Engaged Marketing Blog

Why do we need a consumer Net Promoter Score® benchmarking study in Australia?

By Chris Roberts | August 30, 2010

Everyone knows that customer loyalty and WOM is important, so why do another loyalty study?
We wanted to find out for ourselves the importance customer loyalty and WOM has, specific to Australia.

By doing this we could find out how Australian brands performed relative to their domestic competitors and to their American counterparts. We wanted to find out which marketing medium could break through the clutter in this day and age and which marketing medium had the greatest influence on consumer decision making.

It was also important for us to uncover the business or economic impact of product conversations, such as how many positive and negative comments consumers make about their brands. We especially wanted to determine the degree of influence positive and negative brand comments have on consumer purchase decisions.

In sum, we wanted to know whether there was potential for Australian organisations to grow via WOM.

And the good news is that there is massive potential.

A number of our key findings confirm that WOM is integral for organisational growth:

• 45% of consumers said that WOM was the greatest influence on their purchasing decisions in comparison to other marketing mediums.
• Consumers make a varying number of positive and negative comments across different industries but one thing holds constant - if consumers hear just one negative comment about a brand on average it takes 4-5 positive comments from other people before they’ll consider that brand again. Australian brands clearly have room for improvement as they lagged behind their US counterparts (where comparable).

Based on these findings it’s easy to see that Australian brands have a huge opportunity to grow by better leveraging word of mouth.

There are reports on Banking, Cars, Property Insurance and Motor Insurance.

The reports cover the following topics:

• Which marketing channels have the greatest influence on purchasing decisions

• NPS scores by brand

• Customers reasons for their recommend score

- NEW Word of Mouth insights including the following:

• Number of positive comments consumers make about their own brand

• Number of negative comments consumers make about their own brands

• Number of positive comments needed to neutralise a single negative comment

For more information about the reports please click here

Customer Experience & Supply Chain???

By Chris Roberts | June 15, 2010

When I was first invited to do a guest lecture at the University of Queensland Supply Chain Corporate Education Course. I was a bit perplexed. I normally lecture on customer experience, consumer behaviour, importance of WOM, strategic marketing, branding etc. What does all this have to do with supply chain management? In my mind supply chain was a back office operation not front office. I then remembered a story I heard about an international electronics giant whose NPS scores dropped with their older segment simply because they reduced the font size in their manuals. Then another story came to mind where NPS scores dropped because a new style of TV packaging was not up to the mark. In both instances as NPS is a LEAD and not a LAG measure the organisations could quickly take action and rectify the supply chain issues.

Still I approached the prospect of lecturing about customer focus and experience to a group of people that are not traditionally customer facing with trepidation.

Until I had my own supply chain customer experience and realised the HUGE impact it can have. Let’s look at the steps.

1. Late December 2009 I bought a 27 inch IMac from a reputable department store (not an Apple store). We were told we could expect delivery in 2 weeks.

2. In the 3rd week we were told there was a delay and it would take another 2 weeks.

3. 2 weeks passed and we were now told that they could not tell us when we could expect delivery but it could be 4-6 weeks. At this point the Apple shop was promising delivery in 2 weeks.

4. We rang the Apple shop and they assured us that they could deliver in 2 weeks. We then asked them if they could tell us the status of our order made via the department store. They said sorry, that was another system and they did not have access.

5. We went back to the department store and quizzed them on why the Apple store can deliver in 2 weeks while they cannot even tell us when they can deliver?

6. As a result of this whole process we quickly went from being a promoter of Apple to a Detractor and vented by posting another blog about our experience.

Throughout the process the Department store was extremely helpful and we understood they were caught up in a Supply Chain nightmare. Now the Apple iMac has arrived and is beautiful. Recently we also bought an iPad. But for a while there we hated Apple.

It is clear that organisations now compete on the responsiveness, product availability and prowess of their delivery speed. The supply chain has a huge impact on the demand chain.

Now I can present at the Supply Chain course and know personally how critical it is to have a strong customer focus when designing and managing your supply chain. To ignore the impact of the supply chain on the customer can be disastrous and has certainly earned its place in a comprehensive supply management course.

The video is a snap shot of my small contribution to this excellent course.

Supply Chain Video

How to register

Register online or download the Registration Form from the UQBS Corporate Education website: www.business.uq.edu.au/corporate-education

For further information contact UQBS Corporate Education, telephone - (07) 3346 7111 or email - corped@business.uq.edu.au

Consumer Segmentation in a Recession

By Chris Roberts | September 20, 2009

I was invited to attend a presentation by TNS Brisbane the market research company a few weeks ago. The topic was “How the Global Financial Crisis is Affecting Australian Consumers”.

Prior to this I had attended a few business presentations about the impact of the Global Financial Crisis and how businesses should cope with this new challenge. Typically past presentations about this topic follow the usual sequence of topics as outlined below.

Slides with economic indicators and trends –GDP etc
Quotes from respected financial commentators.
Outlining why this recession unique
No clue as to how long it’s going to last or how bad it’s going to get.
Consumer confidence is low
Consumers will buy less and defer purchases
etc, etc

Pretty ho hum. Effectively these presentations tell you stuff you either already know or can easily read about in the newspaper. You wonder why you wasted your time attending.

But rarely will a speaker cover with certainty and authority exactly what you should do as a business to survive and maybe even thrive in tough times.

My expectation was this would be different and interesting as it was conducted by a respected research company that I have worked with for many years.

As the speaker was setting the scene in the introductory slides it initially appeared as if this presentation was also going to head off in the same old direction.

Economic indicators were displayed followed by consumer sentiment and impact on spending. I started to feel restless.

My concerns were unfounded as the TNS speaker was just setting the scene for the key messages. .

Key Message 1 - Not all consumers react to the Global Financial Crisis the same way.

This was interesting as reading all the gloom and doom in the Media you cannot help but become hypnotised and believe it’s all BAD news.

Key Message 2 - There are two variables that determine how consumers react to the Global Financial Crisis.

The first variable is whether consumers take responsibility for the situation as a Collective (We will come out of this together) or as an Individual (I need to deal with this myself). The second variable is how consumers react to change namely high stress or low stress.

If you imagine this on two axes where on one axis you have responsibility (Collective or Individual) and on the other axis you have ability to deal with change (High Stress or Low Stress).

Based on these two variables they broke up the entire consumer market into 6 segments. In addition they also provided a profile of each of these segments outlining exactly what makes them ‘tick’.

Imagine targeting consumers based on how they react to the Global Financial Crisis! Used strategically the opportunities for business especially in these tough times are absolutely staggering. Imagine if you were in the finance sector and you wanted to determine the key messages messaging you needed to attract investors who were happy to invest in challenging times. Or imagine knowing the communications messages you need to encourage patrons to continue to attend the opera in tough times. As an example one of the segments was quite ‘bullish’ and ‘defiant’ and strongly ‘confident’ about the financial crisis. This segment would be relevant target market for both the above scenarios.

This goes way beyond traditional segmentation methods and the thinking behind this should be applauded.

Of course there is a lot more information about this segmentation methodology and if you would like to know more please contact Damian Hampton Director TNS Brisbane on 61-7-38479800 at their Brisbane offices.

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