Fanatical By Design: How Rackspace Use Net Promoter to Build Customer Loyalty

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Presented at the 2008 Rackspace Customer Conference by David Mitzenmacher - "Fanatical By Design: How Rackspace Use Net Promoter to Build Customer Loyalty"

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  • The NPS concept came out of this book …Based on studies by Bain and Company into customer loyalty and growthIntroduces NPS, the worlds easiest customer loyalty survey.
  • You can see Rackspace here with a score of around 50%. IBM Hosting comes in second at around 15%, followed by Amazon and Microsoft’s cloud offerings, both at under 10%.You will also notice that several companies in our industry have negative NPS. This means that they have more detractors than promoters. This is not entirely uncommon. It is important to know your industry. If your company has an NPS of 20% in the cable TV industry, which has an average NPS of -12%, then you are doing pretty good. If you have an NPS of 20% in the luxury cars industry, where the average NPS is 40%, then you are in a bit of trouble.Talk about the competitive moat.
  • Buy In is disproportionally importantInstruments – Online vs. Phone vs. Paper (Rackspace has used a combination of Online and Phone. For us, there was very little skew between the two in terms of score, but phone had a higher participation rate). Don’t forget firmographic/psychographic questions.Have a plan for how you want to slice your data – we use criteria like purchase influence, revenue, and tenure to get actionable insightSet a repeating cadence – this can’t be the yearly census. Out of sight, out of mindUnderstand your industry landscape to understand what “winning” meansNPS as an operating system – avoid Big Binder Syndrome!
  • Fanatical By Design: How Rackspace Use Net Promoter to Build Customer Loyalty

    1. 1. Fanatical By DesignHow Rackspace Uses Net Promoter to Build Customer LoyaltyPresented By:David MitzenmacherDirector of Support ProgramsRackspace Hosting
    2. 2. 2Agenda• Introduction to Net Promoter Score (NPS)• How Rackspace Uses NPS• How to Roll-Out NPS in Your Organization
    3. 3. 3Introduction toNet Promoter ScoreMethodology
    4. 4. 4
    5. 5. 5How likely are you torecommend _______ toa friend or colleague?
    6. 6. 60 1 2 3 4 5 6 7 8 9 10
    7. 7. 70 1 2 3 4 5 6 7 8 9 10Promoters
    8. 8. 80 1 2 3 4 5 6 7 8 9 10Passives Promoters
    9. 9. 90 1 2 3 4 5 6 7 8 9 10Detractors Passives Promoters
    10. 10. 10Calculating Your Net Promoter Score
    11. 11. 11Net Promoter at Rackspace
    12. 12. Hosting Industry12-30%-20%-10%0%10%20%30%40%50%60%
    13. 13. 13We Use NPS to …• Operational– Better manage our customer relationships– Manage performance– Understand the impact of change• Strategic– Understand customer segmentation– Prioritize investments– Track industry dynamics
    14. 14. 14Rolling Out NPS In Your Organization
    15. 15. Keys to Success• Buy-in is key!– From executives and the front lines• Choose the correct survey instrument• Create actionable customer segments• Set a repeating cadence• Understand your industry landscape• NPS as a business operating system15
    16. 16. 16Q & A
    17. 17. 17dmitzenm@rackspace.com

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