So, you have measured Net Promoter. It's taken time to launch globally, and now the results are out. What are some of the first questions you get from the CEO and regional teams? Do any of these sound familiar... "Is this a good score", "what about the competitors" and "what are the results for the other regions"?
As a seasoned researcher, it certainly does to me! And judging from the questions from the delegates after the Competitor and Cultural Benchmarking Session it seems that these questions are common in boardrooms around the globe.
The session conducted by James Young, Business Consulting Director for Satmetrix EMEA cautioned that there were a number of issues involved with answering these questions. Frustratingly, it seems that there aren't always easy answers!
Sitting in James' session reminds me that there are a lot of considerations when trying to benchmark NPS. These include cultural bias experienced in use of scales, robustness of sample and the industry in which you operate. James advises that caution needs to be exercised when sharing benchmarks with senior execs as a lot of times they want to build it into compensation schemes or targets without much thought for these considerations.
James shared some insight around research that Satmetrix recently conducted in the US. It appears that NPS scores differ greatly by industry and (surprise, surprise) the Telco industry tends to score lower NPS (circa 2%) than the financial services industry (circa 20%).
Also, when it comes to cultural bias (again looking at Satmetrix B2B research) customers in Latin America tend to score higher on NPS (average 35%) while the folks in APAC tend to be more reserved with their ratings (average NPS -10%). Getting hold of free country level NPS benchmarks is like gold dust so James shared some online resources that people might find useful.
- Neutralizing Cultural Response Bias on Customer Loyalty Surveys (Satmetrix whitepaper)
- "Net Promoter Scores Australia 2006", Melbourne Business School
- "The One Number You Need to Grow", Harvard Business Review, December 2003
- "Would You Recommend Us?", Business Week, January 30, 2006
- Marek, Sue, "On the Hot Seat: Verizon Wireless CEO Lowell McAdam" Fierce Wireless, October 30, 2007, retrieved December 23, 2007
- Reichheld, Fred. The Ultimate Question: Driving Good Profits and True Growth, Harvard Business School Press, 2006
- GE Letter to Stakeholders, 2005 Annual Report
- P&G Investor Day presentation, December 16, 2006
- Allianz Capital Markets Day presentation, July 13, 2006
When it comes to competitive benchmarking, James shared the basics of how this could be achieved.
- Ask competitor questions in your own survey. Upside this is probably the cheapest way to get benchmarks, downside there is likely to be a positive bias as these are your own customers (so no true market position)
- Primary data. Often research companies publish their own benchmarks based on the surveys they conduct. This is probably more expensive than option 1.
- Custom or syndicated panel of non customers. Upside: this probably the best indication of market position. Downside: probably more expensive than the other options
An important message communicated from the session was that while benchmarking plays an important part of an NPS programme, it really depends on where you are in the journey. If your business is just starting with NPS, it may be more productive to concentrate on moving the scores for your own organization first, then after your programme has matured for a year or two, begin to incorporate competitor and/or cultural benchmarks. This gives the business time to absorb and action customer feedback and for the customer NPS programme to be embedded in the DNA of an organization.
