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NPS Sample Presentation
- 1. SWISS ARMY KNIVESCUTLERY TIMEPIECES TRAVEL GEAR FASHION FRAGRANCES | WWW.VICTORINOX.COM NPS Sample Survey at Victorinox AG By: Victorinox AG By: Marshall Anderson
- 2. Presentation Purpose • ProvideVictorinox with initial NPS data. • Share findings from NPS sample survey. • Provide a summary of activities conducted during internship project with Victorinox. 2
- 3. Background: Victorinox AG •1884 Karl Elsener opens a cutlery shop in Ibach, Switzerland. • 1891 Karl Elsener and coworkers deliver knives to the Swiss Army. • Present CEO, Carl Elsener IV. • Victorinox is most well known as the maker of the “Original Swiss Army Knife.” • Victorinox has recently added other product departments. • Timepieces in 1989 • Travel Gear in 1999 • Fashion in 2001 • Fragrances in 2007 3
- 4. SWISS ARMY KNIVESCUTLERY TIMEPIECES TRAVEL GEAR FASHION FRAGRANCES | WWW.VICTORINOX.COM THE INTERNSHIP PROJECT
- 5. Internship Project Background •Historically Victorinox AG sold all product through wholesale in a B2B setting. – In 2001 strategy moved the company to explore the realm of selling direct to the consumer (D2C) as well. • As such, some form of customer feedback tool will be important for the sustainability of Victorinox in the D2C market. 5
- 6. Internship Overview • DirectAdvisor: Markus Neawie. – Global Retail Operations Director. • Assistant Advisor: Kilian Eyholzer. – Global Head of eCommerce. • Internship Position Title: Retail Trainee. – Located in the Retail Department at the Victorinox headquarters in Ibach, Switzerland. 6
- 7. Internship Project • AdvisorMarkus Naewie desired to test the feasibility of the customer feedback tool NPS at Victorinox. – My project was to run an initial test of NPS at Victorinox. 7
- 8. Internship Overview Continued •The foundational element to the internship was an expository thesis paper. – It was recommended by Kilian Eyholzer that a thesis paper be composed to capture the project conducted for internship. 8
- 9.
- 10. Internship Project: Whatis NPS • The term NPS was first coined by F.F. Reichheld in an article written for the Harvard Business Review. – NPS: Stands for Net Promoter Score. 10
- 11. What is NPS:The Ultimate Question • To calculate an NPS, data is collected by asking customers the ultimate question, “on a scale from zero-to-ten how likely are you to recommend company X to a friend or colleague?” – This question has been researched and responses to this question were shown to be the most predictive of customer behavior (Markey & Reichheld, 2011, p.50). 11
- 12. What is NPS:Sustainable Growth • Premise: Customer loyalty and customer referrals lead to sustainable profits. • NPS Survey system focuses on categorizing customers based upon loyalty and likelihood to refer someone to the business of interest. • By measuring word of mouth and customer loyalty NPS is predictive of future growth and profitability. 12
- 13. Internship Agenda 13 • Whatis NPS? • Why and how can NPS grow Victorinox? • How to implement NPS at Victorinox? Introduction • Prepare questionnaire. • Create store sample. • Create electronic sample. Survey •Aggregate results. •Present results to Makus and Kilian. •Identify key topics. •Offer recommendations for action. Results Examination • Proposal for general roll out.Outlook
- 14. Internship Project: WhyNPS? • Global Retail Operations Director, Markus Naewie, selected NPS as a sample project after reading multiple pieces of literature on the system. – Many pieces of literature indicate the Net Promoter system leading companies to profitability. 14
- 15. What is NPS:Using the Zero-to-Ten Scale to Categorize Customers. –NPS=%Promoters - %Detractors.
- 16. What is NPS:Calculating a Score Detractors 20% Passives 40% Promoters 40% Customer Base (40% Promoters)-(20% Detractors)=NPS 20%
- 17. Why do CompaniesUse NPS • Using NPS can reveal where a company is earning “bad profits.” – Bad profits are areas of a business where a company may be making money, yet hurting customer loyalty. • i.e. High extra fee‘s charged by banks or phone service providers. 17
- 18. Why Use NPS:Bad Profits 18 New process or product that increases profit. Loss of customer loyalty. NPS Results
- 19. What is NPS:Using the System • Companies seek to categorize their customers based on customer responses to the ultimate question. • The Authors advise companies to ask customers how to improve their loyalty. 19
- 20. Follow Up Question 20 “Whatis the primary reason for your score?” -Suggested by Reichheld (2011), (p. 4). “How could our company improve your score?” “How might our company be able to increase your loyalty?”
- 21. Closing the Loop •It is important to “close the loop.” – This means taking action based on recommendations. • Invest in areas or departments with a low NPS • Contacting detractors to hear from them. 21
- 22. Internship Project: Goals •Run sample NPS Survey. – Gather results. – Gain experience for future implementation of the Net Promoter System at Victorinox. – Calculate initial NPS for Victorinox. 14
- 23. Internship Project: Approach,Two Survey Types • Survey Type: Transactional – Gauge customer loyalty based off of bottom up approach. • Survey Type: Relational – Gauge customer loyalty based off of a top down approach. 23
- 24. Approach • Transactional Survey –Personally approach customers. • Ask them, «the ultimate question» and «how can Victorinox improve?» – This approach was taken in order to achieve high response rates • Observe first hand how the survey process was received by customers. • Relational Survey. – Email Approach • Recipients:1,000 customers from Victorinox customer database (CDB). – This approach was used to obtain responses from a wider population than could be reached in person.
- 25. SWISS ARMY KNIVESCUTLERY TIMEPIECES TRAVEL GEAR FASHION FRAGRANCES | WWW.VICTORINOX.COM NPS Sample Transactional Survey
- 26. Results By Store Brunnen NPS76% • Response Rate: 77%. • Number of Respondents: 67. – Days in store: 5. Zurich Flughafen NPS 62% • Response Rate: 83%. • Number of Respondents: 66. – Days in store: 4.
- 27. Determining Customer Composition •The following slides show the customer composition that produces an NPS for each store. • There is also a projected customer composition. – This projection is based on Reichheld’s suggestion to fight response bias by scoring non-respondents as a fifty/fifty mix of promoters and detractors. 27
- 28. Brunnen Customer Composition 28 3% 13% 18% 26% 79% 62% SampleCustomer Composition Projected Customer Composition Actual vs. Projected Promoters Passives Detractors NPS=49%NPS=76%
- 29. Zurich FH CustomerComposition 29 5% 11% 29% 32% 67% 58% Sample Customer Composition Projected Customer Composition Actual vs. Projected Promoters Passives Detractors NPS=47%NPS=62%
- 30. Combined Results ofIn Store Survey • NPS: 69% – Responses: 133 • Response Rate: 80%
- 31. Combined Transactional Results 31 4% 12% 23% 28% 73% 60% SampleCustomer Composition Projected Customer Composition Actual vs. Projected Promoters Passives Detractors NPS=48%NPS=69%
- 32. Results: Grouping SuggestionsBy Category • Four categories were used to organize all responses. – The Categories. • Improve Facilities. • Improve Product. • Improve Communication. • Other. 32
- 33. Grouping Suggestions ByCategory • Brunnen • Zurich FH 33 Improve Facilities 64% Improve Product 18% Improve Commun ication 0% Other 18% Suggestions By Category Improve Facilities 62% Improve Product 8% Improve Communica tion 15% Other 15% Suggestions By Category *All suggestions came from surveys conducted in English, for Zurich FH
- 34. Grouping Customer Feedback:Combined Results 34 Improve facilities 62% Improve Product 13% Improve Communication 8% Other 17% Suggestions By Category
- 35. Where Victorinox canclose loop. • Brunnen – Add chairs in the basement for the elderly. – Lower prices. – Place sign by stairs, «Elevator available upon request.» • Zurich Airport Store – Add a display to clarify carry-on rules for pocket knives. 35
- 36. Key Topics • GiveZurich airport customers time to use the product. – Often new to Victorinox. • Contact information. • Most likely, store staff will not be used to survey customers. – Not enough time. – Customer may feel the good service was not genuine. – Avoids manipulated results.
- 37. Key Topics • Translatesurvey into Italian and Mandarin. – Capture more customer responses. • Accommodate specific customer bases. – Brunnen: Swiss natives and elderly. – Zurich airport: Chinese. 37
- 38. Key Topics • SurveyWeaknesses and Flaws. – Only two locations. – Short collection period. • Insufficient data for economic validation of NPS system at Victorinox. – No response plan established to close the loop. 38
- 39. SWISS ARMY KNIVESCUTLERY TIMEPIECES TRAVEL GEAR FASHION FRAGRANCES | WWW.VICTORINOX.COM NPS Sample Relational Survey
- 40. Relational Survey • Datagathered from email survey. – Break Down • 1,000 received the email – 400 from London CDB – 400 from Geneva CDB – 200 from Brunnen CDB • Recipients chosen at random.
- 41. Relational Survey • Byrequest more questions were added to this survey. – Questions added: • How many times did you make a purchase from Victorinox in the past 12 months? • What type of item did you last purchase from Victorinonx? • How satisfied were you with this item you purchased?
- 42. Results • NPS= 76% –Response Rate: 9% 42 Detractors 2% Passive 20% Promoters 78% Customer Composition • Meta analysis on 45 surveys found that the average response rate was 6-15% (Jin, 2011, p. 76). • Reichheld (2011) suggest that NPS surveys achieve an response rate of 65% or better (p. 110).
- 43. Grouping Suggestions ByCategory 43 Improve Staff/Service 19% Improve Clothing 11% Improve Communication 12% Create Promotions 12% Other 19% Improve Products in General 27% Suggestions By Category
- 44. Key Topics • VariedNPS – Scores by CDB • London: 58% • Geneva: 75% • Brunnen: 87% – Indicates need for region specific NPS targets. • Varied needs for improvement. 44
- 45. Key Topics • SurveyFlaws and Weaknesses. – Average response rate: 9% • Meta analysis on 45 surveys found that the average response rate was 6-15% (Jin, 2011, p. 76). – Response rate by CDB • Brunnen: 19% • London: 6% • Geneva: 7% – No response plan established. 45
- 46. Key Topics • CustomerPurchases 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% SAK Cutlery Timepiece TRG Fashion Fragrance Purchase History by CDB Brunnen London Geneva
- 47. Other Findings 47 0% 5% 10% 15% 20% 25% 30% 35% 40% 0 1or 2 3 or 4 5+ Purchases in the Past 12 Months Purchase Frequency NPS = 100%* NPS = 73% NPS = 71% NPS = 79% * This score was calculated with only 5.56% of the data which is only 5 total responses.
- 48. SWISS ARMY KNIVESCUTLERY TIMEPIECES TRAVEL GEAR FASHION FRAGRANCES | WWW.VICTORINOX.COM FORESEE RESULTS
- 49. Statistics • Number ofrespondents = 3,785 – Collection Period: 1 Year – Response Rate: Unknown • Response Rate for the first 6 months of the survey was 45.58%. 49
- 50. ForeSee Results: Scalediscrepency 50 Detractors 12% Passive 23% Promoters 65% Customer Composition NPS=52% • Responses to the ultimate question were collected on a 0 to 100 scale for the ForeSee survey. • In order to calculate an NPS these scores were rounded.
- 51. ForeSee Results: ScaleDiscprency 51 Detractors 21% Passives 32% Promoters 47% Customer Composition NPS=26.8% • I rechecked this and calculated an NPS without rounding the scores to fit a 0- 10 scale.
- 52. Key Topics FromForeSee Results • Contingency Analysis – Regions Specific NPS • Regression Analysis – Top Predictors of customer loyalty based off of site visit for Victorinox.ch. 52
- 53. Contingency Analysis • ContingencyTest – 27 countries with the most responses were selected for this test, so that there was sufficient data for each country. • These 27 countries represented 75% of all responses. – Chi Squared Test – Ho: There is no relationship between a persons likelihood to recommend Victorinox and their country of origin. – Ha: There is a relationship between a persons likelihood to recommend Victorinox and their country of origin. The test produced a Chi squared result of 502 exceeding the test value of 78.16. Conclusion: Do not accept the null hypothesis. 53
- 54. Multiple Regression • MultipleRegression Test – Y variable: Ultimate Question – X variables: • Satisfaction* • Look and Feel • Navigation • Product Browsing • Product Images • Brand Commitment • Brand Confidence • Communication on Social Network • Purchase Products in the Future *Satisfaction variable was removed from the test as it was shown to have multicolinearity with the other variables. 54
- 55. Multiple Regression: Amountof Variables Required Two Initial Separate Tests • Test 1 – Y variable: Response Value to Ultimate Question – X variables: • Look and Feel • Navigation • Product Browsing • Product Descriptions • Product Images • Site Performance • Test 2 – Y variable: Response Value to Ultimate Question – X variables: • Satisfaction • Brand Commitment • Brand Confidence • Likelihood to Communicate Victorinox on a Social Network • Purchase Products 55 Green highlighted x variables represent top predictors for each respective test.
- 56. Multiple Regression: TopPredictors of the Ultimate Question Response 56 Coefficients Standard Error Intercept 13.5907 1.7068 Look and Feel 0.1285 0.0203 Navigation 0.1338 0.0173 Product Browsing 0.0641 0.0174 Product Images 0.0596 0.0193 Brand Commitment 0.2198 0.0114 Brand Confidence 0.3189 0.0136 This model predicted 47% of the variation in a respondents answer to the ultimate question. Figures below are for a scale of 0-100.
- 57. ForeSee Results • 57%of respondents offered some form of a suggestion or comment. • A key word search was conducted with the free response question that asked “what is the one thing we could to to provide a better online experience?” • Three categories were searched. – Visual – Information – Shopping 57
- 58. ForeSee Results: GroupingSuggestions • Percentage of all suggestions regarding a certain category. – Visual: 25% – Information: 17% – Shopping: 17% 58
- 59. Suggestions from ForeSeeResults • Determine single scale to use so all results are comparable. • Shorten Survey to increase response rate. – Past Survey had 18 questions. • Develop region specific NPS targets. • Victorinox needs to focus on increasing brand confidence and brand commitment in order to increase customer loyalty. • Respond to customer demands in the categories of, information, visual, and shopping. 59
- 60. SWISS ARMY KNIVESCUTLERY TIMEPIECES TRAVEL GEAR FASHION FRAGRANCES | WWW.VICTORINOX.COM MOVING FORWARD WITH NPS
- 61. Suggestions • Set groundwork for NPS return on investment (ROI). – Longer Collection Period • Multi regression with financial data. – More Data • Track profitability behavior. • Develop Response Team – Track impact of closing the loop. • Sales • NPS 61
- 62. Suggestions • Region SpecificNPS – Contingency analysis. • Continuous communication with store managers. – Feedback forum. – Provide storemangers with a small budget for closing the loop. 62
- 63. Suggestions • Survey Language –Mandarin and Italian as well. • Customer Contact – Instore tablet computer – Actively seek customer contact infromation. • Send survey shortly after contact. • NPS is good, but not everything. – HomeBanc 63
- 64. Store Manager Feedback •Brunnen – Survey customers in a less formal way. – From past experience there is a large demand for more childrens products. • «My first Victorinox timepiece.» • Zurich FH – Gaining customer feedback was good, surveys should be conducted maybe once a month. – Online customer survey may have a lower response rate, however feedback may be more detailed. 64
- 65. How are OtherCompanies Surveying Customers. • Enterprise surveys customers by calling them. (Markey & Reichheld, 2011, p.109) – Response rate for customers who pick up the phone, 95%. (Markey & Reichheld, 2011, p.109). • An in depth query in an online database for my University yielded little results reporting on survey forms commonly used by companies. • Many of the companies Reichheld reports on acquire customer contact information as a part of conducting business. i.e. Enterprise, Allianz, and Rackspace. – This makes surveying their customers more feasible. 65
- 66. Suggestions: Typeform • Onlineform building software. – Free for basic features – 18.00€/Month for upgrade – Create, distribute, and analyze. • Survey: https://marshall.typeform.com/to/xFNpwE • Store Manager Forum: https://marshall.typeform.com/to/sBV9Mn 66
- 67. Suggestions: Typeform • WhyTypeform – Written in the language of the customer not the researcher. – Provides functionality for Victorinox. – Gathers data efficiently. – Interactive features may increase response rate. – Delivers plus one. 67
- 68. Outlook • Victorinox hasa strong reputation. – Customers are willing to provide feedback. • The NPS porcess brings Victorinox closer to customers. – Provides insight on how to serve customers. – Helpful for navigating the D2C realm. 68
- 69. Conclusion • Internship: Project –Process provided experience to reference for future use of NPS. – Insight was gained on using the Net Promoter system with Victorinox and their customers. – Data was collected to calculate an initial NPS for Victorinox. • Internship: Personal Lessons Learned – Create more flexibility in a project schedule. – Spend more time working with the data collected. – Meet with advisors consistently to receive feedback on progress. – Present project to other colleagues to receive feedback from an outside prospective. 69
- 70.
- 71. Thank you foryour time. 71
Editor's Notes
- #4 http://www.victorinox.com/us/content/history_page
- #10 The Ultimate Question 2.0 is a book written by F.F. Reicheld regarding the net promoter system. This book provided the information necessary to educate someone over the net promoter system.
- #11 Bain & Company conducted a study on 12,000 companies in twelve developed emerging economies, the study found that only nine percent of these companies achieved real sustainable growth in terms of profit and revenue growth of over 5.5 percent per year over a ten year period from 1999-2009 (Markey & Reichheld, 2011, p. 29). Reichheld (2011) discovered that the Net Promoter score of these companies that achieved such growth was on average 2.3 times higher than other firms in their respective industries (p. 42).
- #13 Bain & Company conducted a study on 12,000 companies in twelve developed emerging economies, the study found that only nine percent of these companies achieved real sustainable growth in terms of profit and revenue growth of over 5.5 percent per year over a ten year period from 1999-2009 (Markey & Reichheld, 2011, p. 29). Reichheld (2011) discovered that the Net Promoter score of these companies that achieved such growth was on average 2.3 times higher than other firms in their respective industries (p. 42).
- #16 English: The Ultimate Question, which the survey is based on is, “How likely are you to recommend our products or services to someone else?” In order to categorize customers companies ask the Ultimate Question using a 0-10 scale. Promoters are those who answer 9,10, passives 8,7, and detractors, 6 and below. The concept of NPS assumes that promoters will be loyal to a company and make referrals, passives like the business but may leave with little persuasion, and detractors are spreading negative word of mouth about our company. German: Die ultimative Frage , die Umfrage basiert auf : "Wie wahrscheinlich ist es, dass Sie unsere Produkte oder Dienstleistungen an jemand anderen empfehlen? " Um den Kunden Antworten zu kategorisieren , ist die Frage nach einer Skala von 0 bis 10. Promotoren sind diejenigen, die 9,10 zu beantworten, der Passive 8,7 , und Kritiker , 6 und unten. Das Konzept der NPS davon aus, dass Promotoren loyal zu einem Unternehmen zu sein und Verweise, passive Kunden leicht ändern Unternehmen, und Kritiker sind über unsere Firma verbreitet negativen Mundpropaganda.
- #17 English: This is an example of where a company’s NPS would come from. German: Dies ist ein Beispiel dafür, wo NPS eines Unternehmens kommen würde
- #18 Picture Reference: https://www.google.com/search?q=chain+link&espv=2&biw=1209&bih=635&source=lnms&tbm=isch&sa=X&ei=78JjVNzVLcOnyASL64KwBw&ved=0CAYQ_AUoAQ#facrc=_&imgdii=_&imgrc=dxFBZQ0MTTh3QM%253A%3Btm4LcR0l5BhFIM%3Bhttp%253A%252F%252Fwww.photosinbox.com%252Fdownload%252Frusty-chain-link.jpg%3Bhttp%253A%252F%252Fphotosinbox.com%252Fphotos%252Frusty-chain-link%3B5000%3B4000
- #21 (Markey & Reichheld, 2011, p.4)
- #29 The projected total is achieved by scoring non-respondents as a fifty/fifty mix of passives(7 or 8) and detractors (6 or below).
- #42 The question inquiring of the number of purchases made was added to the survey to track the behavior of the respondents. The question inquiring of satisfaction for an item recently purchased was added as a result of Enterprise’s success with such question. Surveyors for Enterprise found that customers responses to “Were you completely satisfied with your last car rental?” predicted 86% of the variation in customers purchase behaviors (Reichheld, 89).
- #55 Two multi regression tests were run because there were so many variables. The top predictors from each test were then run together, to produce the overall top predictors.
- #57 The test showed that the variables seen above predicted 47% of a respondents answere to the ultimate question. The highlighted figures have the highest impact.