nps sample presentation

SWISS ARMY KNIVES CUTLERY TIMEPIECES TRAVEL GEAR FASHION FRAGRANCES | WWW.VICTORINOX.COM

NPS SampleSurvey at Victorinox AG

By: Victorinox AG

By: Marshall Anderson

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Presentation Purpose

• Provide Victorinox with initial NPS data.

• Share findings from NPS sample survey.

• Provide a summary of activities conducted during internship project with Victorinox.

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Background: Victorinox AG

• 1884 Karl Elsener opens a cutlery shop in Ibach, Switzerland.

• 1891 Karl Elsener and coworkers deliver knives to the Swiss Army.

• Present CEO, Carl Elsener IV.• Victorinox is most well known as the maker of the “Original

Swiss Army Knife.”• Victorinox has recently added other product departments.

• Timepieces in 1989• Travel Gear in 1999• Fashion in 2001• Fragrances in 2007

SWISS ARMY KNIVES CUTLERY TIMEPIECES TRAVEL GEAR FASHION FRAGRANCES | WWW.VICTORINOX.COM

THE INTERNSHIPPROJECT

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Internship Project Background

• Historically Victorinox AG sold all product through wholesale in a B2B setting.

– In 2001 strategy moved the company to explore the realm of selling direct to the consumer (D2C) as well.

• As such, some form of customer feedback tool will be important for the sustainability of Victorinox in the D2C market.

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Internship Overview

• Direct Advisor: Markus Neawie.– Global Retail Operations Director.

• Assistant Advisor: Kilian Eyholzer.– Global Head of eCommerce.

• Internship Position Title: Retail Trainee.– Located in the Retail Department at the Victorinox

headquarters in Ibach, Switzerland.

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Internship Project

• Advisor Markus Naewie desired to test the feasibility of the customer feedback tool NPS at Victorinox.

– My project was to run an initial test of NPS at Victorinox.

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Internship Overview Continued

• The foundational element to the internship was an expository thesis paper.

– It was recommended by Kilian Eyholzer that a thesis paper be composed to capture the project conducted for internship.

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Internship Project: Introduction

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Internship Project: What is NPS

• The term NPS was first coined by F.F. Reichheld in an article written for the Harvard Business Review.– NPS: Stands for Net Promoter Score.

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What is NPS: The Ultimate Question

• To calculate an NPS, data is collected by asking customers the ultimate question, “on a scale from zero-to-ten how likely are you to recommend company X to a friend or colleague?”– This question has been researched and responses to this

question were shown to be the most predictive of customer behavior (Markey & Reichheld, 2011, p.50).

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What is NPS: Sustainable Growth

• Premise: Customer loyalty and customer referrals lead to sustainable profits.

• NPS Survey system focuses on categorizing customers based upon loyalty and likelihood to refer someone to the business of interest.

• By measuring word of mouth and customer loyalty NPS is predictive of future growth and profitability.

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Internship Agenda

• What is NPS?• Why and how can NPS grow Victorinox?• How to implement NPS at Victorinox?

Introduction

• Prepare questionnaire.• Create store sample.• Create electronic sample.

Survey

•Aggregate results.•Present results to Makus and Kilian.•Identify key topics.•Offer recommendations for action.

Results Examination

• Proposal for general roll out.Outlook

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Internship Project: Why NPS?

• Global Retail Operations Director, Markus Naewie, selected NPS as a sample project after reading multiple pieces of literature on the system.

– Many pieces of literature indicate the Net Promoter system leading companies to profitability.

What is NPS: Using the Zero-to-Ten Scale to Categorize Customers.

–NPS=%Promoters - %Detractors.

What is NPS: Calculating a Score

Detractors20%

Passives40%

Promoters40%

Customer Base

(40% Promoters)-(20% Detractors)=NPS 20%

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Why do Companies Use NPS

• Using NPS can reveal where a company is earning “bad profits.”

– Bad profits are areas of a business where a company may be making money, yet hurting customer loyalty.• i.e. High extra fee‘s charged by banks or phone service providers.

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Why Use NPS: Bad Profits

New process or product that increases profit.

Loss of customer loyalty.

NPS Results

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What is NPS: Using the System

• Companies seek to categorize their customers based on customer responses to the ultimate question.

• The Authors advise companies to ask customers how to improve their loyalty.

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Follow Up Question

“What is the primary reason for your score?” -Suggested by Reichheld (2011), (p. 4).

“How could our company improve your score?”

“How might our company be able to increase your loyalty?”

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Closing the Loop

• It is important to “close the loop.”– This means taking action based on recommendations.

• Invest in areas or departments with a low NPS• Contacting detractors to hear from them.

Internship Project: Goals

• Run sample NPS Survey.– Gather results.– Gain experience for future implementation of the Net Promoter

System at Victorinox.– Calculate initial NPS for Victorinox.

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Internship Project: Approach, Two Survey Types

• Survey Type: Transactional

– Gauge customer loyalty based off of bottom up approach.

• Survey Type: Relational

– Gauge customer loyalty based off of a top down approach.

Approach

• Transactional Survey– Personally approach

customers.• Ask them, «the ultimate

question» and «how can Victorinox improve?»

– This approach was taken in order to achieve high response rates• Observe first hand how the

survey process was received by customers.

• Relational Survey.– Email Approach

• Recipients:1,000 customers from Victorinox customer database (CDB).

– This approach was used to obtain responses from a wider population than could be reached in person.

SWISS ARMY KNIVES CUTLERY TIMEPIECES TRAVEL GEAR FASHION FRAGRANCES | WWW.VICTORINOX.COM

NPS Sample

Transactional Survey

Results By Store

BrunnenNPS 76%

• Response Rate: 77%.• Number of Respondents: 67.

– Days in store: 5.

Zurich Flughafen

NPS 62%

• Response Rate: 83%.• Number of Respondents: 66.

– Days in store: 4.

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Determining Customer Composition

• The following slides show the customer composition that produces an NPS for each store.

• There is also a projected customer composition.– This projection is based on Reichheld’s suggestion to fight

response bias by scoring non-respondents as a fifty/fifty mix of promoters and detractors.

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Brunnen Customer Composition

Sample Customer Composition3%

13%18%

26%

79%62%

Actual vs. Projected

PromotersPassivesDetractors

Projected Customer Composition

NPS=49%NPS=76%

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Zurich FH Customer Composition

Sample Customer Composition5% 11%

29%32%

67%58%

Actual vs. Projected

PromotersPassivesDetractors

Projected Customer Composition

NPS=47%NPS=62%

Combined Results of In Store Survey

• NPS: 69%– Responses: 133

• Response Rate: 80%

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Combined Transactional Results

Sample Customer Composition4%

12%23%

28%

73%60%

Actual vs. Projected

PromotersPassivesDetractors

Projected Customer Composition

NPS=48%NPS=69%

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Results: Grouping Suggestions By Category

• Four categories were used to organize all responses.– The Categories.

• Improve Facilities.• Improve Product.• Improve Communication.• Other.

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Grouping Suggestions By Category

• Brunnen • Zurich FH

Improve Facilities

64%Improve Product

18%

Other18%

Suggestions By Category

Improve Facili-ties62%

Improve Product

8%

Improve Commu-nication

15%

Other15%

Suggestions By Category

*All suggestions came from surveys conducted in English, for Zurich FH

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Grouping Customer Feedback: Combined Results

Improve facilities63%Improve Product

13%

Improve Communication8%

Other17%

Suggestions By Category

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Where Victorinox can close loop.

• Brunnen– Add chairs in the basement

for the elderly.– Lower prices.– Place sign by stairs,

«Elevator available upon request.»

• Zurich Airport Store– Add a display to clarify

carry-on rules for pocket knives.

Key Topics

• Give Zurich airport customers time to use the product.– Often new to Victorinox.

• Contact information.

• Most likely, store staff will not be used to survey customers.– Not enough time.– Customer may feel the good service was not genuine.– Avoids manipulated results.

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Key Topics

• Translate survey into Italian and Mandarin.– Capture more customer responses.

• Accommodate specific customer bases.– Brunnen: Swiss natives and elderly.– Zurich airport: Chinese.

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Key Topics

• Survey Weaknesses and Flaws.– Only two locations.– Short collection period.

• Insufficient data for economic validation of NPS system at Victorinox.

– No response plan established to close the loop.

SWISS ARMY KNIVES CUTLERY TIMEPIECES TRAVEL GEAR FASHION FRAGRANCES | WWW.VICTORINOX.COM

NPS Sample

Relational Survey

Relational Survey

• Data gathered from email survey.– Break Down

• 1,000 received the email– 400 from London CDB– 400 from Geneva CDB– 200 from Brunnen CDB

• Recipients chosen at random.

Relational Survey

• By request more questions were added to this survey.– Questions added:

• How many times did you make a purchase from Victorinox in the past 12 months?

• What type of item did you last purchase from Victorinonx?• How satisfied were you with this item you purchased?

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Results

• NPS= 76%– Response Rate: 9% Detractors

2%

Passive20%

Promoters78%

Customer Composition

• Meta analysis on 45 surveys found that the average response rate was 6-15% (Jin, 2011, p. 76).

• Reichheld (2011) suggest that NPS surveys achieve an response rate of 65% or better (p. 110).

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Grouping Suggestions By Category

Improve Staff/Service

19%

Improve Clothing11%

Improve Communication12%

Create Promotions12%

Other19%

Improve Products in General

27%

Suggestions By Category

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Key Topics

• Varied NPS– Scores by CDB

• London: 58%• Geneva: 75%• Brunnen: 87%

– Indicates need for region specific NPS targets.• Varied needs for improvement.

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Key Topics

• Survey Flaws and Weaknesses.– Average response rate: 9%

• Meta analysis on 45 surveys found that the average response rate was 6-15% (Jin, 2011, p. 76).

– Response rate by CDB• Brunnen: 19%• London: 6%• Geneva: 7%

– No response plan established.

Key Topics

• Customer Purchases

SAK Cutlery Timepiece TRG Fashion Fragrance0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

Purchase History by CDB

Brunnen

London

Geneva

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Other Findings

0 1 or 2 3 or 4 5+ Purchases in the Past 12 Months

0%5%

10%15%20%25%30%35%40%

Purchase Frequency

NPS = 100%*

NPS = 73%NPS = 71%

NPS = 79%

* This score was calculated with only 5.56% of the data which is only 5 total responses.

SWISS ARMY KNIVES CUTLERY TIMEPIECES TRAVEL GEAR FASHION FRAGRANCES | WWW.VICTORINOX.COM

FORESEERESULTS

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Statistics

• Number of respondents = 3,785– Collection Period: 1 Year– Response Rate: Unknown

• Response Rate for the first 6 months of the survey was 45.58%.

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ForeSee Results: Scale discrepency

Detractors12%

Passive23%

Promoters65%

Customer Composition

NPS=52%

• Responses to the ultimate question were collected on a 0 to 100 scale for the ForeSee survey.

• In order to calculate an NPS these scores were rounded.

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ForeSee Results: Scale Discprency

Detractors21%

Passives32%

Promoters47%

Customer Composition

NPS=26.8%

• I rechecked this and calculated an NPS without rounding the scores to fit a 0-10 scale.

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Key Topics From ForeSee Results

• Contingency Analysis– Regions Specific NPS

• Regression Analysis– Top Predictors of customer loyalty based off of site visit for

Victorinox.ch.

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Contingency Analysis

• Contingency Test– 27 countries with the most responses were selected for this

test, so that there was sufficient data for each country.• These 27 countries represented 75% of all responses.

– Chi Squared Test– Ho: There is no relationship between a persons likelihood to recommend

Victorinox and their country of origin.– Ha: There is a relationship between a persons likelihood to recommend

Victorinox and their country of origin.- The test produced a Chi squared result of 502 exceeding the test value of

78.16.- Conclusion: Do not accept the null hypothesis.

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Multiple Regression

• Multiple Regression Test– Y variable: Ultimate Question– X variables:

• Satisfaction*• Look and Feel• Navigation• Product Browsing• Product Images• Brand Commitment• Brand Confidence• Communication on Social Network• Purchase Products in the Future

*Satisfaction variable was removed from the test as it was shown to have multicolinearity with the other variables.

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Multiple Regression: Amount of Variables Required Two Initial Separate Tests

• Test 1– Y variable: Response

Value to Ultimate Question– X variables:

• Look and Feel • Navigation• Product Browsing • Product Descriptions• Product Images • Site Performance

• Test 2– Y variable: Response

Value to Ultimate Question– X variables:

• Satisfaction • Brand Commitment • Brand Confidence • Likelihood to

Communicate Victorinox on a Social Network

• Purchase Products

Green highlighted x variables represent top predictors for each respective test.

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Multiple Regression: Top Predictors of the Ultimate Question Response

Coefficients Standard ErrorIntercept 13.5907 1.7068Look and Feel 0.1285 0.0203Navigation 0.1338 0.0173Product Browsing 0.0641 0.0174Product Images 0.0596 0.0193Brand Commitment 0.2198 0.0114Brand Confidence 0.3189 0.0136

- This model predicted 47% of the variation in a respondents answer to the ultimate question.

- Figures below are for a scale of 0-100.

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ForeSee Results

• 57% of respondents offered some form of a suggestion or comment.

• A key word search was conducted with the free response question that asked “what is the one thing we could to to provide a better online experience?”

• Three categories were searched.– Visual– Information– Shopping

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ForeSee Results: Grouping Suggestions

• Percentage of all suggestions regarding a certain category.– Visual: 25%– Information: 17%– Shopping: 17%

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Suggestions from ForeSee Results

• Determine single scale to use so all results are comparable.

• Shorten Survey to increase response rate.– Past Survey had 18 questions.

• Develop region specific NPS targets.

• Victorinox needs to focus on increasing brand confidence and brand commitment in order to increase customer loyalty.

• Respond to customer demands in the categories of, information, visual, and shopping.

SWISS ARMY KNIVES CUTLERY TIMEPIECES TRAVEL GEAR FASHION FRAGRANCES | WWW.VICTORINOX.COM

MOVING FORWARD WITH NPS

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Suggestions

• Set ground work for NPS return on investment (ROI).

– Longer Collection Period• Multi regression with financial data.

– More Data• Track profitability behavior.

• Develop Response Team– Track impact of closing the loop.

• Sales• NPS

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Suggestions

• Region Specific NPS– Contingency analysis.

• Continuous communication with store managers.– Feedback forum.– Provide storemangers with a small budget for closing the loop.

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Suggestions

• Survey Language– Mandarin and Italian as well.

• Customer Contact– Instore tablet computer– Actively seek customer contact infromation.

• Send survey shortly after contact.

• NPS is good, but not everything.– HomeBanc

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Store Manager Feedback

• Brunnen– Survey customers in a less

formal way.– From past experience

there is a large demand for more childrens products.• «My first Victorinox

timepiece.»

• Zurich FH– Gaining customer

feedback was good, surveys should be conducted maybe once a month.

– Online customer survey may have a lower response rate, however feedback may be more detailed.

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How are Other Companies Surveying Customers.

• Enterprise surveys customers by calling them. (Markey & Reichheld, 2011, p.109)– Response rate for customers who pick up the phone, 95%.

(Markey & Reichheld, 2011, p.109).• An in depth query in an online database for my University

yielded little results reporting on survey forms commonly used by companies.

• Many of the companies Reichheld reports on acquire customer contact information as a part of conducting business. i.e. Enterprise, Allianz, and Rackspace. – This makes surveying their customers more feasible.

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Suggestions: Typeform

• Online form building software.– Free for basic features– 18.00€/Month for upgrade– Create, distribute, and analyze.

• Survey: https://marshall.typeform.com/to/xFNpwE• Store Manager Forum: https://marshall.typeform.com/to/sBV9Mn

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Suggestions: Typeform

• Why Typeform– Written in the language of the customer not the researcher.– Provides functionality for Victorinox.– Gathers data efficiently.– Interactive features may increase response rate.– Delivers plus one.

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Outlook

• Victorinox has a strong reputation.– Customers are willing to provide feedback.

• The NPS porcess brings Victorinox closer to customers.– Provides insight on how to serve customers.– Helpful for navigating the D2C realm.

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Conclusion

• Internship: Project– Process provided experience to reference for future use of

NPS.– Insight was gained on using the Net Promoter system with

Victorinox and their customers.– Data was collected to calculate an initial NPS for Victorinox.

• Internship: Personal Lessons Learned– Create more flexibility in a project schedule. – Spend more time working with the data collected.– Meet with advisors consistently to receive feedback on

progress.– Present project to other colleagues to receive feedback from

an outside prospective.

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Questions?

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Thank you for your time.