What Drives Net Promoter Scores (NPS) in IT?

A previous post examined Net Promoter Scores (NPS) for tech vendors and the relationship between NPS and market share based on feedback from IT decision makers within large firms. Since I’ve had questions about that post, I decided to examine a common question: What’s driving those NPS scores? It turns out that the answer (no surprise) is customer experience.

We examined a number of metrics and their relationship with NPS in two areas:

• Correlation (R). This looks at how connected one metric is to another, ranging from -1.0 to 1.0. A correlation above 0.5 is strongly positive and above 0.7 is very strongly positive.
• Slope. This looks at the change in NPS that relates to a one-point change in the metric. A higher slope means a change in the metric has a higher change in NPS.

Our first analysis examined NPS scores versus the Temkin Experience Ratings for Tech Vendors. It turns out that there was a very strong correlation (R= 0.77) and the slope is 1.13.

We then examined the correlation and slope between NPS and components of the Temkin Experience Ratings as well as with product and relationship satisfaction scores.

Here are some observations from the analysis:

• Customer experience is critical. Temkin Experience Ratings has the highest impact on NPS, with the highest overall correlation and slope.
• You have to be easy to do business with. The highest individual correlation (.75) and slope (1.11) is with the accessible element of the Temkin Experience Ratings, which looks at how easy the company is to work with.
• Relationship trumps product. It turns out that the correlations are about the same for relationship satisfaction and product satisfaction, but the slope is much higher for relationship satisfaction.
• Cost of ownership stands out. When it comes to the slopes, cost of ownership (.99) stands out amongst the satisfaction items. Support of account team (.86) is also relatively high.

The bottom line: To improve NPS, improve customer experience.

You can purchase this data for $295. The Excel spreadsheet contains NPS, Temkin Experience Ratings, relationship satisfaction, and product satisfaction data for 60 tech vendors in the analysis as well as for 28 others with sample sizes of less than 60 respondents.

9 Recommendations For Net Promoter Score (NPS)

This week is the Net Promoter Conference in London. Since these events often spur a ton of questions about Net Promoter Score (NPS), I put together one of my periodic posts about NPS. If you’re not familiar with NPS, it’s based on asking customers a question like this:

How likely are you to recommend <COMPANY> to a friend or colleague?

Respondents are categorized as “Promoters,” “Detractors,” or “Passives” based on their answers. The Net Promoter Score (NPS) is calculated by subtracting the percentage of Detractors from the percentage of Promoters (Passives are ignored).

My take: Let me start looking at NPS with some data points from the report, The State Of Customer Experience Management, 2011:

• 48% of large companies (more than $500M in revenues) are using NPS
• 67% of those using NPS report positive results (15% say it’s too early to tell)
• 84% of large firms with voice of the customer programs (including those that use NPS), report success from those efforts

NPS can be a valuable metric, but only when incorporated within a strong voice of the customer (VoC) program. Here are a handful of overall recommendations about NPS:

1. Stop dreaming about an “ultimate question.” Having worked with dozens of organizations on their NPS efforts, I can tell you that the NPS question is not nirvana. Even the most successful users of NPS ask customers a series of questions and get feedback through a portfolio of mechanisms.
2. Look for magic in the “why.” To some degree, it’s useless to know if someone is likely or unlikely to recommend you if you don’t also understand why they feel that way. So you need to make sure customer feedback helps you understand why customers feel the way that they do. Which leads to my next recommendation…
3. Focus on improvements, not questions. Feedback is cheap, but customer-insightful actions are precious. The goal for any feedback mechanism (like NPS) is to drive improvements in your business. Successful NPS programs have strong closed-loop VoC programs that go from detection of customer perceptions to deployment of improvements (see my post about the 6 Ds of a voice of the customer program).
   
4. Don’t lose sight of segments. An overall NPS score across your customers may be a good metric for aligning focus across the company, but it’s not very diagnostic. A good VoC program needs to track this type of data across key customer segments and understand which interactions (“moments of truth”) are driving those scores.
5. Understand the elements of experience. When it comes to making improvements, you need to understand the three core elements of any experience: Functional, Accessible, and Emotional. A good program needs to provides insights into how customers perceive each of these elements.
6. De-emphasize the “N” in NPS. NPS improves by eliminating Detractors or by increasing Promoters. but those changes can also offset each other. So the “netting” of the scores removes important clarity. Companies need to look at the rise and fall of Promoters and Detractors independently, since the changes needed to affect these areas are often quite different.
7. Tap into the power of the language. There’s a lot of data to suggest that other measures such as the ACSI’s satisfaction index are as good as NPS (many people argue that it’s better, but I don’t want to enter that debate). What sets NPS apart is the wonderfully clear language around “Promoters” and “Detractors.” Make sure that the education across the company focuses heavily on those terms.
8. Build a strong VoC program, with or without NPS. The overall program is more important than the choice of a metric like NPS. So make sure you focus on building a strong VoC program whether or not you use NPS (check out our VoC resource page).
9. Remember, this is a long-term journey. Companies can make short-term improvements with superficial changes, but long-term success requires institutional capabilities. Start by understanding the 6 laws of customer experience and create a roadmap for building four customer experience core competencies: Purposeful Leadership, Compelling Brand Values, Employee Engagement, and Customer Connectedness.

The bottom line: Successful NPS implementations require strong VoC programs

Report: The Economics of Net Promoter

We just published a Temkin Group report, The Economics of Net Promoter, which examines the link between NPS and loyalty across 19 industries. Here’s the executive summary:

Net Promoter Score (NPS) is a popular metric, but how does it relate to loyalty? We analyzed responses from thousands of consumers and examined the connection between NPS and three areas of loyalty: likelihood to repurchase, likelihood to forgive, and the actual number of times they recommend a company. Compared to detractors, promoters are almost six times as likely to forgive, are more than five times as likely to repurchase, and are more than twice as likely as detractors to actually recommend a company. Examining the data, we also found that consumers who gave a score between 0 and 4 have particularly low levels of loyalty. The analysis examines 19 industries: airlines, appliance makers, auto dealers, banks, car rental agencies, computer makers, credit card issuers, fast food chains, grocery chains, health plans, hotel chains, insurance carriers, Internet service providers, investment firms, parcel delivery services, retailers, software firms, TV service providers, and wireless carriers. Promoters who are likely to repurchase range from 87% for grocery chains to 73% for TV service providers, those who are likely to forgive range from 72% for rental car agencies to 59% for TV service providers, and those who actually recommended a company range from 80% for retailers to 47% for parcel delivery services.

Download report for $295 (includes Excel dataset)

Here’s the first figure from the report. It has a total of 43 figures that include specific graphics for each of the 19 industries in the study.

Here’s an excerpt from the first section that examines the data cross all industries:

To understand how NPS relates to customer loyalty, we examined NPS scores for companies across 19 industries based on feedback from 10,000 U.S. consumers. The analysis covers more than 95,000 pieces of feedback from consumers about those companies. Examining three areas of loyalty across industries, looking at promoters versus detractors, we found that:

• Promoters are almost six times as likely to forgive. We asked consumers about their likelihood to forgive a company if it delivered a bad experience and found that 64% of promoters are likely to forgive compared with 11% of detractors.
• Promoters are more than five times as likely to repurchase. We asked consumers about their likelihood to make additional purchases from a company and found that 81% of promoters are likely to repurchase compared with 16% of detractors.
• Promoters are more than twice as likely as detractors to actually recommend. In a separate study of 5,000 U.S. consumers, we asked consumers how many times they actually recommended each company. It turns out that 64% of promoters have recommended the company compared with 24% of detractors.

We also examined the level of loyalty across each response on the NPS scale between 0 and 10. This analysis shows that:

• Super detractors are much less loyal. Forgiveness and repurchase loyalty stay at a consistent low level between 0 and 4 on the scale. Actual recommendations begin to increase after 5.
• Midpoint attracts low recommenders. When we examine the actual quantity of recommendations across the NPS scale it turns out that there’s significant drop in recommendations at the midpoint of the scale, when 5 is selected.
• Text anchors attract responses. We analyzed the volume of responses across the 11 point scale. Consumers appear to select the three responses with text anchors at a disproportionately high rate: “0,” “5,” and “10.”

Download report for $295 (includes Excel dataset)

The Excel file provides all of the data from the 43 figures.

Note: See our report, Net Promoter Score Benchmark Study, 2012 and the post 9 Recommendations For Net Promoter Score along with all of my other posts about NPS.

The bottom line: Promoters are more loyal than detractors.

P.S. Net Promoter Score, Net Promoter, and NPS are registered trademarks of Bain & Company, Satmetrix Systems, and Fred Reichheld.

Congratulations to the 2013 Customer Experience Vendor Excellence Award Winners!

Congratulations to the 2013 winners of our Customer Experience Vendor Excellence Awards:

Allegiance

NICE Systems

Walker Information

In addition to those three winners, seven other companies were named as finalists: ForeSee, Ipsos Loyalty, Mattersight, Medallia, Rapide, TeamSupport, and Waypoint Group.

We received 24 strong nominees, which highlights the strengthening ecosystem for supporting customer experience efforts. Here’s what a couple of the judges had to say about the nominees:

Kate Woodcock: “The breadth and depth of capability shown by all the submissions bodes very well for our still-maturing industry.  We’re in good hands – with help from these organizations, companies that choose to commit to and adopt customer-driven change can expect to differentiate themselves in their industry and reap the rewards.”

Mila D’Antonio: “The winners and finalists demonstrate a real commitment to integrating their clients’ voice of the customer data across channels, and helping their clients enable customer-focused cultures. Their customers show proven results that a focus on the customer experience can directly correlate to financial benefits.”

Nominations were judged on rhe following criteria:

• Capabilities. What products and/or services do you offer that are uniquely able to help companies improve their customer experience?
• Results. How have you helped companies improve their customer experience and overall business results?
• References. What do clients say about your work?

For more information about the awards, visit the CX Vendor Excellence Awards page.

If you want to more information about the winners and finalists, I’ve included the first two sections of their nomination forms (“Company Overview” and “Make the Case”)  below.

13 Customer Experience Trends to Watch in 2013

2012 was a very active year for customer experience management. I expect 2013 to be an even more robust year as we move deeper into the Era of CX Professionalism.

Here are 13 CX trends to keep an eye on this year as these efforts gain maturity:

1. Decline of surveys. As more companies thirst for customer feedback, the number of surveys has escalated. But there is a limit to customers’ willingness to complete surveys. As completion rates get more difficult to maintain, companies will become more efficient with the questions they ask, target questions at specific customers in specific situations, and stop relying as much on multiple-choice questions. Tidbit: When we asked large companies with VoC programs about the changing importance of eight listening posts, multiple choice survey questions were at the bottom of the list. 
2. Rise of text analytics.Companies are learning that some of the richest insights from customers come from unstructured content like comments on surveys, calls into the contact center, social media conversations, and chat sessions with agents. Companies will shift more of their focus towards collecting and analyzing these types of feedback. Tidbit: Nearly three-quarters of large companies with VoC programs are using or considering text analytics.
3. “Big data” predictive insights. It’s hard to talk about trends without discussing big data (in order to be fully buzz-word compliant). But what will this term mean for customer experience in 2013? Companies will blend together customer feedback data with troves of other data they have in CRM and other systems about customer transactions and value. Using this large dataset, they will predict customer satisfaction levels and Net Promoter Scores across their customer base. Since analytics requires more than just technology, we’ll see a surge of demand for data scientists. Tidbit: More than half of large companies with a VoC program are using or considering predictive analytics, but only one-third of large companies feel that they are effective at integrating CRM data in their VoC efforts.
4. Anticipatory service. As companies gain a deeper understanding of customers through research and analytics, they will use that information to develop more individualized customer experiences. Look for companies to route callers to phone agents most likely to help them based on anticipating why they are calling, train front line employees with different scripts based on anticipating a customers’ needs/interests/emotional styles, and proactively recover from service issues before customers even complain about them based on detecting potential changes to a customers’ loyalty. Tidbit: When companies responded very poorly after a bad experience, 47% of consumers stopped spending completely with the company. When they had a very good response, only 6% stopped spending and 37% increased their spending.
5. Experience-infused product development. We’ll see more companies create products with customer experience embedded throughout the entire development process. What will this look like? Product teams will define usability requirements, set minimum experience thresholds for product launch, and design the entire service lifecycle. Fidelity Investments evaluates all new product and experience efforts via a CX scorecard to determine the level of customer experience risk involved in a proposed project. Its “Customer Lens” process incorporates standards and checkpoints into business case and new product development methodologies to deliver more customer-centric experiences.
6. Design-based process improvement. As customer experience efforts highlight the need to redesign more operational processes, companies will combine customer experience efforts with other process improvement efforts such as lean sigma and design thinking. These combinations, such as GM’s bringing together of customer experience and product quality, will merge process-centric tools with the power of deep customer empathy. We’ll also see more companies follow firms such as Intuit that are embedding design thinking across their organizations (check out the Stanford d.school). Tidbit: 74% of CX professionals think that customer experience design is important for their company, but only 34% think that their firm is good at it.
7. Loyalty-focused contact centers. As companies more fully understand the link between customer experience and loyalty, especially with customer service, they will increasingly view contact centers as value-creators and not just cost centers. Some of the effects in 2013: less focus on average-handle-time and other productivity metrics, more focus on customer feedback and quality metrics, more on-shoring of previously off-shored interactions, and more investment in agent training and coaching. Tidbit: Consumers that are satisfied with customer service interactions are more than 4 times as likely to repurchase than those who are dissatisfied.
8. Appreciation of employee assets. Companies are beginning to see the deep connection between employee engagement and customer experience. So many firms will focus on their employees in 2013. We’ll see more CX programs develop internal ambassador programs and an initial wave of HR organizations leading employee engagement efforts across what we call Five I’s of Employee Engagement: Inform, Inspire, Instruct, Involve, and Incent. Tidbit: Highly engaged employees are 5.8 times more committed to helping their companies succeed and 3.5 times more likely to do something good for their employers that is not expected of them.
9. Mobile, mobile, mobile. Consumers will have more smart phones, more mobile apps, more tablets for them to do even more things wherever they go. Companies will increasingly integrate mobile into their product offerings and service experiences while integrating mobile with other channels, especially when it comes to combining desktop applications with mobile apps being used in physical stores. Tidbit: 31% of U.S. consumers use apps on their mobile phones on a daily basis.
10. Software as an Experience. The initial rise of cloud-based software (a.k.a. SaaS, or software-as-a-service) focused on renting access to software instead of the historical approach of selling licenses. As cloud-based software expands, we’ll see these offerings cater more explicitly to the needs of customers. How? More simple, highly-focused, specialized applications (like smartphone apps), more focus on quick initial usability, more sharing of best practices (usage, not technical), and customization based on behavioral analysis of users. Tidbit: Net Promoter Scores for tech vendors are more correlated to customer experience than product performance.
11. Resurgence of values. As more companies push forward on their CX journeys, they’ll find that there’s nothing holding their efforts together. The desire to improve customer experience will fall victim to other priorities if the effort is not tied to the core values of the company. But many organizations are so heavily focused on their operations that they’ve lost sight of their raisons d’être. I expect more companies to articulate and recommit to a core set of values like those of Zappos and Whole Foods, customer promises like that of TNT Express, and mission statements like that of the Dallas Cowboys.
12. Rethinking risk-experience trade-offs. Customer experience is often constrained by rigid requirements imposed by legal, compliance and risk management teams. As a result, companies are forced to collect additional information from customers, add additional steps in processes, and eliminate valuable self-service options. In 2013, given the increased emphasis on customer experience, we’ll see companies push back on and successfully eliminate many of the most egregious experience roadblocks.
13. Continuing CX education. Some customer experience practices are becoming standardized enough to create educational curriculum. In 2013, we’ll see more corporate training departments rolling out CX training, MBA programs incorporating more CX content into service and marketing courses, and the creation of standalone CX academic courses. Tidbit: The percentage of CX professionals that see training as an important professionals development goal increased from 52% in 2011 to 57% in 2012.

The bottom line: 2013 will be a busy year for CX professionals!

15 Of My Favorite 2012 Posts

I was a busy blogger last year, with more than 140 posts in 2012. While I enjoyed writing all of my them, here are 15 that I enjoyed a little bit more than the rest:

• 10 CX Mistakes to Avoid. I enjoyed pulling together all of these importent lessons for improving CX efforts.
• My Manifesto: Great Customer Experience Is Free. This “repost” captures my core views on customer experience.
• Report: The ROI of Customer Experience. It’s very fulfilling to find a clear connection between CX and loyalty through analysis of large-scale data.
• Temkin Group Welcomes New CX Analyst, Aimee Lucas. I was thrilled to write this one, because Aimee is a fantastic addition to the team.
• Seven Reasons Why CX Will Thrive, Not Die. I wanted to contribute to a very important discussion started by Colin Shaw.
• The Excellent Economics Of Service Recovery. It was great to objectively demonstrate the importance of service recovery.
• Report: CX Needs More HR Focus on Employee Engagement. I enjoyed this unique research that examines CX through the eyes of HR professionals.
• Net Promoter Scores For Obama And Romney. It was fun applying CX principles to the election.
• Great Patient Experience Is Free. I really enjoyed commenting on an article by Dr. Atul Gawande.
• Report: The Future of Customer Experience. I had been thinking about this research for a long while and was very happy to finally chart the path of CX.
• What Drives Net Promoter Scores (NPS) in IT? I enjoy unexpected findings such as relationships being more important than products for IT professionals.
• Debriefing the CXPA Members Insight Exchange. This was an awesome event, so I had fun writing about it.
• Off Topic: My Message to Graduates. While this post has nothing to do with CX, I enjoyed writing my advice in this hypothetical speech.
• Temkin Experience Ratings Spotlight: USAA. This company tops many of our ratings, so I always enjoy speaking with USAA’s CX leader Wayne Peacock.
• Analytics from Mark Cuban to Text Mining. I wrote about a sports analytics conference that I attended with my son; enough said.

The bottom line: I hope that you enjoyed my 2012 posts

Interesting CX Data Tidbits From 2012

As you’ve probably noticed, our research is full of rich data from companies and consumers. So I looked through my posts from this year and extracted a number of datapoints that you might find interesting…

Value/ROI of Customer Experience:

Consumers are almost 7x more likely to follow advice from a health plan after having satisfactory interactions.

Compared with NPS detractors, promoters are more than 2x as likely to recommend retailers airlines, more than 3x as likely to recommend insurers and health pans, and 4x as likely to recommend banks

Consumers that are satisfied with customer service interactions are more than 4x as likely to repurchase than those who are dissatisfied.

The correlation between CX and NPS for tech vendors is 0.77, which is higher than the correlation between product satisfaction and NPS.

A modest increase in customer experience can result in a gain over three years of up to $382 million for US companies and up to £263 million for UK firms.

When companies responded very poorly after a bad experience, 47% of consumers stopped spending completely with the company. When they had a very good response, only 6% stopped spending and 37% increased their spending.

Elements of CX Leadership:

Companies with strong CX metrics programs are 5x as likely to be CX leaders compared with those who have weaker CX metrics programs

Customer-centric culture is a key goal for 77% of CX leaders and only 34% of other firms

46% of VoC programs are in the two earliest stages of VoC maturity

HR professionals are more than 2.5x as likely as CX pros to say that HR provides considerable help for CX efforts.

75% of HR professionals view employee engagement as very important and 61% believe they are doing a good job in this area.

72% of companies think predictive analytics and open-ended verbatims will become more important sources of customer insight, compared with only 30% who view that way about multiple choice survey questions.

Only 28% pf VoC programs have reached the top two stages of VoC maturity.

Making the company’s culture more customer-centric is more than 2x as important for CX leaders than for CX laggards.

35% of large companies are in the lowest stage of CX maturity.

74% of companies think that customer experience design is important, but only 35% believe that they are good at it.

CX leaders have more than a 16 percentage point advantage over CX laggards in consumers’ willingness to buy more, their reluctance to switch business away, and their likelihood to recommend.

The companies that are good or excellent at customer experience has increased from 16% in 2011 to 19% in 2012.

46% of companies plan to increase spending on CX in 2012 compared with only 8% that expect to decrease spending, and text analytics is the area with the most spending momentum

40% of U.S. employees at companies with 1,000+ employees are moderately or highly engaged compared with 59% at companies with 10 or fewer employees.

Highly engaged employees are 5.8x more committed to helping their companies succeed and 4.7x more likely to recommend that someone apply for a job at their company.

Companies with good customer experience have 2.5x more engaged employees than companies with poor customer experience.

The CX Profession:

28% of large companies have 20+ employees focused on CX

There are 87,000 CX professionals in the U.S. and almost 14,000 in Canada.

99% of CX professionals think that customer experience is a great profession to be in and 89% are satisfied with their current position, but only 63% are happy with their opportunities for advancement

Social Media Adoption:

Consumers are more than 50% more likely to use social media like Facebook and Twitter when purchasing cell phones than they are for selecting health plans

A quarter of consumers read or update Facebook several times per day and more than half of consumers younger than 45 use Facebook daily.

77% of U.S. consumers use Facebook daily, 13% use Twitter daily, and 5% use LinkedIn daily.

Consumers who earn $100K or more are 2.5X as likely to tweet about a bad experience, compared with those who earn less than $50K.

General Consumer Behavior:

52% of U.S. consumers prefer good service over low prices for banks and computers, but only 25% prefer good service for rental cars and groceries.

Healthy people are more than twice as likely to be happy than unhealthy people.

89% of healthy people are happy, Happy people but only 41% of unhealthy people

Apple Mac users are wealthier, younger, and enjoy watching soccer more than Dell and HP users

Happy people are 50% more likely than unhappy people to do something that’s good for their company, but unexpected of them

31% of U.S. consumers use mobile apps daily.

U.S. consumers go on the Internet 5.9 hours per day and watch TV 3.9 hours per day.

African-Americans are the most avid fans of football (67%), Hispanics are the most avid fans of baseball (38%), Caucasians are the most avid fans of NASCAR (20%), and Asians are the most avid fans of golf (18%).

Web self service is the preferred channel for checking a balance (60%) and updating an address (51%), while talking on the phone is the favorite for investigating a mistaken bill (58%) and resolving a technical issue (46%).

The bottom line: The numbers show a lot of CX work ahead of us

SimplexGrinnell’s NICE Workshops Engage Employees in VoC

I often speak with Karl Sharicz, Manager of Customer Experience at SimplexGrinnell (a Tyco Company), because he’s a very active board member of the Customer Experience Professionals Association. During one of our recent conversations he gave me an update on the company’s NICE workshops, interactive sessions where local offices review customer verbatims and develop action plans. It’s a great practice that other companies may want to “borrow” so I pulled together this post.

Here’s an overview of the Next Improvement in Customer Experience (NICE) Workshop program:

• It’s a highly focused 5-hour interactive on-site session for key district personnel (managers, admin, and front-line) to develop an action plan for improving their customer experience with district service delivery.
• In small teams, workshop attendees are exposed to their district CSAT metrics and customer verbatim comments drawn from 80 to 100 of their customers that were surveyed over the past 12 months.
• Using that customer feedback, they identify and agree upon their most prevalent service delivery challenges. They brainstorm new and best service practices to implement within the next 30 days that will begin to make an impact on customer satisfaction (and NPS scores) within the next 90 days.
• Implementation details:
  • A high-potential district employee is selected as a Customer Champion and is trained to become a workshop facilitator. All facilitators must have attended a NICE Facilitator Training session. A member of the Customer Experience team participates remotely in each workshop via phone and will serve as the “subject matter expert” in case any questions cannot be addressed by the local facilitator.
  • The district selects up to 18 workshop attendees (maximum) from among inspectors, technicians, service supervisors, dispatchers, project managers, contract administrators, construction managers, etc.
  • The primary deliverable from the ½-day NICE workshop is a list of 15-20 potential action items aimed at improving service delivery. Those potential actions will be further refined over the next 30 days to select 3 to 5 actions or service process improvements that the district can immediately implement that will begin to change customers perceptions on services delivered by the district.
  • These workshops should be conducted each year at or near the anniversary date of the original workshop—based on customer survey data for that district collected over the previous 12 months. This ensures sustainability.

Karl was nice enough to answer a series of questions:

To begin with, how would you describe your role?

Net Promoter Scores Vary By Region

We recently published a benchmark of Net Promoter Scores of 180 companies across 19 industries. Someone asked me if the scores varied across different parts of the U.S. To be honest, I had never thought about that question and had certainly never researched it.

As you may be able to tell, I have a hard time leaving a quesiton unanswered. So I examined the data by region for all 19 industries. As you can see in the chart below:

• NPS is highest in the South for 16 out of 19 industries.
• NPS is lowest in the West for 13  out of 19 industries.
• There’s a double-digit NPS gap in nine industries.
• The largest NPS gapsare as follows:
  • Major appliances (21 point gap between South and West)
  • Grocery chans (18 point gap between Midwest/South and West)
  • Hotel Chains (17 point gap between South and Northeast)

The bottom line: Want to improve NPS? Survey more from the South and less from the West

Net Promoter Labels Obscure Actual Recommendation Patterns

We recently published a benchmark of Net Promoter Scores of 180 companies across 19 industries. Within that research, we showed that promoters are more likely than detractors to repurchase. In a previous blog post, we examined how promoters and detractors actually recommend companies.

In this post, we go a step further and look at how consumers actually recommend based on the specific response to the NPS question. As you can see in the graphic below:

• Zero means no. If someone picks the lowest score on this scale, then they rarely recommend a firm.
• One to five is a neutral zone. Consumers that choose the next five higher responses have about the same frequency of recommending, between 18% and 29%.
• Everything counts from six on. Thirty-two percent of consumers who selected six on the scale actually recommended those companies; the level of actual recommendations ramps up from there for each score higher on the scale
• NPS labels hide some insight. The NPS process labels people who select “0″ to “6″ as detractors, “7″ or “8″ are called passives, and “9″ or “10″ are promoters. Theses labels may not accurately describe recommendation patterns. For instance, a detractor that selects “0″ is quite different than a detractor that selects “6.”
• Five may be a negative collector. It appears that consumers may be selecting “5″ (the midpoint of the scale) when they are relatively upset. It could be that the selection of a “5″ out of “10″ is considered a failing score for many people (just as a 50 out of 100 points on a test would be seen as failing). This phenomena could explain the drop-off in recommendations at that level. We’ll continue to study this issue since it might require companies to rethink how they examine their survey results.

The bottom line: Not all promoters and detractors are alike.

Off Topic: Top Issues For Women Voters

I’m in DC this weekend. We really enjoyed the National Gallery of Art (my favorite artist was Monet) and the National Portrait Gallery. Here’s my favorite presidential portrait…

It’s hard to be in this city and not think about politics. Since the presidential candidates have been recently focusing on women voters, I dug into our consumer data to understand  how both women and men feel about 11 issues. It’s the same dataset that I used to analyze consumer sentiment towards the U.S. presidential candidates with the Net Promoter Score. As you can see in the graphic below:

• Women and men have the same top issues. The top issues for selecting a president are the same for both men and women: improving the U.S. economy, trustworthiness of the candidates, their vision for the future, and their leadership skills.
• Women care more about a lot of things. For 10 of the 11 issues on our list, more women than men felt that they were important.
• Abortion and healthcare have the largest gender gaps. Women that see abortion rights as an important presidential issue outnumber men by 10 percentage points. Next on the list is abortion rights with an eight percentage point gap.
• Men care more about energy. The candidates’ positions on the energy policy is the only issue that men care about more than women.

The bottom line: Women and men share the same top issues

Most Promoters Promote And So Do Some Detractors

We recently published a benchmark of Net Promoter Scores of 180 companies across 19 industries. Within that research, we showed that promoters are more likely than detractors to repurchase. In a separate analysis, we examined the actual number of times that people recommended companies and compared that to the NPS rating they gave those companies. As you can see in the graphic below:

• Promoters are more likely to recommend. Promoters are much more likely than detractors to recommend a company across all industries.
• Not all promoters recommend. The number of promoters that recommended a company ranges from 47% (parcel delivery services) to 80% (retailers).
• Some detractors recommend. The number of detractors that recommended a company ranges from 13% for banks to 39% of retailers.

What doesn’t show-up in this graphic is the intensity of recommendations. Our detailed analysis examined the frequency of recommendations across all of these industries. Promoters are an average of 3.4x more likely than detractors to recommend companies to three or more friends (ranging from 2.1x more likely for major appliances to 5.7x more likely for banks).

Bottom line: NPS is a good, but not perfect indication of actual recommendations

Report: Net Promoter Score Benchmark Study, 2012

We just published a Temkin Group report, Net Promoter Score Benchmark Study, 2012. It provides NPS data on 180 U.S. companies across 19 industries. Here’s the executive summary:

USAA took the top two spots for its banking and insurance businesses while HSBC came in at the bottom for banking and credit cards. Our analysis of differences across consumer demographic segments showed that NPS tends to go up with age, doesn’t vary much by income levels, and is often highest with Asians. We also asked consumers what would make them more likely to recommend the companies and found that promoters are more likely to select lower prices and detractors are more likely to select better customer service. While there is some debate about the efficacy of NPS, our analysis shows that promoters are much more likely than detractors to purchase more in the future across all industries. To help you implement a successful NPS program, we’ve included eight tips such as don’t believe in an “ultimate question” and use control charts, not pinpointed goals.

Download report for $295
(includes the data)

The industries included in this report are airlines, auto dealers, banks, computer makers, credit card issuers, fast food chains, grocery chains, health plans, hotel chains, insurance carriers, Internet service providers, investment firms, major appliance makers, parcel delivery services, rental car agencies, retailers, software firms, TV service providers, and wireless carriers.

The report contains the following components:

• NPS for 180 companies across 19 industries
• NPS differences based on age, income, and ethnicity of consumers
• Improvement areas selected by promoters and detractors by industry
• Connection between NPS and future purchases by industry
• Eight tips for implementing a successful NPS program

Download report for $295
(Includes the data)

The bottom line:  Companies need to give customers a reason to recommend them

Adobe’s Customer and Engineering Excellence Summit

Hello to everyone at the 2012 Customer and Engineering Excellence Summit!

Here are some blog posts and research with content that I referenced in my keynote speech:

• The Future of Customer Experience
• The State Of CX Management, 2012
• 2012 Temkin Experience Ratings
• The ROI of Customer Experience
• 2012 Temkin Experience Ratings of Tech Vendors
• What Drives Net Promoter Scores (NPS) in IT?
• The Four Core Customer Experience Competencies

Here are some additional items from my track speech on NPS:

• Prepare for Next Generation VoC Programs
• Net Promoter Score and Market Share For 60 Tech Vendors
• 9 Recommendations For Net Promoter Score (NPS)
  

You may also want to check out these eBooks:

• eBook: The 6 Laws Of Customer Experience
• eBook: 10 CX Mistakes to Avoid

Consider signing-up for our monthly newsletter, The Customer Experience Journal.

Best regards,

Bruce Temkin
Customer Experience Transformist & Managing Partner

Obama and Romney Promoters By Income and Employment

In my previous two posts, I examined the Net Promoter Scores (NPS) for President Obama and Mitt Romney and the issues that their Promoters care about.

In this post, I examine the percentage of U.S. consumers that are Promoters (likely to recommend the candidate to their friends or relatives) of the candidates based on their annual income levels and their current employment status. As you can see in the infographic below:

• Obama has the largest advantage with consumers making less than $25,000 per year and the smallest lead with consumers making between $75,000 and $100,000 per year
• Romney’s support increases with income level
• Both of the candidates have their strongest support from high-income consumers
• Obama has the largest advantage with students and the smallest lead with unemployed consumers

The bottom line: Obama’s strongest base are low income consumers and students