Earlier this month, I wrote a blog post on LinkedIn that praised the merits of “intelligent acts of kindness”—common-sense, low-cost gestures that really make a person’s day. These efforts are “intelligent” for businesses because they are thoughtful, practical, appropriate—and sustainable.
At the end, I invited readers to share moments when companies exceeded their expectations. My latest post pulls together some of my favorite stories.
Read the post here: Your Intelligent Acts of Kindness: Inspiring Stories of Niceness
Look at Apple’s retail stores, American Express, Vanguard and the other loyalty leaders. They’re relentless in their determination (1) to learn customer attitudes and behaviors through regular Net Promoter–style feedback mechanisms; (2) to contact dissatisfied customers, both to learn where things went wrong and to fix the problem when possible and (3) to build continuous customer-related improvements into their daily operations. Continue reading
Some executives think they need to resort to pricey incentives to cultivate loyalty among their customers. But often, all it takes is a common sense, low-cost gesture to brighten a customer’s day and inspire him or her to share the experience with friends and family.
In my latest post on LinkedIn, I look at what I call “intelligent acts of kindness”—simple things companies can do to delight customers without spending a lot.
Read the LinkedIn post here: Intelligent acts of kindness: Why it pays to be nice
This blog post originally appeared on LinkedIn.
Analysts use many yardsticks to predict the direction of a company’s stock price—price-to-earnings ratios, dividend payout ratios, EBITDA and so on. Some are so complicated: Try calculating a company’s weighted average cost of capital—or better yet its EVA (economic value added) on the back of an envelope.
Without a doubt, these measures have their place. But these figures tend to look backward at a company’s performance, tallied weeks after the period has ended. And they provide little practical advice to help employees improve. It’s merely complicated data on a spreadsheet. Continue reading
More companies these days are using the Net Promoter System (NPS) to gauge how well they’re doing in the eyes of their customers. They conduct short, frequent surveys, often after every significant interaction. They typically ask how likely (on a zero-to-10 scale) the customer would be to recommend the company or product, and what the primary reason is for the rating. The companies then classify customers as promoters (ratings of 9-10), passively satisfied (7-8) or detractors (0-6). The resultant Net Promoter Score—promoters minus detractors—helps companies track their performance and gauge the effectiveness of investments in building customer loyalty.
Once a company starts this process, it often happens that scores begin to climb. And it’s easy to start patting yourself and your colleagues on the back—wow, we’re doing better and better by our customers. But you shouldn’t accept these favorable results too easily. Continue reading
This post originally appeared on LinkedIn.
In certain businesses with limited competition or long-term contracts, executives can easily delude themselves into thinking they have captive customers. They might even be partly right: Many of their customers may use their services without complaint and accept the automatic deductions flowing out of their checking accounts.
That is, until a major disruptive trend shatters this fantasy. And that always happens.
Think about utilities. A century and a half ago, most gas companies had profitable businesses providing lighting to homes and businesses. Then Thomas Edison hit the scene with a centralized electrical power plant in 1882. Gas companies didn’t just lose their lock on their customers, they had to rethink their entire business model. When was the last time you turned on your living room lights with a match? Continue reading
This article originally appeared on LinkedIn.
The byproducts of happy clientele are obvious. Sales rise. Stores fill. Facebook “likes” stream in. These promoters recommend the companies they like to their friends.
The cost of detractors—a company’s “haters”—is less clear to many business leaders. For one thing, they may still do business with you — even though they don’t like it and they make sure their friends and your employees know they don’t. 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. Continue reading
The UK’s National Health Service (NHS) recently joined the list of public sector entities that are turning to the Net Promoter Score to gauge the loyalty of their various constituents when it started asking patients in England and Wales how likely they are to recommend the medical service they received to their friends or family.
UK Prime Minister David Cameron introduced the program, called The Friends and Family Test, last year. The effort aims to improve patient care by collecting feedback and encouraging providers to take immediate action to address problems, hallmarks of the Net Promoter System.
Last week, I discussed the origins of the Net Promoter Score (NPS) in light of the NHS program on iPM, a show on the BBC’s Radio 4. Tim Kelsey, NHS England’s National Director for Patients and Information, also explained his views of NPS on the segment:
When we developed the Net Promoter Score, we knew it would only work if we made the underlying questionnaire simple, easy and fast. If your survey response rates are less than 40% for a consumer-focused company or less than 60% for a business-to-business firm, it’s worth taking a closer look at your feedback process.
I offer some simple advice about surveys in my latest blog post on LinkedIn. After all, no survey can help your company if customers won’t complete it.
Read the post here: Why No One Wants to Take Your Survey
When it comes to delighting customers, leading companies don’t limit themselves to the people outside their walls. They look inward at ways they can apply the Net Promoter System℠ (NPS®) values to their internal operations.
We’ve written extensively on employee NPS and the importance of fostering an engaged staff. But some companies are going a step further and using the Net Promoter System to collect feedback among their internal departments, using the input for coaching and development.
In these scenarios, an IT help desk or an in-house travel department might use an e-mail questionnaire to ask users– how likely they would be to recommend the department’s services to their colleagues. From there, the department can identify promoters, passives and detractors, and get to the root causes of users’ concerns. It’s a natural fit for the Net Promoter System’s feedback loops, which emphasize constant input and improvement. Employees gain a better understanding of their colleagues’ needs and learn to provide more effective service.
Here are some questions to consider before you bring NPS inside your organization:
Customer service was simpler in the era before big box chains and online shopping, but many important truths remain the same: High-quality service doesn’t have to cost a lot, and it starts with knowing your customers.
In my latest blog post on LinkedIn, I discuss how a smiling face is still the ultimate symbol of client satisfaction. However, these days “smiles” come in many forms. They can be a “like” on Facebook, a positive review on Yelp or a recommendation of a company’s services to a friend.
Read the post: The Oldest, Best Measure of Customer Happiness
The New York Times’ DealBook blog profiled a private equity firm this week that uses an increasingly popular yardstick to size up potential investment targets: Net Promoter Scores.
Los Angeles-based Brentwood Associates looks for small- and medium-sized companies that have amassed large followings. Co-founder Bill Barnum shares our view that loyalty “ultimately drives market share.” Brentwood often kicks off its investment research by evaluating customer satisfaction metrics, including the Net Promoter Scores, of potential targets. Most of the consumer-focused companies it invests in have scores in the 80s and 90s, Barnum said in the article.
“We don’t know what color is going to be popular next fall,” Barnum said in the article. “But we can look at data and know where customer loyalty has been and where it’s going.”
The strategy appears to be working. Brentwood has invested in more than 40 companies, including the tennis gear maker Prince Global Sports and the retailer Zumiez. The revenue growth of companies held for more than a year by its fourth fund has averaged 127%, according to The Times. The company, which manages more than $650 million, is currently raising its fifth consumer-focused fund.
It makes sense to us. Bain’s analysis shows that loyal customers stay longer, buy more, bring in new customers through referrals, and cost less to serve. That’s why a company’s Net Promoter Score relative to its direct competitors has been shown to explain significant variations in growth rates in that industry. It’s a wonder more firms like Brentwood aren’t using NPS data to drive their investment strategies.
Check out the article here: If Its Customers Love a Business, This Equity Firm Does, Too
I recently spoke with HubSpot Chief Marketing Officer Mike Volpe about how marketers are using Net Promoter System to gauge brand sentiment and forge a deeper connection to other parts of their companies’ operations. We also talked about the changing needs of consumers, and the importance of closing the loop.
HubSpot, an inbound marketing company, uses NPS to gauge the views of customers, employees and attendees of its conferences. Here’s an excerpt of the discussion:
What’s your most important piece of advice for marketers related to NPS?
Don’t fall into the trap of thinking of NPS only as a metric. The NPS community has quickly morphed this framework into an entire system of management that enables companies to refocus their energies on the right goal: profitably delighting more customers.
CEOs recognize that NPS is a measure of their personal reputation and legacy — so use that intuitive connection to make marketing more relevant. Everyone in the company cares about their reputation — and can relate to the need to create more promoters and fewer detractors. Use this universal appeal to get the rest of the organization pulling in the direction that you, the marketer, sees as the right path.
Read the full interview: An Interview With the Creator of the Net Promoter System
When we developed the Net Promoter Score, the goal was to cut through the numbers noise and provide a truly useful metric for companies. Its power would lie in its ability to improve service quickly as part of a larger system of real-time feedback and training.
However, the Net Promoter Score achieves several aims at once: Not only does it provide a simple metric to guide employees and managers, it offers a useful performance gauge for investors. I explain why in my latest post on LinkedIn.
Read the post here: One Number That Says it All
If you like it, click “follow” and my future posts will show up in your LinkedIn feed.
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.
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