We’re entrenched in the experience economy – consumers expect experiences that meet them wherever they are.
Chuck Christianson, Senior Vice President of Sales, Account Management & Client Solutions at Connexions Loyalty, recently spoke about this topic at the SIFMA Asset Management Account Roundtable. SIFMA, the Securities Industry and Financial Markets Association, represents hundreds of securities firms, banks and asset managers.
For marketers, there are four critical elements inherent in any good customer experience: people, products, purpose and passion. Read more as we explore these new 4 Ps as a four-part series over the coming weeks. Enjoy part 1 below…
How likely are people to recommend your brand? This question is the foundation of a brand’s Net Promoter Score, a loyalty metric that measures a company’s promoters, passives and detractors. According to Jim Bush, American Express EVP of world service, “For every servicing transaction, we ask, ‘How can we get the customer to feel better about American Express and recommend it to a friend?’ That’s a promoter. For a promoter who is positive on American Express, we see a 10 percent to 15 percent increase in spending and four to five times increased retention, both of which drive shareholder value.”
Two Harvard Business Review studies of firms in the telecom and financial services industries showed that only about 10 percent of declared promoters actually do refer profitable new customers. Not bad, but what about the other 90 percent? And remember—not all referral customers are the same. By understanding which customers are likely to respond to a campaign with a purchase, and which are more likely to respond by referring a friend, companies doubled their return on campaigns.
While NPS is a great tool, the original notion of a promoter may need updating. We all know that what people say and what they do can be two different things. And, in the age of social media, an active approach is key. Last year at the Summit on Customer Engagement the concept of defenders was introduced. Defenders are active on social media sites—they don’t wait for you to invite them—they proactively talk about your business, correcting negative comments and amplifying positive ones.
So how important are these advocates to your bottom line?