ACCELERATING PROFITABLE GROWTH THROUGH SUPERIOR CUSTOMER ... _Accelerating_Profitable... ·...
Transcript of ACCELERATING PROFITABLE GROWTH THROUGH SUPERIOR CUSTOMER ... _Accelerating_Profitable... ·...
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ACCELERATING PROFITABLE GROWTH THROUGH SUPERIOR CUSTOMER LOYALTY (AND REDUCED CHURN)
Bain & Company, Fred Reichheld
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Worthy of Loyalty?
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Loyalty Leaders: Grow 2.6X competitor avg.
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Four Loyalty Behaviors Drive Growth
Repurchase
Buy additional lines
Referrals
Feedback
1
2
3
4
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Loyalty-leaders have not slipped into mediocrity
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The secret for building loyal relationships?
“Practicing the Golden Rule is integral to everything we do. As it happens, the natural result of ‘Golden Rule behavior’ is customer loyalty and employee retention.”
Colleen Barrett December 4, 2002 Southwest
Airlines
“What’s the key to our success? It all boils down to following the Golden Rule.”
Isadore Sharp June 25, 2003
Four Seasons
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Bad profit flouts the Golden Rule, alienates customers and demotivates employees
• Hotel: landlines 200x market rates
• Cellular: abusive roaming charges
• Rental Car: Gasoline refill @ 3X retail price
• Airlines: Change fees
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25% less pepper at the same price
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Who is to blame?
Tools for managing Profit
Tools for managing Loyalty
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“The only way to grow a business is to get customers to come back for more and tell their friends.”
“Hold on Fred—we like our survey…..”
Andy Taylor, CEO Enterprise Rent-A-Car
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Balance of power
Net profit Net grrrrowth
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Closing the Loop: by local supervisor
Supervisor Customer
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Weekly Team Huddle
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J.D. Power 2013 North American Rental Car Satisfaction Study
JDPower.com Power Circle Ratings
for consumers:
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The Elements of the System
• Reliable Metric (rank-ordering branches) • Closed Loop • Shrink Bad Profits • Know Economics (value of promoter) • Huddle (Voice/Vote)
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Net Promoter
How likely is it you would recommend us to a friend?
Not at all likely
10 9 8 7 6 5 4 3 2 1 0
% % NPS =
Extremely likely
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Why intent to recommend is such an important signal?
• Best features
• Best service
• Best price
Head
• They know me
• They value me
• They listen to me
• They share my values
Heart
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CEO Bayer: “I take recommendations very seriously”
Dr. Marijn Dekkers
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Now: Net Promoter® Adopted by Thousands
Then
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Net Promoter® Adoption
100%
75
50
25
0
2004 2012 …2020 2006 2013
>50% Net Promoter Score Adoption
<5% Net Promoter System Adoption
Today
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Net Promoter System: 4 Core Principles
1. Categorize promoter/passive/detractor systematically
2. Close loop with all detractors (sample of passives/promoters)
3. F.R.E.D. a top leadership priority (eliminate bad profits)
4. Front line huddles motivated to delight customers
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Jeff Immelt: CEO General Electric; Chairperson of President’s Council on Jobs and Competitiveness
“This is the best customer relationship metric I’ve seen”
January, 2004
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Michael Diekmann: CEO Allianz
“The Net Promoter System...has made us a better company.”
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NPS Can Transform a Business
“Adopting NPS has been the single most important strategic decision we have made
since deciding to franchise.” - CEO Brian Scudamore
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Brad Smith: CEO Intuit
“Thank goodness for Net Promoter. It provided a framework for thinking about—and managing in this social media world…
our teams call it the love metric”
Brad Smith, CEO Intuit
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Tony Hsieh: CEO Zappos
“We use NPS every day to make sure we are wowing customers and employees.”
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Apple Retail Mission:Enrich the Lives of Customers and Employees (create promoters)
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Closing the Loop: Echoing Enterprise
Supervisor Customer
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A-B Testing
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ZipCar
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Is it the Chick-fil-A cows?
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34 34
NPS Drives Profitable Growth
0.0
0.5
1.0
1.5
2.0
$2.5M
-20 0 20 40 60
NPS score (2009)
Average sales per unit (U.S. 2009)
* *
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Second-mile Service
• Manager works front of store
• Help mothers with small children
• Umbrellas for rainy day
• Outdoor greeter at drive-through line
• Refresh Drinks
• Free celebration dinners for best customers
• Daddy date nights
• Valentine Dinner
• Alert for people who appear sad/lonely
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LEGO
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American Express-Profitable WOW
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American Express: Prioritize touch points
Value proposition
design
Early engagement
Solicitation marketing
Usage marketing
Acquisition targeting
Cross-sell,
upgrade Retention
Merchant Dispute
Marketing effectiveness
Channel management
Cost management, outsourcing
Brand management
Rewards programs
Technology, CRM
strategy
Customer entry
Replacement Card
Call center
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Finally, in 2013
AT&T Wins J.D. Power Crown for Customer Care.
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AirBNB
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AirBnB Customer Profiles
Cassandra Casual Host
“Now my visits to my boyfriend are paid for. Great
idea.”
Stephen Semi Pro Host
“Hosting on AirBnB is
partly about paying off our mortgage and partly about meeting amazing people any day of the
week.”
Paul Pro Host
“We post our
properties on about five different sites including AirBnB.”
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AirBnB Customer Journey Steps
How to Host
List Communicate Book Host
How to Travel
Search Contact Book Travel
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Tuft & Needle
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How Tuft & Needle gathers NPS feedback:
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Bonobos-Pants that Fit
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NPS at Charles Schwab
-40
-20
0
20
40
2004
NPS
-352007
23
2010
35
Individual Investor NPS
“It’s the first thing I look at when I get into the office in the morning”
Walt Bettinger, CEO
• Branch Metrics
• Training
• Root cause closed-loops
• Clear link to loyalty economics
• ‘Bad profits’ elimination
• “CPS” (Client Promoter Score) fests
• HR integration (employee NPS)
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Your baby is beautiful—may I hold him?