12
THE SECRET OF OPTIMISING YOUR NPS www.bva-bdrc.com
THE SECRET OF OPTIMISING YOUR NPS
www.bva-bdrc.com
IntroductionWhile the Net Promoter Score (NPS) has its critics, it is undoubtedly the most widely accepted barometer of customer advocacy, transcending vertical sectors and geographic territories. Many businesses track their NPS continuously, and some choose (or are required) to publish it as a means by which customers and other stakeholders may assess their performance. For others, ‘before-and-after’ NPS measurement can provide a customer-centric indicator by which the success of business transformation programmes can be evaluated.
At BVA BDRC, we are great believers in the value of benchmarking as a catalyst for performance improvement, and as a means of setting performance in context. As such, we are proud to manage industry-leading CX benchmarking schemes across sectors such as banking, hotels, meetings and events, visitor attractions, travel and transportation – helping our clients to put customer experience at the heart of their decision-making. In this collection of short papers, we identify some of the
2
learning points which can be taken from across these sectors.
Matt Costin sets the scene by referring to the importance of industry context in interpreting NPS and to the value of establishing linkages to other business indicators, such as a brand’s ability to command a Brand Margin® (price premium). Caroline Ahmed discusses the impact of disruptive service models on traditional sectors, considering the example of neobanks: unrestricted by pre-existing brand expectations, unconstrained by legacy technology and unimpeded by costly service models. Jon Young then considers the ‘power of emotion’, explaining what we can learn from the most successful visitor attractions – delivering peak moments to create lasting connections with customers.
I hope you find the articles thought provoking, and invite you to contribute to the debate and get in touch with us.
Dr. Crispian TarrantChief Executive
Be the first to find out
That is the question clients often ask us. The desirability of benchmarking direct competitors is almost ‘a given’. But how far is it meaningful and useful to benchmark brand and CX performance with other categories, or against leading brands within those categories?
Important lessons can by learned by studying other categories, whether from the sales or ‘onboarding’ process, key service touchpoints, delivery of ‘peak moments’ or the ongoing relationship with the customer in an omnichannel setting. Just as any business which runs call centres, regardless of sector, could learn from First Direct (a UK bank renowned for customer experience), so any brand that wants to build a community of passionate followers would do well to take a look at Kew Gardens, with its high incidence of repeat visitors.
Learning from quantitative benchmarks across categories, however, is altogether more complicated. The Net Promoter Score (NPS) is still the most common barometer of CX performance across countries and industries. But even if you are working with a completely consistent methodology, NPS can
only ever be properly understood through the lens of sector norms and in the context of the original purchase / brand selection decision.
Within BVA BDRC, we manage sector-based NPS benchmarks across hotels, meeting venues, visitor attractions, airlines, railways and financial institutions, giving us access to scores for over 250 brands. At one end of the spectrum, visitor attractions comfortably outperform other categories – but then they deliver experiences which customers actively opt in to because of a personal interest. At the other end of the spectrum, several of the UK’s commuter rail lines typically record a negative NPS – but delays aside, few of us actively choose to spend a significant share of our incomes getting to work – and this inevitably affects the way we assess these brands.
In short, what constitutes a ‘good’ and ‘bad’ NPS score is always context-dependent, though this is not to downplay the value of comparisons. Successful visitor attractions deliver intense enjoyment from an immersive, much anticipated experience. They often create a connection to a community of other enthusiasts, and build upon an emotional engagement with the subject matter by creating peak moments, in turn creating enduring connection and memories. Most brands in service sectors should be able to take something from these examples.
Beyond the debate around how best to interpret NPS comparisons, it is always important to identify linkages between NPS and other business / brand performance indicators. Just as the original research from Harvard demonstrated the link between NPS and sales growth rates, our proprietary research in the hotel industry indicates a correlation between NPS and Brand Margin® (the extent to which a brand contributes a price premium over and above the intrinsic product).
In UK hotels at least, the relationship between NPS and Brand Margin® is more pronounced at either end of the service spectrum – in the economy and luxury tiers. With the usual caveats around correlation vs causality, in the economy tier a 7-point increase in relationship NPS typically converts to an additional £1 of Brand Margin®. In an age of squeezed profit margins, this gives owners of hotel brands and assets an indication of the likely return on investing in an improved guest experience.
To talk to us about creating peak moments or managing your customer experience, please contact Matthew Costin and Karen Small. [email protected] om [email protected]
NPS – to benchmark or not?
93 © BVA BDRC 2019
Neobanks - The visitor attractions of banking?Neobanks are redefining banking around the globe. Unrestricted
by pre-existing brand expectations, unconstrained by traditional technology and unimpeded by costly service models, their
propositions appeal to the digitally savvy who are looking for more inventive banking solutions.
Europe, and particularly the UK, are leading the way thanks to regulation that encourages innovation and competition, leading a slew of boundary-pushing brands such as Monzo and Starling. But to what extent is this reflected in customer sentiment? How does this compare to other sectors? And are traditional banks really under threat? We reviewed the Net Promoter Scores (NPS) achieved by more than 250 brands from a selection of BVA BDRC sector studies to find some answers.
Sector benchmarksVisitor attractions predictably dominate our selected sectors. These brands conjure passion and enjoyment and are well placed to foster an emotional connection. Most importantly consumers choose the experience, often going out of their way to get it, rather than needing a service that is a means to an end.
On the face of it, this is in stark contrast to financial services, which is closer to rail and airlines in our advocacy benchmarks. In all three sectors it is fair to say that a number of brands grapple with reputational problems, while service issues have the potential to spark frustration and fury.
Sector NPS
+100
0
94 © BVA BDRC 2019
As with all broad sector averages and comparisons there is more to this story than meets the eye and it shouldn’t necessarily be taken on face value. Dig a little deeper and the neobanks are clearly setting a stiff benchmark for the rest of the financial sector.
Sector NPS
Separating out Neobanks shows that they are generating a level of advocacy that is closer to visitor attractions, leaving other industry players trailing behind. They are even in the territory commonly occupied by brands famed for customer experience and loyalty, such as John Lewis and Amazon.
It is interesting, if perhaps risky, to draw comparisons between unrelated sectors. However, maybe the unique position of neobanks in the market means they do in fact share common ground with visitor attractions.
It is not unusual for visitors to attractions to experience:
• Connection: to a community of enthusiasts
• Enjoyment: from an immersive, much anticipated experience
• Passion: towards the subject matter
These emotional responses are virtually unheard of in financial services, with the exception of one or two challengers, or amongst niche groups such as hobbyist investors. The leading neobanks, however, buck this trend, with customers readily expressing admiration, affection and amusement.
+1000
95 © BVA BDRC 2019
I love Starling, it is the best
Brilliant customer service, excellent app that’s easy and fun to use
Starling: NPS +54
Monzo: NPS +64
Excellent banking service with efficient communication. Whoever created this is a genius.
I love Monzo, it really helps me
It’s a fully online operational bank, with great service and customer service, very pleasant and entertaining
How are neobanks doing it? Spotlight on MonzoLike visitor attractions, Monzo has established a community of enthusiasts, with users encouraged to shape its services. Its experience design-led approach, lauded by the UX community, puts it alongside brands such as Dyson and Tesla. Finally, it offers meaningful interactions, with core banking functionality coupled with beneficial lifestyle features such as bill splitting, balance rounding and receipt saving. On top of this, there is also the caché of the ‘hot coral card’! Mashable even goes as far as describing it as “the bank that’s apparently so cool it’s become a chat up line in London’s bars.”
All of this serves to fuel engagement, passion, advocacy and, ultimately, the well reported acquisition of 2 million new customers in 18 months thanks to positive word of mouth.
From a day-to-day usage perspective, this is borne out in our wider dataset.
• The overwhelming majority of Monzo users are promoters of the app
• 6 in 10 log into the app everyday – the banking industry average for daily access is half this
• Design, speed and breadth of functionality differentiates Monzo from peers
96 © BVA BDRC 2019
The future Looking forward, Monzo clearly have their eyes on the prize. Building on recent success, they have since commissioned advertising agencies to expand awareness beyond ‘East London millennials’. Although the brand has been quoted as being reluctant to rely on paid for advertising over WOM, this campaign has been taken seriously with investment in desirable prime time TV slots such as Love Island. Monzo is now reaping the rewards with more than 250,000 new customers and growth in brand awareness. But does this really pose a threat to the rest of the market? In line with other industry commentators, our conclusion is ‘not yet’.
As it stands, fewer than a quarter of users consider Monzo to be their main account compared to around 3/4 for each of the traditional banks. The same applies to Starling. Additionally, current account balances lag behind other more established brands. In Monzo’s case this is in spite of their customer base having an above average income.
Conclusion For the most part the neobanks, particularly Monzo, are proving to be formidable competitors to the traditional players. They bring a refreshing alternative to the market. By breaking out of the ‘banking mould’, they are achieving an emotional connection and amassing their own community of enthusiasts that bears a closer resemblance to visitor attractions than the banking industry.
However, while customers are becoming (often passionate) advocates they aren’t yet putting their money where their mouth is, with many appearing to trial these brands as secondary accounts. True to form, the UK market is proving once again that there is a reluctance to switch providers completely (borne out by recent industry switching stats).
The key question is how neobanks can marry the best of both worlds: coupling the magic moments and
impact of visitor attractions with the breadth and depth offered by a primary current account provider? And do they even want to?
Only time will tell. The recent PIN security concern and service outage show that Monzo is not immune to some of the issues experienced by other banks. However, they continue to pave the way for industry innovation with the potential for metal cards and customers receiving their salaries a day earlier. We will continue to monitor the story as it unfolds via our Moments of Truth Benchmarking programme. Contact Caroline Ahmed, Mark Long and Karen Troubridge to find out more. [email protected] [email protected] [email protected]
Average income
Average account balance
Monzo
£54K
£808
Starling
£48K
£829
Metro Bank
£50K
£1434
Barclays
£46K
£1650
Lloyds
£45K
£2098
Nationwide
£46K
£1610
Santander
£46K
£3478
97 © BVA BDRC 2019
Emotional Moments: Why Visitor Attractions Generate The Highest Net Promoter Scores
If there’s one thing that’s clear from our work with visitor attractions, it’s that they deliver incredible experiences.
By comparing the Net Promoter Scores (NPS) of over 250 brands in six sectors we’re now able to prove that visitor attractions deliver better experiences than other sectors too. As the table below illustrates, visitor attraction scores are head and shoulders above hotels, financial services, UK airlines and rail companies. +100
0 Sector NPS
98 © BVA BDRC 2019
Isn’t it a no-brainer that visitor attractions score higher NPS?These differences feel intuitive. Interactions with brands in other sectors tend to be a means to an end. You’d be hard-pressed to find anyone travelling from Paddington to Reading at rush hour for the thrill of the experience, even amongst the most committed train spotter. Banks are hardly the hedonic highlights of the high street, even when you account for the free pens. Hotels, of course, do provide pleasurable experiences but depending on the reason for the stay, they are sometimes just a gateway to the main event.
Interactions in the other sectors also tend to be high-stakes (e.g. a mortgage application), sharing unavoidable bad news (e.g. a flight delay), or so frequent that their customers have become numb to the experience (e.g. the daily commute).
In contrast, interactions with visitor attractions are not a means to an end - they are the end. People visit them to be uplifted, educated, inspired or entertained. They seek a momentary escape from their everyday lives and typically visit during their free time, when the pressures of everyday life are less constricting. Visitor attractions are chosen carefully, and it’s rare that people go to the same place more than a couple of times. And with the odd exception, attractions don’t tend to carry the baggage
of past disappointments or media outrage.
So visitor attractions have a clear head start compared to other sectors. But that is not to say other sectors cannot catch up.
Context is everythingWhen comparing across - or even within - sectors it’s important to note that all recommendation scores are given within context. Last week I visited Hartlepool and was asked to complete two surveys: one about my stay at a Best Western hotel, and the other about my visit to HMS Trincomalee (a visitor attraction). I gave both venues recommendation scores of 9 out of 10 but at no point was I comparing the two. My comfortable stay at the Best Western was scored against other similarly-priced UK properties I had stayed at in the previous 12 months. The inspiring trip to HMS Trincomalee was rated against the many visitor attractions I had visited recently.
So contextual expectations mean other sectors do not need to mimic visitor attractions to deliver comparable Net Promoter Scores. There’s no need for Best Western to introduce hourly cannon firing just yet.
But that is not to say that other sectors cannot learn from visitor attractions. Whilst context is different, the brain of the human rating it is the same, and so are the triggers for a ‘recommendable’ experience.
Would people talk about you down the pub? The Net Promoter Score has its critics but, like it or not, it is currently one of the primary metrics of success. But amidst the boardroom handwringing and hundreds of KPI reports, it’s easy to forget what it actually means.
In plain English, the Net Promoter Score is simply telling us how likely people are to talk positively about your brand. Not in the board room, but at the water cooler, at the dinner table or down the pub. To get people to talk positively about your brand, it is essential that you are memorable, and that you are not relegated to the thousands of insignificant transactions that make up the daily grind.
Being memorable requires one crucial component – an emotional response. We are wired to prioritise emotional experiences over any other. Doing so has ensured our evolutionary survival – it means that we avoid evolutionary dangerous situations (like being chased by a tiger), and gravitate towards beneficial ones (like friendship).
The importance of emotion in driving memorable experiences is underlined in our attractions work. When we look at the key drivers of recommendation at ALVA attractions, it’s the emotional factors that are most important – above the content, and practical factors.
99 © BVA BDRC 2019
Why are visitor attractions so effective at delivering this emotion? The path to delivering emotion is outlined in neuroscientist Lisa Feldman Barret’s excellent book ‘How Emotions are Made’ (reading it was an emotional high point of an otherwise forgettable jury service). In it, she explains our brain can only experience an emotion if we recognise the stimulus we are being presented with, or if situations are relatable. The emotion then occurs when the familiar stimulus is taken in a new direction. A simple example is the comedian who provides unique perspectives on everyday situations, or the horror film that uses familiar props like laughing babies to scare the wits out of you (*shudder*).
Visitor attractions follow a similar model. In our many conversations with visitors, the emotional outcome always involves something relatable. A story of a seven year old girl in Roman Britain may drive empathy and nostalgia because a visitor will see the similarities (and striking differences) with their own children or childhood. The Magna Carta or
David Bowie’s handwritten lyrics will hit home because they are iconic, which at its core requires ‘hyper-familiarity’. I’ll always remember a visitor describing to me their awe at seeing a silk map from the Battle of the Somme that was then recycled as a ball gown years later. There we had three familiar concepts – a map, silk, and a dress – each taken in unusual directions. (The map was made out of silk so opening it wouldn’t make any noise in enemy territory
by the way).
Of course, there’s no need for banks, rail companies or other sectors to wheel out the Magna Carta or to offer stand-up comedy in their waiting areas - although a train manager on South West Trains did do a quiz on my commute last year (and it was great). But they should try to offer new perspectives on the familiar.
Neobanks such as Monzo and Starling are great examples of how this is being done outside visitor
attractions. The Net Promoter Score of neobanks are significantly higher than the rest of the finance industry. Indeed at 32nd and 53rd out of 250 brands, they do better than a significant number of visitor attractions too. As outlined by my colleague Caroline Ahmed, part of the neobanks’ success is their ability to surprise customers with improvements on familiar concepts.
Another requirement for strong recommendation scores is ‘social
currency’ – offering talking points that (put frankly)
won’t be a mood killer down the
pub. Visitor attractions
will no doubt tick this box fairly easily – although
it does raise a challenge
for places of sadness like war
memorials. But there is potential
for other sectors too. Again, Monzo offers
great examples of how to turn the seemingly mundane into ‘social currency’. Its new coral debit card was recently described by Mashable as “so cool it’s become a chat-up line”! Most of us thought that the bank card’s social currency died with the ‘flexible friend’ tagline in the 90s, but Monzo has proved otherwise.
910 © BVA BDRC 2019
Building the conditions for an emotional response Central to visitor attractions’ success is their ability to create the correct conditions for an emotional response. It doesn’t matter how much you build on the familiar if your customer’s mind is too distracted to notice. The Magna Carta is less likely to inspire awe if the exhibition space is freezing cold, the room is too dark, there are no seats and there are a dozen people impatiently waiting behind you. You may struggle to empathise with the story of the seven year old Roman child if the written description is too long and wordy.
The visitor attractions that deliver high Net Promoter Scores remove the potential for anxieties – in terms of noise, temperature, seating, lighting, navigation, bodily needs and hygiene. They continually set the context through simple explanations, and by meeting different learning styles. Written explanations are usually combined with maps, timelines, audio guides, hands-on interactives and expert volunteers. Their friendly and welcoming staff are great at managing visitor thresholds - from both the outside world to the attraction and within the attraction itself. These are all conditions that other sectors need to get right too.
There’s a Starling on the horizon in every sectorThere are of course some extra considerations when applying lessons across sectors. As stated earlier, some sectors’ brand relationships will have negativity ‘written in’: a mortgage application, last-minute train delays, or bag checks at the airport and so forth. Delivering a positive emotion against this backdrop will be a challenge.
Furthermore, sectors with high-frequency use will find emotional delivery harder to deliver. I travel with Southern Rail over 500 times a year, and it would be a challenge to constantly surprise me and my fellow passengers. Here, creating and maintaining the right conditions will clearly be the focus. Although, that isn’t to say that emotional moments aren’t possible – particularly when the expectations are so low. I clearly remember my delight when Southern introduced free wifi, and even greater delight when I realised it actually worked.
Regardless of the challenges, brands in all sectors need to deliver emotional responses in some form. It’s the only way they can improve their Net Promoter Score and there will always be a Starling on the horizon. When innovators like the neobanks do enter the fray, they change the playing field. Customer expectation rockets and so therefore does the context within which they give recommendation scores. This means that if your brand stands still, your Net Promoter Score is likely to go backwards. Clearly, nobody wants that.
To talk to us about creating peak moments or managing your customer experience, please contact Jon Young. [email protected]
911 © BVA BDRC 2019
w w w . b v a - b d r c . c o m
