#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
New reference source of NPS benchmarks

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.

image Improving response rates to survey requests sent by email

Way back in October last year I blogged about using direct marketing techniques to improve response rates to surveys. This post addresses five additional ideas that are specific to survey requests sent by email.

image How I got my two biggest promotions: True Stories

I was speaking to a business school student recently. She asked me about how I managed to get promoted during my career. That got me thinking… Luck and hard work…

image A legendary Mark Hurd speech to HP employees in Israel

Mark Hurd is CEO of Oracle and was CEO of HP before that. While at HP, he made many speeches about cost. His general philosophy was best illustrated by my favorite event; his speech to all employees in Israel. It was broadcast to the entire company, coming shortly after the company acquired EDS…


Notable customer experience items from other sites

Customer Experience Matters Blog: Introducing the Temkin Customer Success Index

Customer Success teams are common in the software industry and exist in some other industries too. For software, their work is to ensure customers actually use the software they have bought. The service is usually provided at no charge. Among other tasks, Customer Success people sit with users to observe them using the software and to determine whether they can achieve the results that were used to justify the purchase in the first place. When I worked at HP’s $4B software division we ran an A/B test where one business had a Customer Success team and another comparable business did not. The improvement in contract renewal rates made it easy to decide to expand Customer Success to all businesses. So… renewal rates were our main metric. Bruce Temkin’s team proposes a Customer Success Index based on a composite of five metrics in their latest blog. Read it here.

Customer Experience Matters Blog: Six Laws of Customer Experience (Infographic)

Two Temkin Group posts this week! (I have no connection with Bruce or his company.) The most-downloaded content on their website is a free eBook called The Six Laws of Customer Experience. It is supported by a simple infographic that I find to be both clear and useful. You can download it in various sizes here.


Looking forward

A relatively quiet time as summer starts. You may like to contact me if you would like me to talk to you or your teams, in person or remotely. A LinkedIn video conference or similar might be useful for one of your team meetings or training sessions.

Here are links to all of our books on Amazon.com. Kindle versions are available in all stores. Print versions are available from the major stores only, with the notable exception of Australia, where print versions are not available from amazon.com.au.

Customer Experience Strategy – Design & Implementation

Net Promoter – Implement the System

Customer-centric Cost Reduction

“So Happy Here”: The Absurdist but Essential Guide to Better Business (Color edition)

“So Happy Here”: The Absurdist but Essential Guide to Better Business (Black & White edition)

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You can also email me, Maurice FitzGerald, at mfg@customerstrategy.net.

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