reading →

Delighting bank customers one phone at a time

Posted on March 27, 2013 by Fred Reichheld

Almost one-third of the 74,700 US consumers that Bain & Company surveyed for its latest global Customer Loyalty in Retail Banking report used smartphones or tablets for banking during the three months prior to the survey. That’s up from one-fifth of respondents in 2011.

Some might feat that automating interactions and keeping customers away from branches might hurt loyalty, but the opposite is true. In my latest post on LinkedIn, I explain why mobile banking is a great way to delight the customer profitably.

Read the post here: Why Your Bank Wants to Keep You Away

If you like it, click “follow” and my future posts will show up in your LinkedIn feed.

Telstra’s Net Promoter system

Posted on March 19, 2013 by Rob Markey

A great example of a company’s leader using the Net Promoter system to develop a more customer-focused culture: Thodey has a way to go on customer satisfaction from the Australian newspaper The Age.

 

 

 

The growing popularity of employee NPS

Posted on March 15, 2013 by Rob Markey

Employees who feel real enthusiasm generally find creative ways to make their customers’ lives better and earn their deep loyalty. It’s a concept we’ve been working on for several years.

In the latest issue of HR Magazine, the publication of the Society for Human Resource Management, journalist Kathryn Tyler explains why companies are turning to Net Promoter to gauge the true sentiment of their employees. The magazine interviewed HR executives at a number of companies that use NPS, including Carolina Biological Supply, Westpac, Edmunds.com and Concentra.

As noted by the executives at the companies Tyler interviewed, NPS works well for employees for the same reasons it works for customers: It’s simple, fast and clear. When a survey is short but meaningful, the answers are all the more powerful. Anonymity allows employees to provide the honest feedback that managers need to create an inspiring and productive culture. Continue reading →

NPS training that you’re likely to recommend

Posted on March 14, 2013 by Rob Markey

For every analytics system and measuring tool, there are twice as many conferences, seminars and certification programs promising to make you an expert in them. But sometimes these workshops are worth it. A user of Quora asked me what I thought of Satmetrix’s Net Promoter certification program, and here’s what I said:

Q. Would you recommend the Net Promoter score course by Satmetrix and why?

A. You’ll get three major benefits from the training and certification.

First, you’ll gain a much better understanding of the full Net Promoter toolkit. You’ll learn the technical and analytic techniques that help ensure you have a reliable and actionable source of feedback.

Second, you will earn a recognized certification, which is valued by other practitioners.

Finally, you will meet others who are also using the Net Promoter system. Many of them will have valuable experience and connections that will prove valuable to your company and to you, personally.

Can good service get lost in translation?

Posted on March 7, 2013 by Rob Markey

When your Net Promoter scores vary widely across countries, it’s natural to wonder if a cultural difference is to blame. Before you dismiss a discrepancy as beyond your control, it’s crucial to dig deeper and consider other factors. A user of the social network Quora sought guidance on a similar issue at her company. Here are my thoughts:

Q. Does the UK tend to score lower in consumer product Net Promoter scores? We tend to see much lower NPS for the same product in the UK versus Canada.  Is this unusual?

A. We have not found consistently lower Net Promoter scores in the UK than in other English-speaking countries.

On the other hand, when we look at the Net Promoter scores of divisions in some multinationals, their Net Promoter scores vary from market-to-market – sometimes by a lot. Our analysis typically reveals three underlying issues, which vary from company to company and from business to business: Continue reading →

Are people talking about your brand? One good way to find out

Posted on March 1, 2013 by Rob Markey

The Net Promoter system is a natural fit for service companies, but what about consumer goods, such as cereal and shoes? A user of the social network Quora asked whether the question “How likely are you to recommend us to a friend” applies to non-service companies. Here’s my answer:

Q. Are Net Promoter scores applicable to consumer products business with no direct retail component?

A. Consumer products and packaged goods manufacturers typically use the Net Promoter system in two ways:

  1. To collect, learn from and put into action feedback from channel partners (retail and wholesale distribution)
  2. As a metric for gauging consumer reactions in new product development

In practice, we have seen many more successful applications of the feedback system for use in channel/account relationship management than for calculating brand scores.

Nevertheless, we have seen cases of such strong correlation between Net Promoter scores and brand strength that we find an increasing number of marketers using NPS for “quick and dirty” brand research.

With customer service, sometimes no answer is your answer

Posted on February 21, 2013 by Rob Markey

How valuable is your Net Promoter® score if only 2% of your customers took the survey? It’s a fair question with a simple answer. A user of the social network Quora, which has a vibrant NPS community, recently asked this question. Here’s my answer:

Q. Does NPS correlate to NPS response rate?

A. In most forms of customer feedback—NPS included—deeply committed and loyal customers are more likely to respond than disaffected and unengaged customers. So we find that non-responders in most situations are disproportionately skewed toward being detractors and passives.

To verify this in your own data, compare the post-survey behavior of the following groups: Continue reading →

How salespeople can destroy your business

Posted on February 19, 2013 by Fred Reichheld

This post originally appeared on LinkedIn. 

Some executives don’t seem to care what their employees do to close a sale. Customers vote with their wallets, so buyers must have liked what they saw, right?

Would those executives feel the same if they knew their salespeople over-promised and used half-truths to hook customers? Would they be outraged if an elderly shopper was bullied into buying a warranty he didn’t need?

They should be. Those salespeople might have raked in a few extra dollars of revenue, but their selfish actions created unhappy customers who won’t hesitate to warn all their friends about their bad experience. Continue reading →

Numbers count, but feelings come first

Posted on February 15, 2013 by Fred Reichheld

This post originally appeared on LinkedIn. 

Long ago, one of my statistics professors in college cautioned me that statisticians tend to obsess about creating the highest R-squared. Inflating one’s R-squared might be just the ticket for getting your results published in an academic journal, but the resulting model, my professor told us, is not necessarily the most useful.

The most useful model is one that helps people make good decisions and take action. The more complicated you make your model in search of superior R-squared—lots of variables, logarithmic transformations, and so on—the harder that model is to understand intuitively and the less often people will have the confidence to use it and learn from it. Statisticians’ hearts may start to palpitate when their model’s R-squared creeps upward toward 1.0, but nobody else is really moved by the square of the correlation coefficient. Continue reading →

Why Cornell asks alumni the ultimate question

Posted on February 11, 2013 by Stu Berman

Cornell University holds 1,400 events a year for alumni, parents and friends—one every six hours. These events cost millions of dollars and require a considerable effort to plan. But do they help the university reach its goals?

In the October issue of CASE Currents, the magazine of the Council for Advancement and Support of Education, Jennifer Lynham Cunningham discusses how the university has been using a Net Promoter system to find out whether these events engage alumni. Cunningham, senior director of metrics and marketing at Cornell’s alumni association, says tracking NPS has helped the organization learn what works and what doesn’t at its events.

For the past three years, the university has been sending attendees a five-question survey after each event using the online survey tool SurveyMonkey. After 30 events, the organizers have noticed some helpful trends. For example, often when people are unhappy about an event, it’s because something they expected was absent, whether that’s a person they hoped would attend or an amenity that wasn’t available. Getting to the root of customers’ complaints enables Cornell to make the right changes quickly. Continue reading →

Don’t try to satisfy your employees!

Posted on February 7, 2013 by Fred Reichheld

This post originally appeared on LinkedIn. 

Plenty of companies now understand that they need to turn more customers into promoters if they are to grow profitably. They also recognize that they can’t accomplish that goal unless front-line employees and supervisors are enthusiastic and love their work.

The latter realization has given a boost to the mini-industry of experts in employee engagement. These experts help companies implement periodic surveys, usually once a year. The surveys gather confidential responses about how happy employees feel along a variety of dimensions. The experts aggregate the data, identify the key drivers of satisfaction, and recommend improvements.

The problem with this process is that it doesn’t work very well. “Satisfying” employees isn’t even the right goal. The right goal is to put everyone in your company in a position where they can delight customers. And, when they succeed in doing so, make sure they get full recognition and appreciation for their accomplishment. Continue reading →