Net Promoter Score Define Your Survival
Customer loyalty is vital to the survival and growth of any business. That is why many large corporations pay close attention to their Net Promoter Score (NPS), which is a system that measures the loyalty metric that exists between providers and consumers.
Harvard Business Review expounded on the importance of NPS in an article written in 2003 titled “One Number You Need to Grow.” The NPS was introduced by Fred Reichheld (NPS varies from a -100 to +100). He explained that an NPS higher than zero is considered good, an NPS of +50 is excellent, and NPS of +100 means everybody is a promoter. An NPS of -100 implies that everyone is a detractor.
There is a direct correlation between overall client experience with the brand and NPS scoring. The NPS is based on a simple question. How likely is it that you would recommend our company, product, or service to a friend or a colleague?
Companies that enjoy high NPS like Apple have higher client satisfaction, great peer-to-peer feedback, free promotion, and low sales cost.
If your customers are not truly satisfied. should you exist as a business? should you be allowed to continue to perform a poor job, or should you be forced to join the ” no longer in the business lane.”
Below are examples of companies with a high NPS score.
- USAA—Insurance = 80%
- USAA—Banking = 78%
- Costco = 78%
- Apple—Laptop = 76%
- Amazon = 69%
- Southeast Airlines = 66%
Lean Thinking
Technology creates opportunity and abundance, but it surely destabilizes major industries that thought they were safe in the past. Many major taxi companies and individuals that owned medallions worth hundreds of thousand dollars in the past and were securing stable passive income from leasing these medallions to taxi drivers found themselves with worthless medallions because of Uber’s business model.
Uber went quickly from being perceived as a disruptor, to a game-changer, to a global domineering industry force.
Uber’s ability to scale its fleet quickly, empower its customers with a better ride, smart social interaction and safe payment choices made a huge difference in the transportation business. Additionally, Uber leveraged an extremely well peer-to-peer promotion strategy making it the preferred transportation system for city dwellers.
Airbnb used the abundance of supply of residential rooms to create a supply that today exceeds the largest hotel chains in the world. The marginal cost of adding a room digitally to the Airbnb system is virtually zero. However, that is not the case for an established hotel chain, hence, giving a considerable upside to Airbnb. Again, Uber and Airbnb NPS is very high, allowing them to acquire new customers for virtually no cost.
Many significant advertisers are shifting today from billboards and TV content to Facebook, Instagram, and YouTube as they realized that their customer base has moved to a younger generation that consumes news and information using social media rather than traditional television and newspaper mediums.
Selling Dynamics Have Shifted
B2B sales have been affected and will continue to transform and adapt to meet new customer demands. Marketing has morphed from an ad-based to a socially interactive medium that caters unique content to fit its consumer base context. Obscure products that were impossible to get off the ground in the past can virally sell via smart, targeted social networks that cater to risk-takers and early adopters.
Startups with the right marketing strategies are becoming game-changers.
Large competitors’ strategies that revolve around lowering prices to drive a new competitor out of business no longer work. People are looking to buy from organizations that are value-driven and socially motivated.
We have seen many startups that promote their product along with their social responsibility. People love to buy products they need, but they prefer to buy from a company that contributes some of their buying dollars toward a social charity that helps someone or something to achieve a more dignified life.
For example, Tom.com gives as a charity a pair of shoes for every pair sold. Boxlunch.com gives away a meal for every $10 you spend, and theelephantspants.com clothing company donates 10 percent of its proceeds to the African Wildlife Foundation to help fight elephant poaching.
These are companies that promote social causes while doing business with caring for loyal customers. It’s a form of charity that preserves human dignity and pride.
Expertise and Innovation
Beware, sales experts with decades of experience in the field may slow progress. Experts tend to focus on reasons not to take a risk. Experts often draw their thought process from personal and collective experiences. However, experiences are part of the past, while innovation is all about the future, things that have yet to happen, to be created, tested, and tried.
A fresh perspective is often needed to uncover new patterns that an industry expert may not be able to see. Not long ago, it was unthinkable to imagine that computers could drive cars, trains, and space ships.
Tesla is primarily a computer with wheels, and these electric cars are becoming widely accepted by a more significant segment of sophisticated consumers who care about comfort and the environment.
The future will require collaboration between the industry experts and the new creative minds. Better results will require exceptional creativity, technological innovation, and alignment with consumer demand. Nowadays, with information overload, customers must rely again on a salesperson to simplify their decision-making process. The relationship between the salesperson and the customer must be transparent, based on trust and harmony.
Multiple studies have shown that only 10% of the sales force has in-depth knowledge about the product/services they are selling. Fifty percent of the salespeople surveyed demonstrated average technical expertise on their core products, and only 20% of the salespeople surveyed showed a good understanding of the company’s newly launched products. These numbers are indeed not very encouraging, and that’s part of the reason why salespeople are not perceived as real experts in their field.
Size No Longer Matter
For decades, more prominent companies leveraged their scale and size to win more significant market shares. Profitable, large companies were the darling of Wall Street, which triggered CEOs’ egos to seek further aggrandizement by acquiring new companies and market shares.
Salespeople were leveraging their company brand name and market dominance to impress customers and win business. Smart startups catch up quickly by leveraging their boutique-friendly customized solution, exceptional customer care, and lower overhead.
To stay competitive, these larger organizations start sacrificing profit margin to win on sales volume against more creative, nimble smaller competitors. Despite their smaller size, many of these organizations begin specializing in specific industry verticals, making them indispensable to some businesses and eclipsing the competitive advantage of scale and size their larger competitors possess.
Netflix has used a similar strategy that forced Blockbuster to go out of business. Netflix sold convenience and speed of delivery, and Blockbuster focused on the physical retail experience while underestimating customer preferences evolution.
Technology is a force that is changing the market, transforming industries, and destroying old business models.
What has worked in the past may not necessarily work in the future as technology continues to develop at a faster speed. Consumers’ buying behaviors often meet quickly and even exceed current trends in innovation speed. However, salespeople are resisting change and lagging in multiple areas.
To stay relevant, sales professionals and sales organizations will need to hit the reset button often, to allow quick mental reboot and install new thinking and new business models that evolve according to customers’ demands. While salespeople can learn and adapt fast to new requirements, they have limitations.
Salespeople of the future must become growth specialists rather than generalists to stay relevant. A modern salesperson must study the external forces that affect the buyer business and predict market behavior. Buyers of the future will be looking for an edge, and the salesperson of the future should be able to offer them that needed edge, even if it leads to a competitor.
Specialists Wanted
The specialization will become a way to create a depth of knowledge and expertise to meet customer demand. A cardiologist and an OB/GYN are medical doctors, but each has its specialty. A woman who needs to manage her pregnancy, labor, and delivery will need an OB/GYN to handle her health. Similarly, the cardiologist is someone who can handle your cardiovascular system. While these two doctors may have a general idea of the other’s expertise, each one will focus primarily on what they know best. Future selling will need to become specialty-based rather than generality-based. Specialized knowledge and expertise will be crucial to value selling.
Millennials
Millennial salespeople love autonomy, flexibility, and the fluidity of the process. The new millennial sales generation is digitally wired, independent, resistant to authority, and linear top-down style management. Millennials operate well within horizontal structures that permit the exploration of new ideas, encourage creativity, and innovation. This group of salespeople loves when a sales manager provides clear objectives, steps back, and allows people to work to create the intended results.
Millennials accept and love challenges but reject excessive management control and suffocating behaviors. Let me elaborate; millennials know they are smart, able to resolve complex issues, and love to overcome difficult obstacles. They understand the power of networking and tapping into all available resources to get things done.
A controlling manager will suffocate this group to the point of paralysis and will demotivate creativity and innovation.
Millennials thrive in an open and transparent environment that promotes meritocracy and rewards people according to their contributions. Many companies that employ millennials, like Zappos and Facebook, have seen incredible market share gains, more considerable market appeal, and greater consumer trust. Zappos management trusts its employees to deliver customer excellence according to the fundamental precepts that drive their culture.
Millennials will struggle with the advent of technology more than their baby boomers counterpart because the exponential velocity of technological advances will soon exceed the human absorption and adaptation capabilities.
Present machines cannot think or feel yet, but in a couple of decades, they would be able to think autonomously and deliver profitable solutions and business models that maximum efficiency. Would these machines assistance helps sales organizations eliminate the need for salespeople, or would it enhance their existing capabilities and make them more vital to the machine-salesperson-buyer relationship?
Conclusion
Sales technology and internet advent will continue to transform customers’ buying behaviors forcing sales organizations to adapt quickly and continue to stay relevant and survive. Local markets that were shielded from the competition in the past will experience a flood of new small entrants that serve a digital, growing customer base, along with large global companies that will start competing locally via e-commerce.
Many startups with smart marketing strategies will become game-changers. Digital marketing and social platforms will displace a lot of businesses and industries that were deemed safe in the past. Business legacy and size no longer matter: what counts is the business’ ability to meet customer needs using their preferred way of communication and delivery.
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