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Tuesday, December 6, 2016

Are You Reporting a Misleading NPS?

We're not suggesting you stop using NPS.  On the contrary, we believe the Net Promoter Score (NPS) key question ("How likely is it that you would recommend...") is an important one to ask of all customers.  After all, we're committed to the value of word of mouth in generating new customers.  And we think NPS has done a phenomenal job focusing the C-suite's attention on the importance of improving the customer experience.

There's A Need for a More Descriptive Picture

Despite its compelling message, there is something that can be very deceiving about NPS scores as they are currently reported within most companies.  Take for an example an NPS score of +8.  The score has been calculated by subtracting the percentage of Detractors (those customers awarding the brand a 0-6 score) from the percentage of Promoters (those awarding the brand a 9-10), while setting aside the Passives (those awarding the brand a 7-8).  You see the ambiguity?  A +8 NPS could mean that a small percentage of your customers would be willing to recommend your brand, say 12%, while 4% would not (with 84% of your customers scored as Passives with no strong feelings in either direction).  In that case we would describe this NPS distribution as an example of a "Passive-Majority".

But that same +8 NPS could have resulted from 50% of your customers scored as Promoters who feel very positive about their experience and would likely recommend your brand, while at the same time 42% of your customers are potential Detractors who would be unlikely to recommend and could well be about to churn away from your brand.  We'd characterize that distribution as "Opposing-Extremes".

Helping to Establish the Right Priorities

The problem is that with the way NPS is currently reported, such totally different underlying scenarios can be totally masked from senior management.  By not revealing the distribution of scores, management doesn't have all of the information it needs to formulate the correct remediation strategy.  The first distribution described above (with just 12% Promoters) desperately calls for a strategy that ignites the passion of customers for the brand, advancing them from Passives to Promoters.  In contrast, the second scenario above cries for some reconciliation of the 42% Detractors who are ready to do considerable damage to the brand.

So, What Are Our Recommendations?

Clearly knowledge of the distribution of NPS ratings underlying the NPS score would help management formulate more realistic and effective strategies.  So...

  1. We recommend that all brands provide a distribution of the NPS data that underlies the NPS score. That is, along with the reporting of the overall NPS, also report the percentage of Promoters and the percentage of Detractors that produced that NPS.  As an example, NPS of +8 (with 12% Promoters and 4% Detractors).
  2. For those with a Detractor percentage of over 25%, consider whether you could afford to lose 25% of existing customers and whether you can afford to have such a significant portion of your existing customers out 'poisoning the well' of future customers with their "recommendations" against your brand. If not, conduct an analysis to identify the greatest points of dissatisfaction driving those Detractor attitudes and make fixing those your top priority (before trying to generate any more Promoters).
  3. For those with a high percentage of Passives (7 and 8 scores being awarded by customers), don't ignore them just because they aren't included in the NPS calculation. Recognize that emotional attachment to a brand is a big part of customer loyalty.  Assuming that the Detractor percentage is not seriously impacting the total NPS, conduct a key driver analysis to identify the factors having the greatest impact on satisfying customers and formulate tactics to convert Passives into Promoters.

It's all about focus and prioritization!  But for both you really need more than just the NPS score.

2:34 pm est          Comments

Tuesday, November 22, 2016

In Building Loyalty, the Details Matter!
Dale Carnegie, the self-help expert whose book How to Win Friends and Influence People was one of the world's most phenomenal bestsellers said, “a person’s name is to that person the sweetest and most important sound in any language”.  He explained, “Respect and acceptance stem from simple acts such as remembering a person’s name and using it whenever appropriate.”
Carnegie's Words Should Be Remembered by All Marketers
No matter how long ago he wrote them, they remain pretty good words of wisdom for any company trying to develop loyal customers and advocates. If you don’t believe him, think about the flipside and the damage of failing to make that positive impression.  As college football season begins, consider the aggressive world of college football recruiting, where coaches and assistants work to establish and keep contact with 16-18 year old high schoolers and their parents. It’s a high-stakes game facilitated by events, visits, phone calls, letters, and text messages all aimed at gaining a commitment from potential star players .

Data Entry and How to 'Shoot Yourself in the Foot'
Now consider all that hard work and the price paid by the University of Michigan for apparently not attending to how it entered information in its recruitment database.  Reportedly Michigan sent a nice note thanking four-star commit, Aubrey Solomon and his Mom, for attending a recent BBQ.  But there was just one problem (well, maybe two).  First, neither Aubrey nor his Mom attended the event! Second, the school had also managed to misspell both his first and last names in its communications!

Aubrey’s reaction as he decided to de-commit and open up possible recruitment from other schools – “ I guess they don't have tabs on me."
Folks in Ann Arbor are pretty unhappy today, and their condition can only be blamed on sloppy data handling.

Though Not As Newsworthy, Our Own Anecdotal Example...
Following a doctor’s visit last month we received an invitation to participate in a patient satisfaction survey.  In opening the email we immediately saw how little the hospital system knew about our experience or, apparently cared.  They had listed our doctor’s last name first in a sentence clearly structured for first name/last name.  (In this case there could be no mistaking which was the doctor’s first and last names.)  While the juxtaposition may have worked fine with some entries; our guess is that the rules weren’t clear for how names were to be entered into the physician database, or somebody wasn’t careful enough, or the cover letter writer and the survey programmer didn’t communicate with one another. They had spelled our name correctly, but with the doctor’s name butchered it demeaned the whole communication.  We felt like a number in a system which was just chugging-out impersonal junk emails that no one on their side had even glanced at.
How Good is the Quality of Your Prospect/Customer Databases?
Relationship building with customers depends on leveraging that "sweetest and most important sound".  And doing so both substantially and correctly.  Making a regularly scheduled check of your customer database quality as a part of your relationship-building process, and regular “data hygiene work” will go a long way to helping win prospects to your brand and in better retaining current, desired customers into the future
11:29 am est          Comments

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Customer Experience Partners, LLC
Measurement, Management, Optimization
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