#63 – New NPS Benchmarks, don’t work for a cost-reduction company, Temkin Group posts

New reference source of NPS benchmarks, don’t work for a cost reduction company (part 2). Welcome to the 63rd edition of my customer strategy newsletter. The five topics this week are:

1. New reference source of NPS benchmarks
2. More evidence that you should not work for a cost reduction company
3. Latest blog posts
4. Notable items from other sites – Both from Temkin Group this time
5. Looking forward

Whether you use the Net Promoter Score or another system, one challenge is to know whether your score is good or bad. The best way to know is to compare your trends to those of your main competitors. (If you believe you don’t have any competitors, well… you have a different problem entirely.) But how can you make such comparisons? There are no comprehensive public databases of NPS benchmarks that have been collected in a consistent way. Yes, there is at least one site that will allow you to look at what companies publish as their own NPS number. But your number and their number will not have been collected in the same way.

The main source of NPS benchmarks up to now has been the Temkin group’s regular NPS benchmark report. This has changed. JD Edwards, ROI Rocket and Bain have teamed up and established ‘Bain Certified NPS Benchmarks’. In principle, and as originators of the Net Promoter System, only Fred Reichheld, Bain, and/or Satmetrix could possibly certify that an NPS benchmarking process is correct.

While the article does not say exactly how Bain certification works, it provides some clues. A minimum of 250 responses was achieved for each company covered. They interviewed between 3,000 and 100,000 consumers for each industry sector covered, far more than I have seen for any other study. They have collected data for “more than a dozen” industries. You will also see that their work with ROI Rocket on retailers proves the considerable spending differences that exist between Promoters and other respondents, as well as a variety of other factors.

OK, I think that is enough of an introduction. Reading the paper in detail will be a good use of your time. And by the way, the leading retailer, in terms of NPS, has a name that begins with the letter A. Read all about it here.

More evidence that you should not work for a cost reduction company

Some months back I wrote a non-customer-experience LinkedIn article suggesting that if you want to be happy, you should not work for any company whose main product/service is cost reduction. The reason I gave is that if you do so, you become the cost reduction. Take outsourcing companies as an example. Their business is offering companies cost reductions of about 20%. Examples include companies that propose to operate your IT infrastructure for 20% less than it currently costs you. These reductions can only come from three sources: capital costs – notably real estate costs, people costs, and paying suppliers less.

An article just appeared in 27/7 Wall St. that provides at least some proof for this. Entitled Worst companies to work for. it uses Glassdoor ratings as its source and excludes small companies. DXC is 12th worst. They have 150,000 employees and are the result of the merger of the former outsourcing division of HP with CSC. The main resulting business is IT outsourcing. Employees complain about absence of pay raises and bonuses, and ongoing layoffs. Alorica is 11th worst, has 176,000 employees and provides outsourced support desks for companies that want to reduce the cost of doing the work themselves. At number 8 (from worst), CompuCom has 11,000 employees and provides IT services.

There are other cost reduction and low-cost companies on the list. My message remains unchanged: If you work for one of these companies, you are a source of cost savings, unless you are at the level of the leadership team. Unless you are desperate, I suggest not working there.

Our latest blog posts

Here are the latest posts. Older posts are still available on the blog page.