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Reality Check: The importance of carrier ‘net promoter’ scores

Editor’s Note: Welcome to our weekly Reality Check column. We’ve gathered a group of visionaries and veterans in the mobile industry to give their insights into the marketplace.

What’s in the hearts and minds of AT&T Mobility, Verizon Wireless, Sprint Nextel and T-Mobile USA today? Think three letters: NPS – a fast-spreading obsession in the carrier community to foster a brand loyalty index for the industry, a “JD Power & Associates for mobile” called the net promoter score.

Ask yourself, “How likely is it that I would recommend my carrier to a friend or colleague?” No other question better defines the loyalty of a carrier’s customers than this one, according to Fred Reichheld’s 2006 best seller, “The Ultimate Question.” A fellow with the consulting firm Bain & Company, Reichheld used the answer to this question to understand which customers were enthusiastic about a company, which were satisfied but unenthusiastic, and which customers were unhappy. This is precisely what carriers seek to understand, and act on.

Let’s first take a closer look at the concept of a NPS, then more importantly, take a look at the challenge a carrier has in increasing it.

What is a net promoter score?

NPS is premised on the fact that customers’ satisfaction and loyalty can be measured as well as compared. A definitive method for quantifying loyalty is by determining the likelihood that the customer would recommend a company and/or its products to a friend or colleague. Every company’s customers can be divided into three categories: promoters, passives and detractors and then placed on a scale of 0-to-10.

–Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others, fueling growth.

–Passives (score 7-8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.

–Detractors (score 0-6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.

To calculate a carrier’s NPS, the percentage of detractors is subtracted from the percentage of customers who are promoters.

How can carriers use NPS successfully?

Carriers are currently working feverishly to consistently add NPS assessments at all subscriber touch points. For example, I’ve recently received automated SMS-based NPS surveys both after a new phone purchase as well as after a call to customer support to change my plan.

Now that NPS is being tracked, carriers are learning that low NPS can result from multiple “drivers” ranging from activation experience to customer service interaction to device use case (see Exhibit 1). So, the critical question for carriers is not just how to measure NPS accurately, but “what can be done to improve my NPS?” That’s the $1 million question or more accurately in the case of mobile operators the billion dollar question.

In order to impact NPS, carriers must consistently gain a much more detailed understanding of these NPS drivers. This is a herculean task, requiring the carrier implement automated processes to collect hundreds of thousands of responses across dozens of key touch points from owners of feature phones to smartphones and everything in between.

What carriers need to focus on next is how to consistently and automatically collect additional insights that help “peel back the NPS onion.”

Exhibit 1: Making NPS actionable requires understanding NPS drivers

Purchase drivers and retail experience:

–Purchase drivers (e.g., want a better phone, want better service, etc.).

–Context and mindset prior to entering store (e.g., unhappy with service).

–Actual in-store interactions (e.g., had to wait, unhelpful staff).

Initial experience:

–Out-of-box experience (e.g., complicated set up, useless manual).

–After sales service interactions (e.g., horrible tech support).

–Device and features usage (e.g., browsing is slow, voice sounds poor).

Ongoing usage experience:

–Device and features usage (e.g., battery keeps dying).

–Customer service interactions (e.g., customer service never picks up).

–Competitive plans and products (e.g., other carriers have better plans).

In a recent cross-carrier study of 98,000 consumers just 48 hours after their store experience, Mobile Posse learned that consumers entered the retail store not knowing which device they wanted, had CSAT scores a full half point lower on a scale of 1 to 5.

Exhibit 2: Knowledge of retail experience can help carriers tactically manage NPS

–Average CSAT when decision made in store:

–Average CSAT when consumer wanted specific OEM:

–Average CSAT when consumer wanted specific device:

The same study showed that “context” and “mindset” varied when comparing top 10 markets versus smaller media markets. In smaller markets, consumers’ decisions and satisfaction were more likely impacted by in-store representatives. These same consumers were found to be less satisfied on average than those knowing they wanted to buy a specific phone.

In both of these cases, carriers could boost NPS by appropriately modifying their store training curriculums.

Going forward

At a Net Promoter Conference, Verizon Wireless emphasized that NPS can’t be just the program for this year, or quarter or month, it must be durable. Verizon Wireless pointed out that the NPS score is not the goal, it is a symbol that helps you decide what to focus on to improve the customer experience. Using the verbatim, the actual words from the customers, is a powerful tool that allows everything from direct employee coaching to creating the rallying cry for the organization. Focus on the customer experience and the scores will come.

Carriers use NPS as a benchmark tool for a very competitive industry. Understanding NPS and making NPS actionable by understanding its drivers is hard work. But the alternative is not so attractive – the carriers at the bottom of the benchmark will likely suffer from losing customers, losing money and losing jobs.

As Founder and CEO, Jon Jackson provides the vision and leadership behind Mobile Posse’s mission to create a revolutionary and trusted mobile channel through the active idle screen. Jackson brings more than 17 years of strategic, operational and technical leadership experience to Mobile Posse from recognized companies ranging from a major Internet powerhouse to a television cartoon studio. Prior to forming Mobile Posse, Jackson spent over eight years in a variety of management and technical roles at AOL, as the company brought interactive advertising into existence. Previously, Jackson was the CTO of Frederator, producers of the Emmy-nominated “The Fairly OddParents” and “Chalkzone.” A recognized expert in interactive advertising and new product development, Jackson has also provided management and technology consulting services to companies like HBO, Viacom, and Primedia. Jackson holds a BA in English Composition from George Mason University.


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