Posts Tagged ‘Detractors’

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.

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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.

Net Promoter Score™ is an effective and efficient process to measure the health of your customer relationship. Used correctly, Net Promoter Score can be the driver of superior business performance.  But how is the other team doing?  What is the health of your competitors’ customer relationships?

Business is a very competitive “sport”. Like any pro sports team, businesses are constantly striving to find the competitive edge that will move the ball forward, put the puck in the net, or drop another basket. Pro sports teams have professional scouts checking on the competition throughout the season. They look for weaknesses in the competitive teams that can be exploited for the benefit of their own team. In business we don’t have scouts, but we do have processes like Net Promoter Score that can identify the strengths and weaknesses of the competition. This will help generate customer acquisition, improve retention, grow market share and drive bottom line profits. In short, Net Promoter Score can help you hit the ball out of the park. Just take a look at Apple, a company dedicated to Net Promoter Score that also hits a lot of home runs.

Using Net Promoter Score will identify how many of your customers are Promoters and how many are Detractors. But, do you know how many Promoters your competitor has? How likely are your competitor’s customers to recommend? What are the NPS® verbatim responses telling you about your competitor’s organization, structure and service delivery? Remember that your Detractors will tell you how to fix your business. Consider how much competitive intelligence you’ll get by listening to your competitor’s Detractors. You might just find that golden nugget of information that can turn the game in your favor.

Dig a little deeper into your competitor’s Net Promoter Score. Break it down by geography, demographics, or user segments. You may find that your competitor looks strong on the surface, but analyzing their Net Promoter Score could expose a weak underbelly that you can take advantage of.  Just imagine what you could do if you discovered that your key competitor has a very high number of Detractors on the west coast who are female, under the age of 35 years, single, university educated and hate  their current service provider’s customer service. Perhaps your competitor’s customers on the east coast are less likely to recommend the longer they use their product or service. With this kind of scouting information, you’d be able to call the play that drives right through the defensive line and scores a touchdown. You’d be the hero.

Gathering a competitive Net Promoter Score can be accomplished using telephone or online data collection methodologies. It’s all legal and above board and part of a good competitive intelligence program.  Finding the competitor’s customers might the toughest part of the project. Data collection companies can source customer contact information using a huge array of brokered lists and online panels, but working with a qualified data collection company is critical to ensure the data collected is valid and trustworthy. Do not depend on your own field team or sales force to provide competitive NPS information since you need data that is unbiased and unfiltered.

Still not convinced that you need to track your competitor’s Net Promoter Score? Well, what if they are tracking your score? What would they uncover by listening to your Detractors and how would they exploit this information?  Ever wonder how the competition comes up with that new product, unique service or killer application?  Maybe they did a little scouting on your customers and found a hole in your defense.

Remember! The best defense is a strong offense. Use Net Promoter Score as your strongest offensive strategy.

 

 

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.

I recently read on one of the Net Promoter® forums a posting that asked the question “Is my company big enough for an NPS® program?”. The Poster felt that his/her company was too small to benefit from implementing a Net Promoter program.

Although Satmetrix, in their Net Promoter ® Associate training (which I attended in May ’09) claims that nearly 700 of the Top 1000 Companies uses Net Promoter, this does not mean that smaller enterprises cannot benefit from the NPS process and discipline. In fact, NPS could be even more valuable to the smaller company.

In my previous posts, I discussed how NPS identifies the Promoters who become free extensions of a company’s marketing department, not to mention that they are the most profitable customers. So, why should this benefit be limited to only the large organizations like Apple, eBay and Harley Davidson? Small to Medium Enterprises (SMEs) all the way down to the individual Entrepreneur can implement and benefit from NPS. Every company, regardless of size, can use more profitable customers and no-cost marketers to promote their business. And all companies, regardless of size, need to understand the factors that create Detractors.

NPS is very scalable and affordable for the smaller organization. I’ve seen an NPS program implemented for a large North American financial institution as well as a program for a local independent financial advisor with only 300 clients. The basic tenets of NPS apply to both businesses. In other instances, I’ve seen an NPS program put in place for a small entrepreneurial heating and air conditioning service supplier as well as an independent construction crane contractor. Neither company had a large staff nor a long client list, but both CEOs took away some key insights that helped drive their business growth.

The two key issues that seem to be of concern for smaller companies are the costs associated with an NPS program and the internal resources required to manage the program and to analyze the results.

With smaller companies and shorter customer lists, costs are generally contained since the sample size is smaller. In the case of the financial advisor, 100 completed NPS questionnaires were gathered from a base of 300 clients. And since the NPS questionnaire is very short, the telephone data collection (used because of the sensitive nature of the client relationship) proved to be very affordable for the financial advisor. Costs would be even lower for an online survey using a qualified, client identified list. Yes, a larger sample size would improve the statistical significance of the data, but 100 completed interviews from a base of 300 will yield usable data.

Few small companies have a dedicated research department so they should lean on their Net Promoter® Loyalty Partner for the project management as well as the research analysis and reporting. This might cost a bit more, but could pay off in some very valuable insights. In the case of the large financial institution I mentioned, their large research department handled everything but data collection and data tables, while the financial advisor depended on the Net Promoter Partner for the project management, questionnaire construction, list management, data collection, data tables, analysis and final report. One such Net Promoter® Loyalty Partner that provides this type of comprehensive service is Consumer Contact Loyalty Monitor (www.loyaltymonitor.ca)

The frequency of data collection might need adjusting for a smaller company with a smaller client list. The NPS survey might be conducted quarterly instead of monthly, with the data aggregated into a rolling average. Less frequent surveying will also reduce the cost and the risk of over-researching a relatively small client base.

There is one advantage that SMEs have over the large companies when it comes to taking action based on NPS data. The agility of smaller companies allows them to identify the critical issues and swing into action mode very quickly and make any adjustments to the operations or organizational structure. Large organizations, in spite of their best intentions, still take a lot of effort to enact the changes indicated by the NPS data.

A Net Promoter Score™ program does require an effort and investment, but for the smaller enterprise it could prove to be one the best investments they could make to drive business growth and profit. You don’t have to be one of the Big Guys to benefit from NPS.

 

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.

If you’re a homeowner you probably understand the concept of spending to save money. You’re encouraged by many levels of government to invest in new energy efficient windows, furnaces and water heaters to save money on your monthly fuel bill. If you own a car, you can trade in your old clunker and invest in a new energy efficient hybrid to save on gas over the next five years. The overall message is to invest today to save money tomorrow.

The message for Net Promoter® is the same. Invest in an integrated Net Promoter program today to reduce your costs and save money down the road. I know we’re in a brutal recession and funds are scare, but investing to measure customer loyalty and save money is still a viable fiscal strategy. And, it delivers a very positive ROI. CFOs and accountants like positive ROIs.

So, let’s have a look at how Net Promoter can reduce your costs:

Promoters recommend. When they recommend, they help you acquire new customers at a very low acquisition cost. This reduces costs and makes your acquisition budget go further. As a bonus, referred customers (according to SatMetrix® research data) have fewer problems and complaints which reduces your administration costs. Another cost savings in the bag.

Promoters stay longer, use more of your product or services and they complain less. Over the long term, they generate more profit and cost less in maintenance costs. The acquisition costs can be amortized over a longer period, increasing the ROI on Promoters. This will make your accountant smile.

Promoters rarely take legal action (again, according to the SatMetrix® data). They like your company so why would they take you to court? Promoters are not likely to generate expensive lawsuits. This will make your legal department smile.

Promoters are a forgiving bunch and will overlook the minor transgressions that eventually befall all companies at some point. Promoters will forgive you when your company suffers a public embarrassment so that the need for an expensive Public Relations defensive smoke screen is lessened. Just don’t take them for granted. They will not forgive you forever.

Because Promoters are experienced customers, their demand curve is smoother and reduces the need for inventories to cover the peaks and valleys of unpredictable demand. Reduced inventories translate into reduced costs. This will make your CEO smile.

Finally, Promoters are nicer people to deal with. They like nearly everything about your company’s products and services so they treat your front line staff with respect and decency. Happy Promoters create happy employees. Happy employees are more productive employees and that means profits. This will make everyone in your company smile.

We’ve all heard that old chestnut. “You gotta’ spend money to make money”. Well, spending on a Net Promoter® program will make money and companies like Apple, ebay, Enterprise and Harley Davidson have proven that it works. They’re all smiling.

So, invest in a Net Promoter program and reduce your costs. It will bring a smile to your face.

 

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.