Part 1: Leaping into the Net Promoter Domain
I am writing this blog on the plane ride home from the Net Promoter Conference in London. As I ponder the success stories I heard at the conference - stories from GE Real Estate, Aggreko, Philips, Groupe Neuf Cegetel, and other prominent firms - it occurs to me how critical Net Promoter has become for these businesses. Many attendees who were "on the fence" at the outset of the conference have jumped over to join the Net Promoter community. Success is contagious.
I'll give you a few examples. GE Real Estate has nearly doubled its revenue since implementing its Net Promoter program. The loan-processing giant attributes 25 percent of these revenue gains to Net Promoter - to the tune of $3.4 billion. Meanwhile, Net Promoter is helping broadband supplier Groupe Neuf Cegetel become a leader in member satisfaction by monitoring customer activity in its call centers. For LEGO Group, success with Net Promoter is all about business transformation and brand revitalization. FileNet (now IBM Enterprise Content Management) reported a 26 percent improvement in its Net Promoter score, accompanied by an increase in revenue from its existing customers. According to its case study, FileNet's sales from existing customers have jumped from 72 percent to 80 percent, yielding an increased net profit of 10 percent. In addition, Philips revealed how it is out-growing competitors in segments where Philips is the Net Promoter leader.
What do these companies have in common? They all credit Net Promoter for managing and improving customer experiences. Their employees understand the value of building a network of promoters. They know that having "net-positive" promoters is good in the same way as net profits: it's a currency that drives growth. Thus these companies measure success not only in monetary terms, but in the goodwill of their customers. Finally, they have a reliable metric to track their progress.
The companies who presented their stories in London realize the value of a reliable customer metric just as CFOs understand the value of business metrics like cash balances, days sales outstanding (DSO), and gross margins. These are tried-and-true financial metrics, just as Net Promoter is quickly becoming a tried and true customer metric. While skeptics insist that simple loyalty metrics can't possibly tell the whole story, these companies are proving them wrong. Balancing Net Profits against Net Promoters is the right way to maximize growth. The rewards are evident for those organizations that are willing to follow the Net Promoter journeyâ€”and really listen to customers along the way.
There is another reason why this is not just important, but essential. There is a huge cultural change happening between customers and businesses. Your customers are talking about you, and this time they have megaphones. Blogs, wikis, RSS feeds, podcasts, and other forms of social networking are growing in popularity, amplifying the voices of individual consumers and business partners. Frustrated letters to the CEO and phone calls to the support department are now being played out on You Tube. The suggestion box on the CEO's door is now being posted on the Web.
Do you know what your customers are saying, and are you interested in monitoring their feedback? These public expressions are influencing opinion whether you know it or not. Facebook claims 90 percent of the student population in the U.S., which represents an increasingly affluent purchasing demographic. MySpace has 57 million members from all walks of life. People think twice when they see a 2-star score on eBay or Amazon.
As Richard Owen, CEO of Satmetrix, the co-developer of Net Promoter, stated during his opening presentation in London, what's at stake here is nothing less than the reinvention of marketing. I found it prophetic that New York Times columnist Thomas Friedman wrote about this topic the same day of Richard's talk. As he put it, we're all public figures now. The blogosphere has made the global discussion so much richer - and each of us so much more transparent. He was referring to public figures when he made that statement, but the same phenomenon applies to companies. Whether you're selling cars or newspapers, Friedman reported, it's essential to get your "hows" right: how you build trust, how you collaborate, how you lead, and how you say you're sorry.
Companies that embrace customer experience will be rewarded with a loyal group of promoters who do free advertising, just like Apple has been rewarded by its loyal group of iPod customers. Those who do not embrace customer experience will be forgotten. (Which company first released an MP3 player anyway?)
Net Promoter helps you get your arms around customer experience, in the same way Net Profit focuses your company on profitability. Are you still on the fence? If so it's time to make the leap.