deliver lucrative, sustainable growth – operate at NPS effi ciency ratings of between 50 and 80 per cent. Indeed, companies that achieve long-term profi table growth have Net Promoter Scores two times higher than the average company, while NPS leaders outgrow their competitors in most industries by an average of 250 per cent. In addition, a 12-point increase in NPS has been shown to lead to a doubling in company growth rate. Any company or sector with a negative score is, in effect, consistently creating more Detractors than Promoters, and will therefore struggle to sustain profi table growth no matter how aggressively they acquire new business.
‘Satisfied’ is not enough There can be no doubt that a score of 21
per cent leaves much room for improvement, but how does the leisure/ health and fitness industry compare with other UK sectors? Our score seems reasonable, even positive, when compared with some of the current European NPS averages for industries such as banking, car insurance and internet service, and it is in line with the averages for industries such as computer hardware and mobile phone handsets (see chart opposite). The problem is that the sectors
mentioned above are known for and rated on their product. As a customer- facing industry, our service is our product. It’s what we should be known – and recommended – for. Yet we lag way behind the NPS market leaders in terms of service delivery. Companies like Apple and Amazon, which rely on positive interactions with customers, regularly get scores of 70 per cent or higher. The industry’s score is perhaps
not surprising when you look at the issues it has with customer service and retention. Service sectors with high customer face-to-face interaction, combined with community bases that make recommendation and referral more important, are the ones that fi nd it harder to score highly – and this highlights one of the key messages from
may 2011 © cybertrek 2011
A smile can be deceptive: 80 per cent of members who said they were ‘satisfi ed’ in a survey left that service within a 12-month period
the survey. Having ‘satisfi ed customers’ just isn’t enough any more. When Bain and Satmetrix were carrying out the research that led to the development of NPS, they tracked customers who stated they were ‘satisfi ed’ with their product/ service to see how many of them left that service within a 12-month period. They discovered that, on average, 80 per cent of ‘defectors’ leave despite the fact they would class themselves as satisfi ed. This fi gure explains a lot for operators
in the leisure/health and fi tness sector wondering why retention is such a problem when satisfaction surveys are good and customers relatively content. Satisfaction differs hugely from loyalty, and what the fi rst industry NPS survey highlights all too clearly is that we are not yet creating that loyalty – loyalty that in turn would create Promoters.
Hitting the spot
“The study provides an insight into how much work we have to do as an industry, but it also provides a great platform from which to move upwards. NPS is used in many industries and there are lots of case studies providing methods of ‘moving the score’, improving both customer satisfaction and the culture of an organisation,” explains MD of The Retention People, Alister Rollins. “TRP and Leisure-net have adapted these processes for the active leisure market to help operators create raving fans among their customers.” To cut the number of Detractors and
turn Passives into Promoters, the fi tness industry must develop a service that hits the right spot in customers’ heads and hearts. In other words, it’s time we appealed to both their sense of reason and their emotional drive. Our sites should have the best features, services and price, but also leave customers
feeling as though we know them, value them and above all listen to them. Like any good metric, NPS presents
challenges. Companies must spend a signifi cant amount of resources gathering and reporting reliable data. They must track variations in NPS and understand how and why customers react as they do to their products and services. They must also understand the causes of variations in NPS using surveys, fi eld observations and analysis of customer comments to identify problems and opportunities. Lastly, they need to quickly address those problems and opportunities, holding management teams ultimately accountable for improving their score. NPS is more than a metric; it’s a set of
disciplines designed to help organisations understand customers and drive strategy and operations. Companies need to learn these disciplines, not just the metric itself. The old vital statistics – net profi t and the like – tell companies how they are doing fi nancially. The new one, as more and more companies are understanding, helps them understand what their customers really think of them and whether they will drive or throttle profi table growth. In the long run, that may be even more important for a company’s health.
MORE INFORMATION For further information on customer insight services and NPS, contact Mike Hill at
mikehill@leisure-net.org For further information on customer experience and retention services including NPS, visit
www.theretentionpeople.com
healthclub@leisuremedia.com mike hill, md, leisure-net solutions
Read Health Club Management online at
healthclubmanagement.co.uk/digital 51
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