All Posts Tagged With: "customer retention"
Recommendability Boosts Revenues
Net promoter score (NPS) is a measure of customer loyalty that many companies are using instead of customer satisfaction surveys. You determine your NPS by asking customers a single question: “How likely is it that you would recommend our company to a friend or colleague?” Customers use a 0 to 10 rating scale, and their responses are categorized as Promoters (9-10 rating), Passives (7-8 rating), and Detractors (0-6 rating).
You determine your NPS by subtracting the percent of Detractors from the percent of Promoters. Scores of 75% or higher are considered very good.
Church of the Customer Blog recently reported on the 2010 NPS Industry Benchmark reports released by Satmetrix. The NPS leaders by industry are:
- Airlines: Jet Blue (64%)
- Auto Insurance: USAA (78%)
- Banking: USAA (81%)
- Brokerage & Investments: Charles Schwab (46%)
- Cable & Satellite TV: DIRECTV (27%)
- Cellular Phone Service: Verizon (41%)
- Computer Hardware: Apple (78%)
- Consumer Software: Adobe Systems (37%)
- Credit Cards: American Express (27%)
- Department, Wholesale & Specialty Stores: Costco (66%)
- Grocery & Supermarkets: Trader Joe’s (69%)
- Health Insurance: BlueCross BlueShield of Illinois (5%)
- Homeowners Insurance: USAA (69%)
- Internet Service: Road Runner/Time Warner (21%)
- Life Insurance: State Farm (34%)
- Online Search & Information: Facebook (65%)
- Online Shopping: Amazon.com (71%)
A few things jump out of this list. First, health insurance companies stink. If 5% is the best…
14Apr2010 | Steve George | 0 comments | ContinuedWalk in Your Customer’s Body Armor
USAA insures military members and their families. It does this really well: Its customer retention rate is 97.8%.
The company’s call centers are critical to serving customers located around the world. Its call center reps spend six months in training before answering customers’ calls. They eat MREs (meals ready to eat), find out what it feels like to wear Kevlar vests and flak helmets, and receive deployment letters to get them thinking about what such letters mean to the families they affect.
USAA understands its customers’ needs. It was founded by 25 Army officers in 1922; almost a quarter of its management and new hires have served in the military. It has ranked number 1 or 2 every year for the four years of the BusinessWeek and J.D. Powers Customer Service Champions list. No other company has come close to matching its performance. (“USAA’s Battle Plan,” Jena McGregor, BusinessWeek, February 18, 2010)
Mobile customers require mobile banking and insurance solutions. With USAA, a service member can use his iPhone to send a photo of his check to the USAA bank and it is deposited in his account. He can find out his balance with a text message. Later this year, he should be able to email…
1Mar2010 | Steve George | 0 comments | ContinuedKEYSTONE: Customer Knowledge
An organization exists to serve customers whether they are called customers, clients, patients, students, constituents, or another name given to people who come to you for your products or services. A key measure of your success is how well you meet your customers’ requirements: Meet or exceed them and you improve satisfaction and loyalty with the benefits these provide; fail to meet their requirements and you lose customers, revenue, or support.
The first order of business, then, is to make sure you know exactly what your customers require. Most organizations don’t. They think they know. After all, they interact with customers every day. They may even be able to produce a list of customer requirements, which should really be called a list of assumptions about customer requirements because few organizations take a systematic approach to identifying, validating, and communicating key customer requirements.
I once worked with a manufacturer that was the worldwide leader in its industry. After completing its award application, I was asked to share my feedback on the application with the senior leadership team. My first bullet said: You do not have rock-solid understanding of customer requirements.
Boy, did they lay into me! “We’re the market leader,” one said, “of course we know…
22Oct2009 | Steve George | 0 comments | ContinuedBaldrige and Customer Results
In an earlier article, we listed some of the world-class financial results achieved by Baldrige Award recipients. Their high performance is not limited to financial measures: Another area where they excel is in satisfying, delighting, and retaining their customers.
By customers we mean the typical consumers of products and services as well as patients and families, students and parents, citizens, and any other group that an organization exists to serve. Whatever your organization’s goals for serving your customers, evaluating and improving your management system through regular Baldrige assessments will help you achieve them.
You can test the validity of that statement by considering the customer-related results of organizations that have received the Baldrige Award:
- Compound annual growth rate with key customers increased 20-44% in six years (Cargill Corn Milling North America)
- Patient satisfaction scores surpassed the national top 10% (Poudre Valley Health System)
- Scored better than its competitors in all categories in successive customer surveys (PRO-TEC Coating Company)
- 84% of hospital customers would recommend to others (Mercy Health System)
- Named it the best healthcare provider in the region (Sharp HealthCare)
- 90% of businesses would recommend the city to others (City of Coral Springs)
- Retained 97% of its hospital members (Premier Inc.)
- Increased customer retention from 93% to 100% from 2000…
