Randy Hanson is a vice president of the Marketing Sciences Group at Market Strategies International. He has more than 25 years of research experience executing a wide array of research, consulting and statistical responsibilities.
Randy is a sought-after consultant, internally and externally, on most aspects of marketing strategy and marketing research. He is a nationally recognized expert in applications of Customer Experience Management, in particular Churn/Retention, Commitment, Loyalty and Customer Satisfaction. Randy designs, develops and implements project-specific approaches and multivariate analyses and is particularly adept at designing original solutions when textbook solutions fail.
He is a Phi Beta Kappa and Magna Cum Laude graduate of the University of Missouri, where he earned a bachelor’s and master’s degree in statistics, and later an M.B.A. with a marketing emphasis. He was honored as Best Graduate Instructor in the Department of Statistics and Outstanding Marketing Student in his M.B.A. program.
Randy has published several articles in industry periodicals and journals. He enjoys teaching and has delivered tutorials and speeches at leading national conferences.
We receive all sorts of questions about Net Promoter Score (NPS): Where did it come from? What are its major pros and cons? Is it the Holy Grail of marketing research or not? I answered many of these three years ago in an article for the AMA’s Marketing Research Magazine.
This post addresses the surprising volatility of NPS and how this continues to be a big challenge for users. We frequently hear statements like: “_____ seemed a bit surprised again this quarter by some of the [large] swings in NPS scores.” Our clients see differences that seem like they should be significant, yet turn out not to be. Just how volatile is this NPS measure, and how can we quantify this?
Sorry if the title misled you, but this isn’t another blog about Jennifer Lopez, Tom Cruise and Britney Spears versus (say) Lindsay Lohan, Keith Richards and George Clooney. This post is about something you may not think about, but should: The idea that, like celebrities, attributes–the many features and characteristics of products and services–also have a life cycle.
I came across this first in what seems an unlikely place: Brad Gale’s book Managing Customer Value. Along with others, he came up with the concepts behind Customer-Perceived Value in the 80s and 90s, and enjoys success to this day (www.cval.com). In the book Gale describes attributes passing through these stages:
“Life can only be understood backwards, but it must be lived forwards.” –Soren Kierkegaard (Danish, 1813-1855), the first existentialist philosopher
Even after decades of study (and oodles of actual studies), the “Customer Experience” remains a top focus for large and small companies alike. Work from McKinsey about the consumer decision journey (references below) is just one of many recent examples. Millions of dollars and labor hours, and prodigious efforts, are spent on the subject.
From time to time, clients ask—usually around the annual budget-setting cycle—“What should our priorities be in evaluating customers’ experiences? What’s the first, most important thing we need to understand?” My answer often echoes Kierkegaard’s assertion above: To best understand and prioritize, begin at the end. Although this list doesn’t include every possible flavor of CEM study, here’s my ranking and rationale for some major types:
While building a model predicting if someone would choose their current brand/provider again today, my client half-jokingly said, “Yeah, choice is one of those things that you can never move.” He meant, of course, that share and choice are resistant to change in the short term: No matter how hard you try, your efforts seem to have little effect.
Shares do change over time though, so how does that happen? Recently, I found one answer in an unlikely place, the bestseller Superfreakonomics. In one section it’s clear that to change a consumer’s future behavior, we have to understand the relative incentives she has and the why behind them. The key point being: Consumers’ personal choices and behavior are unlikely to change unless and until they believe that change is in their best interest.
In the eight years since Fred Reichheld’s Net Promoter Score (NPS) methodology burst onto the scene, it scaled the heights of fame only to be beset with accusations around its usefulness and authenticity.
In a recent issue of Marketing Research, I review the polarizing nature of NPS and suggest some new thinking to benefit those dealing with NPS today. Like many new ideas, NPS had flaws in practice that were not immediately evident. However, NPS provided benefits—like simplicity—too. In the article, I explore NPS as we understand it now to uncover what about it works, and why, and for whom…and what about it doesn’t work, and why, and for whom.
I hope that you’ll see the value in this exploration, and find the article to be not only an overview of NPS’ virtues and shortcomings, but also an objective appraisal of what NPS really brings to the table. In the article, I propose five steps that can help in deciding if NPS is right for you: Harnessing the very best of what NPS has to offer while providing practical direction and an approach which companies can use as a “reality check” throughout their own processes.
NPS still raises the ire of some and bolsters the faith of others. My article does neither; it merely asks, “What next?” and proposes several answers that I hope you will find thought-provoking.