the winner takes it all

4
by Yana Alexandrova, CXP Solutions @ GemSeek The winner takes it all The link between Relative NPS and business results

Upload: gemseek

Post on 16-Apr-2017

82 views

Category:

Business


0 download

TRANSCRIPT

Page 1: The winner takes it all

by Yana Alexandrova, CXP Solutions @ GemSeek

The winner takes it all

The link between Relative NPS and business results

Page 2: The winner takes it all

What do you think is the reason?

So, what can you do to �nd out where you really stand?Think competitive benchmarking! Doing CX benchmarking as part of your NPS studies helps you identify the key drivers of competi-tive advantage, which will inevitably lead to better market posi-tioning.

Analyzing various industries and geographies, we at GemSeek noticed some patterns in the relationship between Relative NPS (leadership) and company revenue. In the example below, we surveyed B2B customers of an industry equipment manufacturer across several countries and business lines, and linked relative NPS (rNPS) with revenue dynamics. Results show that only the leadership position (rNPS≥5%; 5% higher absolute NPS vs. the best competitor) can predict future growth.

What is my keyCXP metric ?

NPSy-o-y

growthRelative

NPS

Do you aim for an increase in absolute NPS year-on-year or do you seek to create continuous erformance gaps versus your competition? The key to your company’s growth might be hidden in the answer of this question.

Many organizations focus solely on their current customer base when measuring NPS. In their e�ort to get a bigger piece of the cake, they invest signi�cant resources in improving experiences and strengthening customer relationships. However, they o?en see little or no results from these e�orts.

Well, no matter how fast you improve your customer experience, there might be another player out theredoing the same thing with even bigger success. There fore, it is not only about being on the upside, but also standing out from the crowd.

Let me ask you, how do you interpret the Net Promoter Score of your business?

www.gemseek.com

???

NPS Leader

Page 3: The winner takes it all

HIG

HER

REV

ENU

E

Our research shows that NPS leadership is linked to higher Share of wallet:

The data shows that the average revenue growth for businesses with NPS leadership position was 13%. Along the lines of this argument, it didn’t make much difference whether the business was lagging or on par vs. best competitor – in both cases we saw moderate or no growth of revenue.

Revenue growth in companies leading on the relative NPS metric is achieved by two main triggers: on the one hand, they attract new customers because of positive Word of Mouth, and on the other, they achieve an increased Share of wallet among current users.

High share of wallet ensures stable market shares on one hand, while positive Word of mouth allows room for growth to loyalty leaders.

Being an average performer on the loyalty scale is not enough. And it makes nearly no difference whether you lag or are on par with competitors. What really sets you up for success is being a leader and sustaining a positive gap to your strongest competitor.

www.gemseek.com

NPS leader

REVENUE GROWTH % ‘13 - ’14

LEADER Co-LEADER Non-LEADER

13%

2%

-2%

NPS Leader

SHARE OF WALLET

LEADER Co-LEADER Non-LEADER

50%

25%

42%

Notes: Chart is based on data for Industry equipment business; Number of categories & countries measured: 16

Page 4: The winner takes it all

by Yana Alexandrova, CXP Solutions @ GemSeekThe link between Relative NPS and business results

there is no room on the CX battlefield for average performers and followers.

The winner takes it all

In other words, the winner takes it all – there is no room on the CX battle�eld for average performers and followers.