Posts Tagged ‘consumer loyalty’

Would your employees recommend your company as a place to work? Would they recommend you as a person to work for?

Net Promoter Score® is an effective and efficient method to use to check the health of the customer relationship. But, don’t forget the health of the employee relationship. Employee loyalty is just as critical as customer loyalty.

At the recent Net Promoter conference, Fred Reichheld, the creator of the Net Promoter Score® practice reminded us how important it is to include employees in the feedback process and not to separate employee engagement from customer engagement. To read a summary of Reichheld’s thoughts, as presented by Destination CRM, click here.

Reichheld makes that point that engaged, loyal customers create engaged and loyal customers. We have all had the experience of being served by a miserable customer service agent and how that can ruin your day. On the other hand, being served by someone who is happy in their job and committed to providing excellent customer service makes all the difference in the world. Guess which one is going to create a loyal customer?

So, why don’t companies make more use of NPS® to measure employee loyalty and engagement? Perhaps they don’t feel the need, or they may not want to know the answers.  But, according the Reichheld, it is as easy as asking just two questions:  “How likely are you to recommend this company as a place to work?” and “How likely are you to recommend your team leader as a person to work for?”

Measure the health of your employee relationship and you’ll have an insight into the health of your customer relationship.

Keith Chapin is a Certified Net Promoter® Associate and Consultant with over 35 years of experience in research, marketing and customer insights. He can be reached at kchapin@promotersrecommend.com

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

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One of the basic concepts of Net Promoter Score® is the idea of Good Profits and Bad Profits. Here’s a quick description :

Bad Profits

Customer feels misled, mistreated, ignored, or coerced.

They may actually dissuade new customers from using the product or service.

Good Profits

Customer feels appreciated and have been treated fairly, or the product exceeds their expectations.

They repurchase and tell their friends, family and colleagues.

Unfortunately, many companies opt for the short term benefits of Bad Profits. If you’ve ever been stuck in a 3 year wireless contract with a company you hate then you know what Bad Profits  are. Personally, I’m doing battle with my auto insurance company who, after  a 41 year relationship, treats me with less respect than they would a new customer. But more about that later.

On the other hand there are companies who really understand Good Profits and are willing to invest profits in order to develop a positive long-term customer relationship – one that results in a loyal customer who recommends. Here are two brief stories about my own recent experiences with Good Profit companies:

Story #1 –New Balance Shoe Store (Bayview Mall, Toronto)

I have fussy feet so I am very fussy about my shoes. The staff in this store really understands shoes and what it means to have a good pair that fit well. I recently purchased a premium priced pair of casual shoes at the store. After wearing them about 5 or 6 times, the leather stretched and the shoes did not fit as well as they did when they were new. On a whim, I took them back to the store with the hope that I might be able to return them and negotiate a discount on a new pair. I knew that I was going back after their “no-hassle” return period, but I figured that I had nothing to lose by trying. I was expecting to meet some resistance from the store staff and I was prepared to haggle on the price of a pair of new shoes. To make a long story short, I was extremely pleased when the store manager, David, offer me a full exchange for a new pair. All I had to pay was the price difference between the two pairs of shoes. He did not have to do this, but he took it upon himself to exchange the shoes for me. What did it cost him? The price of a pair of shoes, $150. What did he get in return? A loyal customer who has freely recommended the store to friends, family and co-workers.  Is a loyal customer worth $150?

Story #2 – Porter Airlines, Toronto

Porter Airlines is a small carrier that flies out of Toronto’s downtown airport. They have gained a well-deserved reputation for customer service excellence and they did not disappoint me.  Last month, I booked two return tickets to New York. The very next day I saw an ad for Porter Airlines offering a 30% discount on flights to New York. I immediately contacted Porter and spoke to one of the agents. I said I saw the ad and asked if I could get a price adjustment on my tickets since I had booked them just the day before. I was prepared for a fight on this one, but after confirming my booking, the agent cheerfully gave me a credit for the difference that could be used on a future flight. I was pleasantly surprised at the ease of which I got the credit/refund. No hassle and no arguments. They seem to appreciate my business and wanted me as a customer. Again, what did it cost them? Less than $130. What did they gain? A loyal customer who recommends and that’s worth much more than $130.

In both cases, companies that focused on short term profits would have tried to push me aside. New Balance would have been correct to say that the return period had expired. Porter could have easily held firm on the price I originally paid for the tickets. But, in both cases, the company representatives were well trained and were empowered to handle the situation. These companies understand the value of investing in the customer experience to create a loyal customer. It would be very interesting to see the Net Promoter Score® for these two companies. I suspect their NPS® is very high.

Now, if I could only get my insurance company to see the light.

If you’re like me, your wallet (or purse) is crammed with so-called loyalty cards. They come from grocery stores, pharmacies, gas stations and even credit card companies themselves. But, are they really loyalty cards or are they just rewarding frequent purchases? Are they effective?

Do these cards increase purchase frequency? In my case they do. I will buy my gas at the same station every week because it offers Air Miles.

Do these cards drive product preference? Yes, because I try to use only my MasterCard credit card because, again, I can accumulate more Air Miles.

Do these cards result in brand switching? Yes, because I will select a brand (within my substitutable set of brands or commodity products) if there are reward points associated with the purchase.

So, the cards can influence purchase behaviors, which is good for marketers, but do they drive loyalty? Do the cards create Promoters. My response is emphatically NO!

Loyalty is based on an emotional attachment for a product or brand. To paraphrase Fred Reichheld, author of The Ultimate Question, “Have I been treated in a way that is worthy of my loyalty?”. If I have been treated well, received good value, had my expectations exceeded and developed an emotional attachment to the product or service, then I have become a loyal customer and will  recommend a product or service.

Plastic cards are no guarantee that I will be treated well or fairly. They do not create those intangible “warm and fuzzy” feelings that signify loyalty. My use of these cards is a very rational decision, and nothing to do with loyalty. For example, I shopped at a local grocery store for years to amass more Air Miles. On the surface, the retailer would see me as a loyal customer who shopped there on a regular basis and spent lots of money. In fact, I hated the store and shopped there only because it was conveniently located, open 24 hours and offered Air Miles. As soon as a better store open closer to my home, I was gone even though the new store did not offer reward points. I became a former customer overnight because I had a better option. Had I been a loyal customer, they would still have my business.

On the other hand, I have owned 12 Toyotas since 1976. They don’t offer reward points but I have developed a deep emotional attachment with the brand and that has overcome all the disappointments that the brand has experienced in the past year or so. I don’t need a plastic card to give them my business provided they continue to treat me fairly, offer good value and exceed my expectations. I just feel good about the brand.

Those little plastic cards can influence purchase decisions. They can provide incentives to change behaviors. But call them what they really are – reward cards not loyalty cards.

My loyalty is not for sale.

Keith Chapin is a Certified Net Promoter® Associate and Consultant with over 35 years of experience in research, marketing and customer insights. He can be reached at kchapin@promotersrecommend.com

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

What happens when your expectations are not met? How do feel when a product or service doesn’t live up to the marketing or sales hype? Are you likely to recommend a product that fell short of your expectations?

So much of the “word of mouth” recommendation cycle is based on products or services meeting or exceeding personal expectations. Meet my expectations or just give me what I want, and I may or may not recommend your product. I have become a Passive, in Net Promoter® terms.

However, if you exceed my expectations, give me something that I didn’t expect and make me feel that you value me as a customer, then I will sing your praises to all my friends and family. You’ve made me a Promoter.

Fail to live up to my expectations and I will quickly become a Detractor. I will feel disappointed, cheated and even angry if your product or service doesn’t meet my standards. I won’t be buying a second time and I certainly won’t give you a recommendation. In fact, I may even warn my friends to stay away from whatever it is you have to offer.

So, why are expectations so hard to meet? Too often, the marketing communications and sales team create level of expectations that the product can’t deliver or staff can’t fulfill. Brand positioning, brand image and brand promise are the creations of fertile marketing and advertising minds. I know because I’ve created these statements myself. The sales department offers prices, deal, product performances and deliveries that operations cannot meet. I know because I’ve managed these sales departments.

Let me give you a few examples from my recent trip to Orlando, Florida.

I booked a rental mini van for the week using Hertz. When I booked online, my expectation was to drive a KIA Sorrento van. I actually got a new Toyota Sienna van instead. This widely exceeded my expectations so I would certainly recommend Hertz.

I visited the new Wizardy World of Harry Potter at Universal Studios. I’m not a devotee of Harry Potter, but I was very impressed with the experience, level of construction detail and the Harry Potter ride. It was more than I expected, so I would definitely recommend it.

I had lunch at the Mythos restaurant in Universal Studios. It had a large sign over the door declaring that it was voted the best theme park restaurant in the world, six years in a row. My expectations were very high when my meal was brought to the table. Unfortunately, the meal was mediocre and tepid so I sent it back to the kitchen. Anywhere else, I might just have eaten the meal without a second thought. But I was expecting so much more based on the sign over the door. I would probably not recommend this restaurant to a friend.

Disney not is infallible either. I saw the Cirque de Soleil show for the second time in 8 years. It was the same show I remembered from years ago, but I still enjoyed it, so I would recommend it. However, a dinner at the park’s Wolfgang Pucks Fine Dining Room was very disappointing. Based on Puck’s world-wide reputation, I was expecting a unique dining experience. Instead, I got another mediocre meal at a premium price in a bland environment prepared by an indifferent kitchen staff. I would definitely not recommend this establishment. Turned out that the Puck gastronomical mystique was just that…mystique.

During this trip, I stayed at the Sheraton Vistana Village resort. It was recommended by a friend and it did not disappoint. The facilities were great and the staff seemed to be very customer-centric. They made me feel that they were genuinely glad I was there. My expectations were exceeded so I would recommend this resort.

You probably have many of your experiences, but it is obvious to me that Detractors are created when there is a gap between what you expected and what you experienced. And this is where Marketing and Sales must use caution and common sense. Use marketing and sales skills to acquire new customers but don’t over promise so as to create Detractors. Don’t inadvertently create an Expectation Gap that can harm the customer relationship.

There is an old saying in sales that still holds true – “Under-promise and over-deliver”.  We’re all in the business of creating Promoters not Detractors.

 

Keith Chapin is a Certified Net Promoter® Associate and Consultant with over 35 years of experience in research, marketing and customer insights. He can be reached at kchapin@promotersrecommend.com

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

Although the Net Promoter Score® process is a simple and effective way to measure and track customer loyalty, we should not fall into the trap of oversimplifying the drivers of loyalty. For every product or service there is a series of steps, interactions, and opportunities to create or destroy customer loyalty. Each of these steps or interactions can make or break the health of the customer relationship. Fred Reichheld, in his book The Ultimate Question, refers to this linear series of steps or interactions as the Customer Corridor. Just like in any journey, one misstep can have a disastrous impact on loyalty. Let me explain by relating my own, recent experience.

I finally made the plunge and purchased a large, flat screen HD TV. But what is an HD TV without the digital HD signal? That’s when I began my journey down the Customer Corridor of my local cable provider. I’ll not name the provider directly, so I’ll give them a pseudonym. I’ll call them Dodgers to protect myself from any possible legal action.

As a long time customer of Dodgers wireless and cable services, I often receive their marketing materials regarding their Hi Def cable service. As the first step on the Customer Corridor, the materials made a favorable impression. In fact, when my son purchased his HD TV, I recommended Dodgers to him. So, it was not surprising that I chose Dodgers as my supplier of the HD digital signal.

It was all down hill from that point.

With my new shiny HD TV set up and hungry for a Hi Def signal, I set out on the next step in the Customer Corridor and scampered off to my closest Dodgers retail outlet to pick up a rental HD Digital cable box. “Sorry,” they told me at that store, “Our systems are down and you’ll have to go to the Dodgers Plus store if you want to rent the cable box.” Slightly miffed, but still anxious to obtain my own HD TV experience, I set out on the next step of the Corridor and plodded off to the Dodgers Plus store.

After a twenty minute drive, I finally found the store and bounded in with all the energy of a playful puppy. Things were looking up as I spotted the in-store kiosk which I assumed was the spot to register for HD TV service. After waiting 10 minutes without being served, a Dodgers employee casually enlightened me to the fact that I was waiting in the wrong area, and had to proceed to the next Corridor step, the waiting line. I was now the sixth, non-smiling person in the line. This step in the Customer Corridor was not moving very far, very fast.

With all the patient of a three-year-old with a full bladder, I finally reached the front of the line and asked Rosie how to sign up for HD service. Maybe it was just me sliding into a foul mood, but Rosie seemed to rattle off the requirements for HD TV in mere milliseconds. I could only hope that my new TV had a refresh rate as fast as Rosie’s sales pitch. I nodded something akin to acceptance which prompted Rosie to hustle off to the pack room. She quickly (good for her sake) returned with a bag full of electronic gear. She thrust the bag toward me and told me this was all I needed and the instructions where in the bag. I asked if the service was “plug and play” and if I needed to do anything else to get the service started. “Nope,” she replied “I’ve initiated the service from here. Next customer please.” So, with bag in hand, and very little information in my brain, I headed home to the next step in the Corridor.

I returned home with heightened expectations. Now I had the HD signal within my grasp. Of course, you can guess how the next Corridor step unfolded. I plugged in all the cords, deciphered the instruction manual as best I could, turned on all the buttons and waited for the Glorious High Definition Picture! Actually, I repeated this step fours times before I reluctantly made the “I’m so stupid, I can’t get this #%$!&* thing to work” call the Dodgers customer service.

The Dodgers IVR assured me that they valued my business and the wait in the customer service queue would not be too long. I doggedly held on, listening to the marketing pitches, so I would not lose my place in the queue. I spent my time scanning the manual to see if I had missed a step. I was about to take the back off the cable box with my teeth when the Dodgers customer care agent clicked in. After the normal interrogation about my name, number, birth date and shoe size, I was allowed to explain my situation. With a condescending tone, the agent advised me that the cable box needed to be initiated to get the signal (despite Rosie’s claim it was ready to go). When this didn’t work, we tried twice more before the agent decided that the problem needed to be punted over the wall to Technical Services. On to the next step in the Corridor.

The technical service agent interrogated me about my name, number, birth date and shoe size, and then I was allowed to explain my situation. His attempts to get the signal to my TV were futile and he decided that I needed a visit from an in-home service technician. I have to admit that I lost my cool when he told me it would be at least five days before someone could come to the house to resolve my issue. “Not good enough”, I exclaimed “I want it and I want it now”. He seemed genuinely taken aback by my response. His only other remedy was to return the cable box and exchange it for another. He was guessing the box might be at fault. His suggestion got me off the line and out of the house.

So back I went to the Dodgers store. To be honest, the store staff was very efficient in replacing the cable box. Very few questions asked. I could only surmise they had done this before, many times before.

Would it be a surprise to say that Cable Box #2 didn’t resolve the issue? Didn’t think so. Back to customer care, back to the interrogation and onward to Technical Service. However, this time, I was told that a technician could be at my house the very next day to fix my problems. Since it was now dinner time, and I had already lost a day of Hi Def viewing, I jumped at the offer and booked the service tech for 11:00 am to 2:00 pm the next day. So began the next steps in this journey.

The service technician arrived the next day at 12:30 pm, well within the scheduled arrival window. A good start and hopefully a sign of things to come, I thought. Wrong again.

After checking the outside cable, which was nearly 30 years old, he determined that the cable could not carry the digital signal. This would have been really good to know when I initially picked up the cable box. I cannot be the only one in the city in this situation.

The tech then proceeded to pull a new cable from the underground cable vault, across my neighbor’s driveway, up a lamppost, through two trees, around my downspout, around my house, through a new hole in the wall and, finally, to my new virginal HD TV. Voila! I had HD TV! But, it was too soon to get excited.

After some checking, the tech determined that cable box #2 did not show an IP address. It seems this is needed if I ever wanted to order Dodgers- On- Demand. So, back down the Corridor and back to the store I went for a third cable box.

I’ll give the store staff full credit. They did not run and hide when I entered the store, perhaps because I was on a first name basis with most of them. The young fellow who had serviced me the previous day greeted me with “What; you again?” Sympathetic to my plight, he found me a brand new cable box (based on the manufactured date) and assured me that the cable box would not be the cause of any further problems.

He was right. Cable box #3 delivered the picture I have been dreaming of and it had an IP address. It was time to relax with a mildly alcoholic beverage of my choice and enjoy the HD shows. Or, at least until my neighbor started banging on my door.

It seems that the service technician, in his haste, had left the new cable draped across my neighbour’s driveway. She was very concerned, and quite rightly so, that the exposed cable would be a dangerous tripping hazard. I was concerned that the cable might get broken or cut and then I would lose my coveted signal. I had to act fast.

Back I went to customer care, who sent me to technical services who sent me to facilities scheduling. Yes, they agreed the cable represented a danger and they would send someone out to fix the problem. They gave me a case number to refer to but no specific time when the cable would be secured. My neighour also called Dodgers to complain. I guess she did not have my tact for handling these types of situations. She was told that if she didn’t like the way it was being handled she could call the president of Dodgers directly. She has yet to make that call but the conversation is being shared with most of the neighborhood.

Several days passed and there was no sign of a Dodgers technician willing to secure the cable. My neighbor was getting testy so I grabbed my box of tools and spent 30 minutes of my own time to secure the cable. This calmed down my neighbor and made sure that my HD signal would not leave me any time soon. I wonder how I can bill Dodgers for my time.

As I mentioned at the onset, the Customer Corridor offers many steps to impact the customer experience, leading to a likelihood of recommending. In my case, I would recommend Dodgers based on their marketing materials, a certain retail staff member and the final HD TV picture. I would definitely not recommend Dodgers based on the ability of customer care and technical services to resolve an issue over the phone. I would recommend Dodgers based on the in-home technician’s ability to identify the cause of my problem, but would definitely not recommend based on the sloppy work of the same technician.

Overall, the combined steps along the Corridor resulted in a Detractor not a Promoter. Analyzing the Customer Corridor will highlight what your company does well, but will also point out the specific interactions or transactions that may have a negative impact on the customer experience.

Loyalty is not the result of a single experience, but the accumulated impact of many steps in the walk along the Customer Corridor.

Are there any bumps or potholes along your company’s Customer Corridor? Take a walk and find out.

Keith Chapin is a Certified Net Promoter® Associate and Consultant with over 35 years of experience in research, marketing and customer insights. He can be reached at kchapin@promotersrecommend.com

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

If you read my earlier blogs, you’ll know that I have been a devoted and loyal Toyota owner since 1976. In the past, I’ve recommended Toyotas to anyone within hearing distance. The cars have been dependable, reliable and, in spite of ongoing price creep, a good value in cars.

But now what do I do? With all the recalls for Toyota products, do I continue to recommend freely, or do I qualify my recommendation? Would anybody even believe my recommendation? Have I suddenly become a Passive?

To make matters worse, the lease on my 2006 Camry ends in April 2010. I’ve been shopping the Toyota dealerships looking for a replacement, but every model I considered has been recalled. I even test drove the Prius hybrid and was seriously considering leasing the new 2010 model. Then, surprise surprise, the Prius seemed to develop software issues with the brakes. How discouraging!

This is really testing the limits of my Net Promoter instincts. Promoters, by definition, are tolerant of missteps by manufacturers to whom they are loyal. They give manufactures a lot of latitude and expect (or pray) that defects are anomalies that will be resolved and fixed. As a long time Toyota owner, that’s what I’m doing.

A report by Reuters indicates that Toyota Canada has ramped up its advertising spending, but the ads are aimed at its existing customers, rather than at new ones. A company spokesperson says that the future is in the hands of customers driving the cars today, not some potential customers. Toyota seems to understand the importance of their Promoters and wants to keep them that way. OK, Mr. Toyoda, I’m waiting to be convinced that all is good in Toyota Land. I’ve got to get a new car and soon. As a Promoter, I’ll give you my business, but you’ve got to give me back my peace of mind.

In the meantime, I’m going to check out the new Hyundai Tucson. Maybe even take it for a test drive. I don’t think I’m going to like this one bit!

 

Keith Chapin is a Certified Net Promoter® Associate and Consultant with over 35 years of experience in research, marketing and customer insights. He can be reached at kchapin@promotersrecommend.com

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

Net Promoter™ is the internationally recognized tool that measures the dimensions of loyalty. By asking the simple question, “How likely are you to recommend my company (product, service or brand)?” customer loyalty can be effectively measured and tracked. But loyalty is not a simple concept. Loyalty has many dimensions that involve both the rational (the head) and the emotional (the heart).

The rational dimension of loyalty uses the head in a very logical evaluation of the product or service. Did it have the features I wanted? Did I get the best service? Was it the best price? If all this results in positive answers, then you were probably satisfied with the product or service. It met your expectations and maybe even exceeded them. You were satisfied, but were you loyal?

Satisfaction has a lot to do with initial expectations. I like to use the example of the new owner of a Kia 4 door sedan and the proud new owner of the BMW 335i sedan. After six months a headlight fails and forces both owners back to the dealership for servicing. The Kia owner may be happy that nothing else has gone wrong with this low-cost, entry-level car. However, the BMW is furious that his $60,000 pride and joy is in the shop for something as simple as a headlight. The Kia owner is still very satisfied with the purchase, mainly because expectations were low to begin with. The BMW owner was expecting perfection and is less than pleased that the headlight failed. The Kia owner has a higher level of satisfaction than the BMW owner, based on initial expectations. Who is likely to be more loyal, the owner whose low expectations were exceeded, or the owner whose high expectations were unmet?

The emotional dimension of loyalty engages the heart. Loyalty will be earned when a personal relationship develops between the product or service and the customer. The heart asks the questions: Do they know me? Do they value me as a client? Do they listen to me? Do they share my values? Only when the emotional combines with the rational does true loyalty happen.

Think about the last time you recommended a product or service. How did you feel when asked to make a recommendation? How did you feel when your recommendation was followed? Did you feel good when everything worked out? When you are loyal and recommend a product, you’re really sticking your neck out so you better totally engaged before you do it.

I am a long time Toyota owner and promoter (I’ve owned eleven Toyotas over the years) and I never hesitate to recommend the brand. It feels great when someone follows my recommendation and they become a happy Toyota owner. Needless to say, there are a lot of Toyotas in my neighbors’ driveways. I am very emotionally engaged with the brand.

Promoters, by definition, are emotionally engaged with the product or service they recommend. Passives, however, are not emotionally engaged. Their rational, logical mind may tell them that they are somewhat satisfied, but their heart has not yet created an emotional bond. Passives may not recommend nor stay with the brand. Detractors, on the other hand, may use rationality and emotion for NOT recommending (did not meet my expectations and I do not feel good about recommending).

If you are a quantitative researcher who lives for the numbers, you might be uncomfortable with the simplicity of Net Promoter Score and the short questionnaire used to collect the data. If you are the accountant- type manager who needs massive amounts of data to make business decisions, you may question the wisdom of using a single number to enable organizational change. However, if you are the researcher or manager who understands the complex interactions of the head and heart, you will see Net Promoter Score® as an effective tool to create a customer-centric focus within the organization.

The head and heart work in mysterious ways.

 

 

Keith Chapin is a Certified Net Promoter® Associate and Consultant with over 35 years of experience in research, marketing and customer insights. He can be reached at kchapin@promotersrecommend.com

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