The Buzz Insurance launch an innovative new customer loyalty program

Posted on July 28, 2010 by timwtyler

The Australian general insurance business has become a hot house of competition, with heavy promotion by new overseas online insurers.

Intense competition can be a catalyst for innovation and we believe that one insurer is innovating in a refreshing and effective way – by collaborating directly with customers.

The Buzz began life co-creating with customers. Through focus groups, market research and an online community / ideas exchange called ‘My Insurance Ideas’ the IAG-backed team shaped the company that became The Buzz. (Interest declared; we help The Buzz).

A consistent and dominant theme in these thousands of customer conversations was that insurance consumers are looking for an insurer who appreciates and recognises customer loyalty and customers want to be treated as an individual.

Given the ubiquity of no-claims bonuses in Australian car and home insurance,  and a belief by some  customers that Years of Insurance and multi product discounts are a pricing factor not necessarily about recognising individual needs , the insurance sector  are clearly not satisfying this desire. Unsatisfied customer needs offer an opportunity that The Buzz is determined to respond to.

As a formal response to this demand for recognition of customer loyalty reached the top of the task list, The Buzz asked existing customers what they liked and did not like about their other loyalty programs; ‘Simplicity and Fun’ was popular. But the stand out result was that 70% of customers responded with; ‘Give me more time to enjoy it” when asked what they would like most in their lives. Overwhelmingly customers did not want another card in their wallet and a high proportion felt that getting money back for not claiming was hypocritical as it was rewarding you for not using the product you had already bought. So the challenge was to come up with something with the customers that they would value.

Jacki Johnson, CEO at The Buzz, responded with a loyalty charter that says; implement a program that recognises customer loyalty with rewards that save time or make their time more enjoyable and safe. Give them gifts of time.

Buzz Time is the result.

The program concept is simple, as you renew your policies you receive points that can be redeemed for time-saving services from partner organisations such as Dial an Angel (home cleaning, gardening etc), Gizmo (PC and network set up & support etc), and Galmatic (driving and car maintenance courses). A range of novel merchandise and product options, real and online, fill out the reward choices available at program launch.

These rewards are a start, Buzz Time will next reach out to customers to ask and listen to determine what other rewards will appeal most to loyal customers. Co-creation is second nature in The Buzz.

To us, the strategic thinking underpinning Buzz Time is just as interesting as the points and time-saving rewards;

  • Program costs do not impact policy premiums which remain risk-based and competitive
  • No Claim bonuses are not required – The Buzz believes that claims are the reason for insurance and a service ‘moment of truth’ that may be the best customer loyalty creator. Loyalty should be recognised independently of claims.
  • Financial returns from Buzz Time investments will come from increasing customer lifetime value as higher rates of policy renewals result from giving customers an additional reason to stay with The Buzz when their renewal notice arrives.

We wish success for The Buzz – any company with such a laser focus on the needs and recognition of customers deserves to thrive.

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Continuous Process Improvement for Call Centers

Posted on July 25, 2010 by Stewart White
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Continuous Process Improvement for Call Centers

Continuous Process Improvement is associated to actions a business takes to continually re-evaluate and change any of its processes based on increasing efficiencies of the process, potentially reducing the associated costs and increasing its effectiveness.

A large number of businesses still work with the traditional model in regards to their processes, where they may not change or alter them until reactively needing to do so.

In contrast pro-active businesses are continually challenging current processes and changing them on a dynamic basis to increase effectiveness and efficiencies as well as reduce costs.

In many ways it’s like owning a car.

If you don’t maintain your car, at some point it’s going to break down and will need repairs. Most likely it will break down when you are in traffic, time poor, or unable to afford the repair bills.

However if you constantly maintain the vehicle (at your convenience and when financially able) then it will run smoothly (effectively and efficiently) until you decided to replace or retire it.

I’ve been fortunate enough to work within both models and it’s amazing to see the differences between the two.

One large company who had a procedure for handling customer calls, which had not been reviewed or altered for over 5 years was wondering why customer complaints were increasing and customer satisfaction levels were decreasing.

It became obvious as I worked through the assigned project with them that their stagnant approach was doing a disservice to the customer rather than actually servicing their needs.  A change of script, IVR flow, and some coaching for the CSR’s  saw an immediate increase in satisfaction results and a decrease in complaints.

When invited into the CEO’s office for a wrap of the project he was elated with the results and congratulated me on my efforts.

Rather than accept the thanks I politely asked him when he intended to review the process again?

His response is not really printable here but it was something along the lines of “well its just been done so it should be ok for a fair while now”, that was my cue to give him a quick reminder on the power of continuous improvement initiatives and the benefits it could have on his company.

Thankfully the CEO became a convert and now the Company is gradually turning away from being a reactive process improvement model to becoming a proactive model.

The increased sales and service results are beginning to talk for themselves!

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How to retain customers who are leaving

Posted on July 20, 2010 by Adam Ramshaw

Customers, just like products, tend to progress through a lifecycle, a customer lifecycle in this case.  If you manage this process properly then you will have a customer who continues to add value to your organisation.

But let’s face it, sometimes customers will still want to leave the organisation so in that case, the question becomes how do you retain customers who are leaving?

One effective way to do this is to create a Customer Save Team.  A Customer Save Team should become the focal point for your organisation when it comes to turning around customers who indicate they want to leave.

As such it should be the place that all customers are sent in order to perform the account close process.

The Save team has a number of tools in their customer toolkit that mean they are the best placed to prevent a customer from existing.

Those tools include:

Great product expertise

Save teams should be staffed by your best and most capable customer service staff.  That expertise is your first tool to retain customers.  If you use staff with the longest and most varied experience in the company, they will have the best depth of knowledge about how it operates and what is possible.

With that knowledge they have the very best chance of being able to give the customer what they want, when no-one else is sure.  They’ve been around the longest and know all of the unwritten organisational gems that might just mean the difference between the customer staying and going.

Save offers

If great company expertise is not able to keep the customer then the next step is Save Offers.

Save offers are pre-determined offers that are only available to the staff in the Save team.  They are a special set of offers that are made to customers who have asked to close their account, in an effort to change the customer’s decision.

When you construct your save offers you need to think in a strategic fashion, don’t just think about giving discounts.  Giving a discount will often keep the customer a little while longer but unless the offer changes the approach or extends a contract period all you are doing is delaying the customer attrition and reducing margin at the same time.

Make sure that you schedule formal and informal review sessions of the offers with question and answer sessions between the Save Team and other areas of the customer to uncover which scenarios are working and not working.  Identify how changing product features can be used to enhance the save process.

Ensure that you update and expand the rules as new approaches become possible and eliminate those that are not longer applicable.

You also need to ensure that the organisation validates the value of the Save Offer with the overall value of the customer.  You need to be sparing in which offer you make to which customer.  Customer value should be the basis for making that decision.

Move and follow programs

One of the specific offers you can create are Move and Follow programs.  If you really can’t save a customer because of a structural or geographic issue try to put them into a Move and Follow program.

Customers should be put into a Move and Follow program when they make changes in their life that mean that they do not need your product for a period of time.

Examples of when this happens include:

  • Car insurance customers who are selling their car
  • Bank mortgage customers who are selling their house
  • Telco customers who are moving residence.

Move and Follow programs focus on keeping in touch with customers during the time that they do not need your product or service in order to reconnect when they again have a need.

Don’t let them get to this stage

Of course the ultimate way to prevent a customer from leaving is to make sure they never want to leave.   To prevent customers getting into the Exiting phase of the relationship you should look at implementing a holistic individual customer strategy.

You should also ensure that you constantly improve your business.  A tool like Net Promoter Score (NPS) and transactional NPS can be a good way to do this.

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Ensuring Success For Your Next Call Centre Tender Evaluation

Posted on July 19, 2010 by Stewart White

Ensuring success in your next call centre tender evaluation is more than just using good project management techniques.

A few months ago a client called and asked for help.  They were going through the process of tendering for some new technology for their Contact Centre infrastructure.  They approached us for help because the project had come to a bit of a stalemate

The tender process had gone through the usual milestones and the business had already gone to market with a requirements document for new technology.

The client had received the tenders back from the various vendors, engaged the vendors in product presentations, and worked through site visits to see the product in operational mode.

On top of this the client had also compared the most favoured responses.

However the Project team were split 50/ 50 spilt on who should be awarded the business.

They could not decide on one preferred vendor and could therefore not make a recommendation to their Board for final approval of purchase.

I was tasked with reviewing their processes and documentation to ultimately help them decide on the most applicable tender for their business needs.

The process we adopted was to initially review their project plan and tender evaluation documentation as well as interview the project participants to see how they had come to their individual decisions during the tender process.

The client’s Project Plan was strong and had been used as a comprehensive tool.   However the evaluation process they had gone through was not as strong as needed.

The tender evaluation process had no specifically measured “like for like” measures in terms of the individual vendors’ technical systems capabilities and pricing structures.

On top of that when interviewing the project participants it became apparent that some had based their ultimate decision on quite emotive factors.

The strong competence of some the vendors sales representatives had been seen as a strong attribute on which to award the tender.

The actual capabilities of the technology and the best fit for their business had not necessarily been taken into consideration by some of the project team members.

A solution was easily deployed to resolve the client’s problem.

Firstly all of the tenders were revaluated using our proven Call Centre Tender Matrix Comparison Documentation.

Secondly the Pricing components were detailed in the comparison matrix in such a way that like for like were being compared.

Thirdly all participants and scored both the vendor presentations and the associated site inspections on specific criteria appropriate to the business needs which had been re-identified and passed back to the business for ranking.

As the newly defined results started filtering back from the project participants it quickly became clear who were the top two main contenders, and those tenders that didn’t meet the requirements.

When all of the documentation and comparisons had been finalised a formal comparison session was run.  This session had a predetermined outcome set against it: the group had to identify the most appropriate vendor and unanimously agree on a recommendation that could be passed to the board.

In the formal comparison session, the project participants quickly realised that the reworked evaluation matrix identified those areas of the clients’ business requirements that were not provided by some of the vendors, excluding them from further consideration.

The “like for like” pricing comparison quickly and easily identified “hidden” costs and “add on values”, that had not been acknowledged in their previous comparisons.

The revisiting and re-evaluation of the vendor presentations and site inspections via the ranking of specific attributes from each project participant also gave greater clarity as to which tender response was the best fit for the business.

As we went through theses exercises with the project participants they quickly became aware that my logic and the use of specific evaluation documentation quickly took the emotive components of tender evaluation out of the process and instead gave the project participants clear and factual data sets and information on which to base a decision.

All ended on an upbeat note with the project team making a unanimous, informed decision back to their board.

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Is this the wrong way to use social media as a service channel?

Posted on July 13, 2010 by Adam Ramshaw

It is clear that leading brands are using Twitter and other social media channels to deliver reactive service to their customers.

Probably the best known of these is BestBuy with their @twelpforce Twitter account.  Staff at the computer chain use their Twitter accounts to answer questions from customers all over the country.

http://business.twitter.com/twitter101/case_bestbuy

Less well known, outside Australia, is the use that Telstra are also making of Twitter to “reach out” to customers who voice concerns or issues with Telstra products via their personal Twitter accounts.

But are the hotels featured in this Wall Street Journal article (‘I Hate My Room,’ The Traveler Tweeted. Ka-Boom! An Upgrade!) taking things one step too far?  In summary, the story discusses how hotel chains are listening on Twitter to pick up service issues that their customer are having.  Then they are diving in to help resolve the customer’s problem.  Nothing wrong here.

It’s the next step that I start to wonder about.  It seems that the number of followers a person has on Twitter may be determining the sort of response that the hotel provides.  If you have a lot of followers then you seem more likely to get room upgrades and free cocktails.

This leaves me questioning two things:

Why are you training your most visible customers to complain?

Don’t get me wrong having an open ear to customer complaints is a great way to hear what is going wrong in your organisation and fix it.  However, if you start to train your customers that for every negative Tweet that they send they receive a positive reward then you’re going to breed an army of people complaining long and hard about every little thing, real and imagined.

And you know that the high volume “road warriors” are going to learn this faster than anyone.  It won’t be long before you’re spending all of your time running around giving everybody on Twitter, a room upgrade.  Which brings me to my second question:

Is this a zero sum game?

This seems to me like the start of a new zero sum game, similar to the one the airlines embarked on when they invented the Frequent Flyer program.  If you give everyone who complains a room upgrade, then pretty soon everyone is complaining and you have to give everyone a room upgrade, and so do all of your competitors.

Then you’re back to where you started because someone still has to get the room by the air conditioner.

I don’t think that the solution to this issue is to ignore the new service channel.  Using Twitter as a service input and customer resolution channel is a great idea and has worked really well for organisations that have embraced it.

Perhaps the issue is that organisations are focusing too much on surprise and delight in an effort to drive customer loyalty rather than the basics of just solving customer problems.  This new Harvard Business Review article (Stop Trying To Delight Your Customers) has a good take on the issue.  It shows new research that customer loyalty is driven more by solving customer problems quickly and accurately, rather than spending time trying to surprise and delight customers.

Of course, social media can be used in very productive ways to improve customer loyalty and generate real company value.  This social media training course provides a starting point for just that.

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Net Promoter Links to Recency-Frequency-Monetary (RFM)

Posted on July 9, 2010 by timwtyler

From the early days of data-driven marketing, it has been known that marketers can predict which customers are most likely to respond to an offer by ranking them on the basis of;

  • how Recently they have transacted with you
  • how Frequently they have transacted with you
  • how much money (Monetary) they have spent with you.

It is also well known that of the 3: RFM, Recency is the best predictor of future business. My favourite database marketing guru, Arthur Hughes says;

“Frequency is often a powerful predictor of response, but it is seldom as powerful as Recency. We can easily illustrate the differences by comparing the response rates of the same group of people based on their recency and their frequency.”

Read the discussion here: http://bit.ly/aMST2R

So the customers most likely to be positive towards your product or services, those most likely to respond to your next offer, are those customers who have transacted with you most recently.

Nothing new there, but it has occurred to us that as NPS® also predicts future sales we should expect a recency effect in transactional (bottom up) NPS scores.

I was reading a thread in the LinkedIn Net Promoter Community where Paul Sherland asks the question; “…do you notice a time dependency in the [NPS] responses? My impression is that loyalty fades if it’s not reinforced by new engagement with the brand.”

John Abraham of Satmetrix responds (July 6, 2010) with;

“Your question about recent engagement is an interesting one. I have not analyzed this within our benchmark, but I have seen companies using NPS present findings at our conferences that match what you describe. Charles Schwab and Bain & Company did a joint presentation at our conference in San Francisco in January 2009 which mentioned the same phenomenon. Higher scores immediately after a branch visit, and then a drop off with time until another interaction occurs.”

So on the surface NPS and Recency cross-foot.

There is a lesson here for bottom up NPS.

Bottom up (also called transactional) NPS involves asking the NPS question close to a ‘Moment of Service Truth’ so you can translate customer feedback into tactical process improvements. If the score you receive partly depends on when you ask, make sure you are consistent in your timing. Preferably ask the NPS question as close in time as possible to the service experience you are improving, consistently, or your results will be distorted by recency differences.

For more information on Net Promoter Score and how/why it works download our free Introduction to Net Promoter Score (NPS).

If you are thinking about implementing Net Promoter Score (NPS) in your organisation give us a call. We can help you to measure word of mouth through an effective Net Promoter Score program for your business.

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

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Automating Transaction Net Promoter Score Data Collection

Posted on July 6, 2010 by Adam Ramshaw

Implementing a system that will automate the data collection and reporting elements of a Transactional Net Promoter Score® (NPS) process is an important step in integrating this key measure into the business.

Without effective automation of the task, it can often become too difficult to maintain and can fall by the wayside.

What is a Transaction NPS survey?

The Net Promoter technology was first published in 2004 (see here for a free Net Promoter Score tutorial) and was initially developed as a Relationship metric for organisations.  On a regular basis (perhaps every year or six months) organisations could perform an NPS survey to collect data on their overall (Relationship NPS) score.

However, one of the issues that became apparent was that although NPS is closely correlated to revenue, the Relationship NPS was difficult to convert into action.  Just knowing that your score is X% or Y% is actually much less important than knowing how to move your score from X% to X+5%.

Transactional NPS was developed to measure the NPS of each customer transaction (or at least a sample of them) and gather information about what customers liked and disliked.  By applying Transactional NPS at key service Moments of Truth (MoT), the organisation can implement process changes to improve its NPS for both the Transaction and the Relationship.

See this recent post for more information on Transactional Net Promoter Score.

Automating Transactional Net Promoter Score

A key stumbling block for many organisations is the need to automate the transaction survey process.

The annual or semi-annual Relationship NPS survey does not have a high need to be automated.  The process can be well planned out in advance.  Reporting and analysis can be performed at the end of data collection in an orderly, known way.

On the other hand, executing a survey every time a customer service Moment of Truth occurs can easily mean sending tens, hundreds or even thousands of personalised customer surveys each day.  Each one is related to a different service transaction and needs to be reported and analysed in a specific but easy to action manner.

Automation Requirements Fall into 4 Areas

  1. Initiating a personalised survey in a timely manner after the customer has been through the Moment of Truth.  This requirement includes the need to create contact rules so that customers do not get over surveyed if they transact on a frequent basis.
  2. Reporting the feedback in a way that informs the client facing and management staff of the organisation.  The organisation must be able to distribute the information to a wide variety of staff on a timely basis.
  3. Reporting the feedback delivered in a way that allows easy analysis of the data and supports root cause analysis and hypothesis testing.
  4. Closing the loop to enable service recovery: one of the key advantages of Transactional NPS is the ability to initiate timely Service Recovery processes.  Any automation of the survey process must include a way for relevant company staff to be alerted dependant on the response that a customer provides.

Software Options for Automation

When examining the approaches for software automation of the Transaction NPS process there are really four options.

General Purpose Survey Tools

General purpose survey tools (e.g. Survey Monkey / Question Pro) provide quite good platforms for the automation of customer surveys.  Many have ways to customise the reporting pages for basic Net Promoter Score.

On the down side they often lack the types of specialised reporting and work flow engines (specifically service recovery initiation) required for a successful Transactional NPS systems.

In-House Development

The second route that organisations can undertake is to develop a survey system in-house.

The major “con” to this approach is heavy design, development and testing costs involved with creating the necessary infrastructure (email engine, data interfaces, reporting platform, service recovery automation, etc) for one company to use. There is also the ongoing cost of maintaining and updating the system as requirements change.

Dedicated Software Vendors

There are a new generation of dedicated NPS (Relationship and Transaction) survey software companies, e.g. CustomerGauge, that have been created to meet the market demand for NPS automation.  In general these companies provide a Software as a Service (Saas) approach, whereby the client accesses the software via the web, just like Gmail.

These purpose built applications provide all of the hooks and handles required for organisations to get up to speed quickly and effectively to deliver a Relationship or Transaction NPS process.

Often these applications also provide standard interfaces to well known CRM and web shopping cart applications.  This makes the data integration process quicker and simpler than other approaches.

Extension of the CRM System

The current level of sophistication in CRM systems means that organisations are often able to build on CRM system functionality to create an NPS process.  This is especially true of marketing automation vendors, e.g. Aprimo, where the software is designed to provide event based marketing functionality.

For more information on Net Promoter Score and how/why it works download our free Introduction to Net Promoter Score (NPS).

If you are thinking about implementing Net Promoter Score (NPS) in your organisation give us a call. We can help you to implement an effective Net Promoter Score customer needs survey program for your business.

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

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Are you using campaign lead or customer lead marketing?

Posted on July 4, 2010 by Adam Ramshaw

This week I’m going to build on a recent post (“Why customer segmentation is not customer strategy”) by looking at a new approach to creating a customer strategy.

We will start by examining how most marketing departments use customer segmentation.  Over the past 10-15 years an evolution, a good evolution mind you, has overtaken marketing organisations.  In that time there has been an increased focus on maximizing the return on marketing investment.

The Campaign Lead Approach

Through improved customer data and analytical software, organisations have constantly increased their campaign return on investment.  One of the tools that they have used to do this is customer segmentation.  A high level view of the overall marketing process and how customer segmentation fits is shown below.

Starting with the company’s business goals, organisations create marketing plans to meet those goals.  The marketing plans then take into account product opportunities, high level customer needs analysis and a range of other company specific attributes to create campaign ideas that are turned into campaigns.

The next stage of the process is critical in driving up campaign ROI: the campaigns are matched with customer segmentation data to find the customers that are most likely to respond to the campaign.  This matching process often uses past campaign/ customer segment performance as a guide in the matching process.

Lastly, the campaign is run.  The customer segmentation is used to extract a list of customers to whom the campaign will be sent.  The list is then passed through a range of customer exclusion rules.  These rules can be as simple as a “do not contact flag” or “never contact a customer more than once every 60 days”.  The final list is then merged with the campaign creative details (call script, direct mail piece, e-direct mail, etc) and sent to the customer.

This process can be used to deliver a campaign with a very high return on investment but it does have it’s problems.

  • The approach puts the campaign at the center of the process not the customer.  The approach is “We have a campaign now who can we send it to?”
  • Customers are not engaged in a conversation they are targeted with product sells and as one banking CEO said to me the other day: “Product pushing destroys customer relationships”
  • It seems that the same 20% of customers end up in almost all of the campaigns.  This is the 80/20 rule at work.  All of the A/B demographic customers seem to be dragged into all of the campaigns.
  • The organization focuses on creating high ROI campaigns but may miss opportunities with large portions of the customer base
  • Campaign results are tactical feedback in that the organisation can optimise the campaign but it may not be optimizing the value of the customer or business.

The customer strategy lead approach

A different, and I would say better, approach is to rather start with a customer strategy and work down from there.  That way you are optimising the value of the customer and business while also maximizing the campaign ROI.    Below is a customer strategy approach, the blue boxes are the changes from the original approach.

In contrast to the campaign led approach, the customer strategy lead approach is “We craft a customer journey unique to each customer and then deliver it to them over their lifetime with us, making sure to react to changes in their needs and activity.”

This is a completely different approach that builds trust and value in the customer relationship rather than destroying it.

  • Using this approach (a customer strategy and customer life-cycle approach), the customer is taken on a planned journey starting at the time they become a customer and take up their first product.
  • The campaigns/messages they receive are pre-planned and event based triggers.
  • At a campaign level, the result is a larger number of smaller, targeted campaigns offering higher ROI.
  • It is at the business level that the real value is found.  Using this approach you maximise the overall customer lifetime value.

It is true that in order to implement this approach you need a way to develop and assign a customer strategy to each customer.  In our experience a customer value map is the easiest and most direct route to creating a tool that can be used to assign a customer strategy to each and every customer.

If you would like to assess the areas where the best return-on-investment can be found, by targeting customers with the right current vs. potential value contact us about cpMAP: the customer value based cutomer strategy approach.

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New Net Promoter Score Benchmarks: Europe Vs Australia

Posted on June 28, 2010 by Adam Ramshaw

Satmetrix last week released its 2010 European Net Promoter® Scores and I thought it would be interesting to review them versus recent Australian data[1].

Banking

The highest of the European banks (First Direct) received an NPS of 42% compared with the highest of the Australian banks (Bendigo Bank) at +33%.  At the other end of the scale the lowest European score is -26% versus -39% in Australia.

Mobile Phone Networks

Moving on to look at mobile phone networks the best of the best in Australia (Virgin Mobile) scored 0% compared with the best in Europe (O2) of 24%.  At the other end of the scale Australia’s lowest score was -34% and Europe’s was only -13%.

Why the Differences?

Scores in Australia would, on the basis of these numbers, seem to be lower overall. Why?

Two potential reasons are:

Australian Service delivery is worse than European Service Delivery

Lower NPS scores in Australia may indicate that the very nature of Australian service is lower than that experienced by European customers.  There is no definitive way of determining if this is the case.

I know that there is a wealth of anecdotal evidence collected by travellers to both regions of the service levels in their counter parts but there is no convenient impartial way of collecting that data.

Australian’s have higher service expectations than Europeans

This is the second potential reason for the differences in scores and identifies a cultural bias in the outcomes of the Net Promoter Score process.  If Australian customers simply have higher expectations from customer service it would drive down the NPS for that region even if the service levels were the same.

Of the two suggestions, I am more inclined to believe that it is the second (higher service expectations) that is the driver for the difference in scores.  This may connected with the infamous Australian Tall Poppy Syndrome, whereby Australians are just a little less inclined to give maximum praise for a job well done.

Either way it reinforces the one of the tenants of NPS or any customer loyalty measurement system. The absolute score is not as important as the score relative to competitive peers and your own score in the past.  Focusing on understanding what is important for customers and how to improve your score day in day out, month in month out is the driver of long term success.

This result also underscores the critical role that customer service expectations have in determining customer satisfaction with the service delivered.  This recent post (Customer Charters: Good or Bad for Customer Satisfaction) discusses the issue of service expectations in more detail

For more information on Net Promoter Score and how/why it works download our free Introduction to Net Promoter Score (NPS).

If you are thinking about implementing Net Promoter Score (NPS) in your organisation give us a call.  We can help you to implement an effective Net Promoter Score program for your business.

[1] “The 2009 Consumer Recommendation & Loyalty Study”, Engaged MARKETING Pty Ltd

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

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The 10 major marketing themes in 2000: still relevant?

Posted on June 27, 2010 by timwtyler

Every now and then I like to go back and read past work from the giants of our craft, and Philip Kotler certainly qualifies as a good set of shoulders for us to stand on so we can see further. In 2000 Mr. Kotler published “Marketing Management, Millennium Edition” (2000, Prentice Hall) and given the occasion, he looked forward and predicted the issues that Marketing would be dealing with in the new century.

Almost a decade into the 2000′s, I can say I think he was correct. He may despair that we are still to resolve the issues, but he was correct in identifying the major tasks in what we have (un-poetically perhaps) called ‘do marketing’.

So with comments based on our client work, here are the Kotler 10 from 2000. How well do you think we have got these under control in the last 10 years?

  1. Relationship Marketing – the view that a single transaction is too narrow a definition of our relationship with a customer, and that we need to understand the value of our customers across multiple transactions and know which of them are most important to us overall. Our customers are getting better at this, understanding that there is not an infinite supply of new customers and retention deserves attention. This insight leads to the next of Kotler’s issues;
  2. Lifetime Value - measure the value of a customer over multiple transactions, in fact over the lifetime of their relationship with you. Many organisations still struggle with this. The need for quarterly results focuses the mind of many customers on what I call the ‘disembodied sale’, thinking that sales exist independently of customers that you want relationships with and whose value you can measure over time.
  3. Customer Share - as opposed to market share. Is there a market without customers?
  4. Target Marketing - sell to all of your chosen customers since selling to all customers is not realistic.
  5. Individualization - treat different customers differently. Don Peppers said this first I think, in 1993.
  6. Customer Databases – data about customers rather / in addition to data about sales. The enabler of modern marketing, most customers are working on this, some have it under control but they are in the minority.
  7. Integrated marketing communications - there are so many channels for customers to choose from, it is important to balance and integrate your usage to match theirs. We agree.
  8. Channels as partners - everyone who represents your product to customers is a partner, not a passive channel.
  9. Every employee a marketer - your brand is the sum total of all customer interactions. Net Promoter Score (NPS) is a new and useful tool to measure how well you are doing with customers and employees at achieving this virtuous circle of customer and employee advocacy.
  10. Model-based decision making - more commonly called data driven marketing. Our solid believe is that ‘you should not guess when you can know’.

What do you think, have we made progress?

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