Generating Growth in a Contracting Economy
Brisbane ,Australia April 12,2009 - Engaged Marketing founder and Director Chris Roberts argues slashing staff to reduce costs may be exactly the wrong thing to do when times get tough.
Mr Roberts said, instead enhancing customer loyalty is critical in a slowing economy.
“Though increasing customer focus rather than cutting costs may seem counter intuitive, when you factor in the incremental loyalty, repurchase rates, and especially word of mouth it makes perfect economic sense,” he said.
Mr Roberts said his analysis of five major Australian industry sectors, using the highly-regarded Net Promoter Score®, strongly suggests many organisations have the potential to increase customer loyalty and business performance.
He said, “The Net Promoter Score asks customers how likely they would be to recommend the company to others.”
“By focusing on improving their customer experience, companies can significantly improve their Net Promoter Score - which is strongly associated with better growth outcomes,” he said.
Mr Roberts said he had surveyed 1501 consumers across five industry sectors - property insurance, banking, mobile networks, online shopping, and health insurance.
“Widely recognised as one of the most accurate measures of customer loyalty, the Net Promoter Score is used by many major organisations including GE, Microsoft, Paypal, Phillips, Sony, American Express, and The Harvard Business Review.”
“It’s popularity is largely due to the fact that it has proven itself to be an excellent predictor of business growth.”
"In general, Australian brands across the five categories performed badly with only 7 out of 31 achieving a positive score.
“Only two brands - APIA and Bendigo Bank - achieved world-class scores.”
“These results strongly suggest that many Australian businesses still have huge potential to grow even in a shrinking economy”
“Bendigo Bank blitzed the banking sector coming in way ahead of giants Commonwealth Bank and National Australia Bank.”
“The survey also put home grown online retailer Oztion ahead of international brands eBay and Amazon.”
The other category winners included APIA in the property insurance industry, Virgin Mobile in mobile networks and HBF in health insurance.
Mr Roberts said there has never been a more critical time for organisations to go back to basics and focus on the customer.
“In tough times customer loyalty is vital - and everyone knows word of mouth is the most effective and trusted sales and marketing channel available to business.”
“Even if overall demand in a category decreases, organisations can still take a leadership role and ensure they position themselves strongly for the future,” he said.
“Customer focus can sometimes seem to be nothing more than courtesy and being nice,” he said. “The reality is that in the current environment, customer focus is an economic necessity.”
The full report outlining scores, key findings by industry, and identifying the drivers of recommendation behaviour is available at www.engagedmarketing.com.au
Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld.
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