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.

Report: The State of Customer Experience Management, 2013

We just published a Temkin Group report, The State of CX Management, 2013. The research shows where large companies are along their customer experience journeys. Here’s the executive summary:

We surveyed more than 200 large companies and found an abundance of Customer Experience (CX) ambition and activity. Most companies have a CX executive leading the charge, significant CX activities being coordinated by a central team, and a staff of six to 10 full-time CX professionals. Using Temkin Group’s CX competency assessment, we found that only six percent of companies have reached the highest two levels of customer experience maturity as firms struggle the most to master Employee Engagement and Compelling Brand Values. When compared with CX Laggards, CX Leaders have stronger financial results, more CX ambition, more CX leadership, and they are more successful with their employee engagement efforts. Executives in companies with stronger CX competencies also focus more on delighting customers and less on cutting costs.

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Here are some of the findings from the research:

• While only eight percent of companies believe that they are leading their industries in CX today, 62% have goals to be the best within three years
• Sixty-one percent of respondents have a senior executive in charge of the company’s overall CX efforts and 71%  have a centralized CX group
• The median firm in our study has six to 10 full time CX employees
• Seven out of ten respondents identified “other competing priorities” as a significant obstacle to their CX efforts
• Only six percent of the companies that completed our CX Competency and Maturity Assessment have made it to the top two levels of maturity, Align and Embed
• We compared companies with leading CX efforts with other firms and found that they have better financial performance, more centralized CX activities, better employee engagement, stronger employee engagement, and more management attention to corporate culture

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The bottom line: Most companies remain in the early stages of CX maturity

Seven Steps for Developing Customer Journey Maps

In Temkin Group’s previous report on B2B CX best practices, we provide examples of companies using a customer journey map (CJM), which is a critical CX tool. We included this graphic which is valuable for any company, B2B or B2C, that is thinking about using CJMs.

Let’s circle back with the basics, what is a CJM? It’s a representation of the steps and emotional states that a customer goes through during a period of time that may include some interactions with your organization. CJMs are valuable because they help identify how a customer views an organization by putting the interactions with a company in the context of the customer’s broader activities, goals and objectives. The output often includes an easy to understand graphic such as this example I’ve used from Lego for many years:

Here’s an example of a CJM we created to showcase the power of CJMs. Note how the journey represents the customer’s point of view and not just the company touchpoints.

Often times, companies mistake a CJM for a touchpoint map, which is looking at individual interactions or “touches” with customers. The problem with this approach is that it often loses the broader context of how that touchpoint fits within the overall goal and objectives of the customer. As a matter of fact, mapping internal touchpoints is one of my 10 CX Mistakes to Avoid.

Given the importance of CJMs, I put together answers to some FAQs:

• Do we need to do customer research? No, but it is much better if you do. If you assemble the right front-line employees who have day-to-day interactions with customers, then your CJM may be somewhat accurate. But very likely it will be missing some steps and perceptions of customers, especially in areas of the journey where the customer doesn’t think about the company. And if you just pull together a bunch of people in headquarters, then your CJM will often represent an oversimplified, fantasy about what customers go through. The best CJMs start with internal information to frame the effort, but spend the time to validate and update the CJM through strong customer research.
• What type of customer research do we need to do? This is all about qualitative research. You won’t find how customers feel about the journey in your quantitative datasets. You will need to go out and speak to customers within your different segments to understand how they view the overall journey. This can include ethnographic techniques like journaling and contextual inquiry. After you have the journey defined, you can use some quantitative methods to identify how often some activities occur.
• Do we need to hire an outside firm to do a CJM? You don’t need to, but there are some good firms with a lot of experience in this area. If your internal research organization has strong ethnography skills, then you can probably follow our seven steps above and complete it on your own. As with any activity, the vendors that have done a lot of these are going to be more skilled at the process and in making sure that the output is actionable. If you can’t afford to hire an outside firn, then it’s still worthwhile to go ahead and do the project internally as best as you can.
• Is there a CJM that we can copy? There are a lot of examples of the physical maps, but that’s not what’s important about the process. You are doing CJMs to uncover specific insights that you will use for fixing problems, wowing customers in the future, or establishing measurement tracking systems. If you focus too much on copying someone else’s CJM, then you will often miss the nuances that are key for your customers and your company. And, more importantly, you lose the institutional learnings that come from going through the process.
• Do we need to do a CJM for every customer segment? Yes, at least every important one. It may be that some of your customer segments follow the same journey, in which case you can combine them but you don’t want to have CJMs that are an amalgamation of multiple segments. You’ll end up with a bunch of generalities and less useful insights. It’s okay to have the output show one journey with different variations after you’ve examined each segment individually.
• Are CJMs for the entire lifecycle of a customer or for a specific stage? Yes and yes. CJMs can be used at different levels of the customers’ journey. They can examine how customers go through a multi-year journey like the car ownership experience to a more specific journey like going on a family vacation.
• Are CJMs good for finding mistakes to fix or for designing future state experiences? Yes and yes. CJMs can be used to identify gaps in the current state of experiences as well as helping to identify the opportunities for better future state experiences. Depending on your goal, you will likely want to adjust your customer research approach.
• How much detail do we need? It depends on what you are trying to accomplish. The maps shown above are at a level that would help point a company into specific areas for improvement. If you wanted to redesign an area such as rebooking a flight, then you would really want to get much more granular information about the customer journey in that area.

The bottom line: Good things happen when you focus on your customers’ journey

Report: Best Practices in B2B Customer Experience

We just published a Temkin Group report, Best Practices in B2B Customer Experience. Here’s the executive summary:

Customer experience is gaining more attention within business-to-business (B2B) organizations. Rightfully so—customer experience drives loyalty with business customers. At the same time, clients and prospects, who increasingly compare business interactions with their personal consumer experiences, are raising the expectations of B2B relationships. While our research has shown that most B2Bs are still mastering the basics, our interviews with 28 companies uncovered best practices for building a more client-oriented mindset through closed-loop voice of the customer programs, customer journey maps, and virtual client advisory boards. Using the customer insights they collect, forward-thinking B2B organizations are becoming more client-centric in how they develop new business, create account plans, and proactively provide support (or intervene when service breakdowns occur). To sustain superior customer experience, B2B firms must master four competencies: Purposeful Leadership, Compelling Brand Values, Employee Engagement, and Customer Connectedness.

Download report for $195

The report identifies many best practices across two areas:

• Building a client-oriented mindset. Organizations have a natural tendency to operate from an internal perspective, focusing on the needs of their functional silos more than on their clients. To offset this tendency, B2B firms need to build repeatable and systematic processes for gathering, analyzing, and taking action on customer insights. The report identifies best practices in the following areas:
  • Develop Closed-Loop Voice of the Client (VoC) Programs. Having a reliable flow of customer insights across the organization is critical to driving customer-centric actions.
  • Use Journey Maps to Better Understand Clients’ Needs. To better understand how clients see their experiences, B2B organizations can use a tool known as customer journey mapping.
  • Tap Into Virtual Client Advisory Boards. Client advisory boards (CAB) and councils provide the opportunity to acquire more insight into customer needs and expectations.
• Building client-centric relationship management. Today, account management functions tend to be oriented around sales generation and firefighting. To build stronger, longer-term ties with clients, Temkin Group expects that B2B firms will head towards a more client-centric model of account management that uses client insights throughout the relationship management continuum. The report identifies best practices in the following areas:
  • Account-Level Experience Reporting. To acquire, retain, and grow B2B relationships, account managers need to understand what’s working and not working for each of their clients.
  • Insightful Business Development. B2B organizations that gather and use the right customer insights during this early stage will create a differentiated experience from the start of the relationship
  • Collaborative Account Planning. By taking a structured and collaborative approach to developing in-depth account plans, companies can tap into their enterprise knowledge.
  • Proactive Intervention and Support. B2B organizations need to use customer insights and feedback from account managers to intervene in service experiences gone wrong as quickly as possible with well-defined, robust recovery procedures.

The report provides a plethora of specific practices in these areas from companies such as Becker and Poliakoff, CDW, Cisco, Citrix, Dell, Enterasys, Equinix, Genworth Financial, Lithium, Lynden, Philadelphia Insurance Companies, Oracle, Salesforce.com, SanDisk, Stream Global, Verint, and VMware.

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The bottom line: B2B companies need more customer-centric enterprise relationships

 

Report: The Four Customer Experience Core Competencies

Temkin Group just published an update to the report that defines one of our fundamental frameworks, The Four Customer Experience Core Competencies. This report lays out the building blocks for customer experience success. This topic is so important that we’re giving this report away for free. Here’s the executive summary:

Research shows that customer experience is highly correlated with loyalty. While any company can improve portions of its customer experience, it takes more than a few superficial changes to create lasting differentiation. Organizations that want to become customer experience leaders need to master four customer experience competencies: Purposeful Leadership, Employee Engagement, Compelling Brand Values, and Customer Connectedness. To gauge your progress, actively use Temkin Group’s Customer Experience Competency and Maturity Assessment. This assessment will identify areas of strength and weakness in your CX efforts as well as identify your progress along six stages of CX maturity: Ignore  Explore, Mobilize, Operationalize, Align, and Embed.

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Here’s how I describe the four CX Competencies:

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The bottom line: It’s time to improve your CX competencies

 

B2B Versus B2C in VoC

In the research for the Temkin Group report Prepare for Next Generation Voice of the Customer Programs, more than 200 large organizations completed our VoC program competency and maturity assessment. This tool uses 30 questions to gauge the effectiveness of these efforts across the 6 Ds of a VoC program: Detect, Disseminate, Diagnose, Discuss, Design, and Deploy. The tool also identifies the level of maturity of these programs.

I took a closer look at the results from the 75 B2B companies and 62 B2C companies that completed our VoC assessment.

The data shows that:

• B2B firms have more mature VoC programs. Over half of the B2B programs with formal VoC programs are at least Analyzers, the third stage of VoC maturity. B2C firms are slightly less at 47%.
• All competencies need work. Across all six Ds, only a small portion of B2C and B2B firms—ranging from 10% to to 26%—are rated as good or very good.
• B2C is best at Discuss. B2C firms perform the best at communicating feedback in a cross-functional setting. This is also the place where they most outperform B2B firms.
• B2B is best at Discuss and Disseminate. B2B firms get the highest score, 21%, for these two phases.
• Design is weak for both B2B and B2C. Very few B2B or B2C companies are good at using user-centered approaches for making improvements based on voC insights.

The bottom line: B2B and B2C Need to Improve VoC

Report: Lessons in CX Excellence

We just published a Temkin Group report, Lessons in CX Excellence. This 127 page report provides a rich set of best practices and a glimpse into the customer experience efforts of 11 companies that were finalists in Temkin Group’s 2012 Customer Experience Excellence Awards. Here’s the executive summary:

The following 11 organizations are finalists in Temkin Group’s 2012 Customer Experience Excellence Awards: Blue Cross Blue Shield of Michigan, Bombardier Aerospace, Citrix, EMC, Fidelity Investments, JetBlue Airways, Microsoft, Oklahoma City Thunder, Oracle, Safelite AutoGlass, and Sovereign Assurance NZ. This document provides highlights of their customer experience efforts and best practices across the four customer experience competencies: Purposeful leadership, compelling brand values, employee engagement,  and customer connectedness. The report also includes the finalists’ detailed nomination forms.

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Here are excerpts of our description from each of the finalists:

• In just 17 months, Blue Cross Blue Shield of Michigan assembled its customer experience team and leveraged a variety of insights and data to devise a comprehensive strategy to “Find and Fix” near-term opportunities and “Transform” the organization to be customer-centric at its core.
• Bombardier Aerospace drives continuous improvement through its multi-faceted Amazing Customer Experience (ACE) initiative. Customer feedback is essential to ACE and is gathered through a variety of channels including surveys, customer forums, and Bombardier’s Executive Listening Program.
• Citrix places an emphasis on giving customers a voice in its product roadmap and building a user-centered culture in order to continuously improve its products, services, and experiences. Through the Design Matters initiative, Citrix helps its employees rethink core business processes with a focus on customer needs.
• EMC has a Total Customer Experience (TCE) program with a mission to enable business growth through improvements based on a customer-focused, data-driven strategy. The program provides ways for customers, partners, and EMC field personnel to provide feedback on their experiences, and measures customer quality in every interaction.
• Founded on the core value “The Customer Is Always First,” Fidelity Investments has a well-established, well-rounded program that delivers enterprise-wide results. The program is comprised of four integrated elements: Voice of Customer & Associate, End-to-End Process Improvement, Culture & Communications, and Measurement & Rewards.
• The Customer Insight (CI) team at JetBlue Airways provides the business with a multi-faceted view of its customers through feedback from surveys, text analytics, social media monitoring, and third party benchmarking. The CI team also has a program in place to address all unsolicited customer feedback that is received regardless of source through its Customer Retention Program.
• Microsoft believes that the better it is at building a culture of accountability, listening and responding to customers, simplifying offerings, and innovating based on customer feedback, the stronger its Customer and Partner Experience (CPE) will be.
• “Create Repeat Guests Profitably” is the mission of the Guest Relations team of the Oklahoma City Thunder. The team uses various fan feedback platforms to gather feedback including email, text message, telephone, written submissions, and social media, all of which are promoted on the team’s website and during in-game announcements.
• Oracle drives consistent customer experience activities across all regions and lines of business through a structured framework and standardized approach to monitoring the customer experience: Listen, Respond, Collaborate for Customer Success. The portfolio of feedback tools includes transactional and product surveys, relationship surveys, customer advisory boards, user experience labs, and independent user groups.
• On the company’s path back from bankruptcy, Safelite AutoGlass CEO Tom Feeney set a goal in 2008 to double business in four years by 1) putting Safelite’s people first by focusing on talent development and employee engagement and 2) going above and beyond to delight every customer.
• Sovereign Assurance of New Zealand’s strategy is to create customer engagement and advocacy through effortless experiences, with a program of initiatives around four key levers: customers front and center, stickier relationships, maximize touch points, and focus on value.

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The bottom line: There’s a lot to learn from these excellent CX efforts

Report: What Happens After A Good or Bad Experience?

We just published a Temkin Group report, What Happens After A Good or Bad Experience? This large-scale consumer study uncovers negatively biased feedback and significant upside from good service recovery. Here’s the executive summary:

We asked 5,000 U.S. consumers about their experiences with 179 companies across 19 industries. More than 60% who had a bad experience with a fast food chain, credit card issuer, rental car agency, or hotel cut back on their spending, and many stopped completely. But service recovery helps. For every level of improvement in how they responded to a bad experience, companies were rewarded with more sales. Unfortunately, firms aren’t very good at service recovery, especially banks and credit card issuers. TV service providers delivered the greatest number of bad experiences while grocery chains had the fewest. At a company level, ING Direct and Holiday Inn had the lowest number of bad experiences, while QVC and Best Buy had the highest. We also examined how consumers share their good and bad experiences, across age groups and income levels, and compared results from last year. This analysis uncovered a negative bias in how consumers give feedback. Motel 6, ING Direct, Albertsons, and RadioShack have the most negative bias in the feedback they get directly from customers; Cox Communications and Symantec have the most negative bias in feedback on Facebook; and Verizon and GE face the most negative bias on Twitter.

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The report has 20 graphics full of data on consumer behavior and company ratings. It starts by looking at the prevalence of bad experiences. It turns out that 20% of consumers have had a bad experience with a TV service provider while only 5% have had a bad experience with a grocery store.

One of the streams of analysis looks at how consumers give feedback. As you can see, companies are more likely to hear about bad experiences than good experiences.

Here are some of the other findings in the research:

• ING Direct (2%), Holiday Inn Express (2%) Whole Foods (3%) and Holiday Inn (3%) had the fewest occurrences of bad experience, while Best Buy (29%), QVC (29%), Gap (28%), and eBay (26%) had the most.
• After a bad experience consumers were most likely to completely stop spending with rental car agencies (40%), credit card issuers (39%), computer makers (35%), and auto dealers (35%), but least likely to stop spending with retailers (9%) and Internet service providers (10%).
• 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.
• Retailers (46%) most often recovered well from a bad experience while Internet service providers (15%) and health plans (15%) were the worst at recovering.
• 38% of consumers gave feedback directly to the company after a very bad experience, but only 31% gave feedback after a very good experience.
• 14% of consumers gave feedback on a rating site like Yelp after both a very good or a very bad experience.
• The use of twitter to communicate about a very bad experience has grown from 4% to 9% of consumers over the last year.
• 33% of 18- to 24-year-olds have posted about a good experience on Facebook, compared with only 5% of those who are 65 and older.
• 18% of 18- to 24-year-olds have tweeted about a good experience, compared with only about 1% of those who are 55 and older.
• 17% of consumers who earn $100K or more have tweeted about a bad experience, compared with only 7% of those who earn less than $50K.
• Given their customer demographics, Motel 6, ING Direct, Albertsons, and RadioShack are the most likely to receive direct customer feedback that is negatively biased while Cablevision, Avis, Nissan dealers, and Dodge dealers are the most likely to receive positively biased feedback.
• Given their customer demographics, Cox Communications, Symantec, ING Direct, and TracFone are the most likely to have negatively biased comments on Facebook, while Cablevision, AOL, Kaiser Permanente, and Holiday Inn are the most likely to have positively biased comments.
• Given their customer demographics, Verizon and GE are the most likely to have negatively biased comments on Twitter, while Avis and Edward Jones are most likely to have positively biased tweets.

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The bottom line: Customer feedback is an under utilized asset.

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.

Report: What Influences Consumer Purchases?

We just published a Temkin Group data snapshot, What Influences Consumer Purchases?

This study shows that social media has gained ground since last year, but is still not a top influencer. We surveyed 10,000 U.S. consumers to find out what information sources they use to purchase autos, cell phones, computers, credit cards, health plans, insurance policies, and televisions. The analysis looks at sources such as Facebook and Twitter, discussions with friends and employees, discussions with company employees, and information on various websites. Our analysis examines differences across age groups and analyzes changes over the last year.

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We start the analysis by examining the degree to which social sources—Facebook and Twitter, ratings and reviews websites, and discussions with friends and family— are influencing purchase decisions. The online social media sources remain relatively low on the list, but Facebook and Twitter gaining ground (as you can see below in figure 2 from the report).

The data is rich with insights into how consumers of all ages make purchase decisions. Here are some of the highlights:

• Autos: More than two-thirds of consumers rely on their discussions with employees at the dealership. While this source is one of the top two across age groups, it’s particularly important for consumers who are 45 and older.
• Cell phones: Last year as well as this year, interactions with employees are at the top of the list. This is becoming even more important for consumers younger than 35.
• Computers: Across all age groups, consumers rely more on discussions with store employees than on information from Facebook or Twitter users.
• Credit cards: On average, respondents use information on the credit card website more than they use any other source.
• Health plans: Across all age groups, the most used source of information is either discussions with health plan employees or information on the health plan websites.
• Insurance policies: Almost two-thirds of those surveyed said that discussing options with insurance agents is helpful. Agents are particularly influential for consumers who are 25 and older.
• Televisions: Fifty-six percent of respondents said that reviews and ratings on sites other than the retailer’s or the manufacturer’s are helpful. This is the most useful information source for consumers who are younger than 45.

This data snapshot contains the following 15 charts:

1. Social Influences on Purchases
2. Social Influences on Purchases, Changes Since 2011
3. Information Influences on Computer Purchases
4. Computer Purchases, Changes from 2011 to 2012
5. Information Influences on Cell Phone Purchases
6. Cell Phone Purchases, Changes from 2011 to 2012
7. Information Influences on Credit Card Decisions
8. Credit Card Decisions, Changes from 2011 to 2012
9. Information Influences on Insurance Purchases
10. Insurance Purchases, Changes from 2011 to 2012
11. Information Influences on Television Purchases
12. Television Purchases, Changes from 2011 to 2012
13. Information Influences on Health Plan Selections
14. Health Plan Selections, Changes from 2011 to 2012
15. Information Influences on Automobile Purchases

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The bottom line: Social media is not yet a key input to purchase decisions

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.

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(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

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(Includes the data)

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

VoC Shifts From Surveys To Analytics

In the recent Temkin Group report Prepare for Next Generation VoC Programs, we examined voice of the customer programs within large companies. It turns out that 72% of respondents think predictive analytics models and open-ended verbatims will be more important sources of customer insight over the next three years. Over that same time, only 30% believe that multiple choice survey questions will be more important and 19% expect them to be less important.

This shift is driving an increase in the use of analytics. As you can see below, there’s a large pipeline of companies who are actively considering text mining, predictive analytics, and speech analytics solutions. More companies are actively considering these technologies than currently using them.

The bottom line: VoC programs need to evolve

Report: Prepare for Next Generation VoC Programs

We just published a Temkin Group report, Prepare for Next Generation Voice of the Customer Programs. It examines the current state of VoC programs as well as identifying where these programs need to head. Here’s the executive summary:

Most voice of the customer (VoC) programs are underachieving, being weighed down by historical practices. The next wave of VoC programs will be based on more action-orientation, unstructured data sources, integration, and predictive modeling. We surveyed more than 200 large companies about their voice of the customer programs and compared the results from last year’s research. The typical VoC program has three to five full-time employees and does not measure the ROI of these efforts. Shifts in VoC programs include more use of text mining, predictive analytics, social media, customer interaction history, and mobile feedback while relying less on multiple-choice surveys. We examined six areas of competency for VoC programs: Detect, Disseminate, Diagnose, Discuss, Design, and Deploy. While companies have made the largest improvement in their Detect skills, this remains one of the lowest scoring areas. Using our VoC maturity model, we found that only 16% of companies have reached the two highest levels of maturity—Collaborators and Transformers—while 46% remain in the two lowest levels, Novices and Collectors. We also found that high-performing companies have more VoC employees, act more on feedback, and use more analytics. The report includes a self-assessment and data for benchmarking a company’s VoC competencies and maturity level. As VoC programs mature, companies will increasingly need to invest in Customer Insight and Action platforms.

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The report contains 27 figures with data on current VoC programs, our VoC competency and maturity assessment tool, results from companies that completed the VoC  assessment, listing of leading-edge VoC capabilities, and what to look for in a Customer Insight and Action platform. Here are some high-level results from our VoC assessments:

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The bottom line: Don’t settle for your current VoC program