A lot of people in the NPS/VoC community are fond of benchmarks. Typically, these take the form of comparing scores to their competitors, or even companies outside the industry. If the score of the company’s own programme is higher than what can be observed in the market, the company gets to celebrate. If the score is below the market average, urgent action programmes are launched to prevent the demise of the business.
While there is business case to ensure that your Net Promoter or other score outperforms the competition, there is more to benchmarking than comparing numbers.
Here’s a few tips to help you check that your benchmarks are properly executed:
Remember: benchmarking is about more than numbers.
When conducting benchmarks, most companies look at the score. How is the business performing compared to the competition? But just like with your own Net Promoter or VOC programme, the score is consequence of your actions. If your biggest competitor scores 20 points above yourself, the key question isn’t the score differential, but the reason why the score differential exists.
Action: Every benchmarking program should ask respondents why competing brands scored the way they do and what these brands could do to improve their results. Comparing this data to your own, not only shows whether you are winning or losing the match. It also unearths opportunities to attack your competitors on the weaknesses and inversely, avoid their strengths.
Make sure you compare apples with apples
Benchmarking yourself against the competition assumes that the companies you select for comparison are indeed competitors. This means that they serve a similar set of clients than your own, with a similar value proposition/service. Change one of these two parameters, and the results may misguide you.
This realisation is both restrictive and expansive. It is restrictive, because in your own industry, you want to make sure that you do not compare yourself to the wrong competitors. For example, if you are Kia, it would make sense to look at the likes of Toyota, Honda, Seat and other brands in your category. You would probably be right to question the benefit of comparing yourself to BMW or Lexus.
However, it is also expansive. Today's customers compare experiences across brands and industries. So it is important to understand the experiences that make your customers recommend brands in other industries. Sooner or later, these customers will expect similar service levels from yourself. So in our hypothetical Kia case, fitness instructors and dentists suddenly enter the mix. After all, from a consumer’s perspective there is little difference between scheduling a dentist appointment dentist appointment or making an appointment to get their car serviced.
Action: Make sure you really pay attention to your competitive set, both within and outside of your industry. And if you’re not sure who to include/exclude, sit down with a number of your promoters and ask them. They’ll be happy to help.
Question your motives
Finally, before embarking or continuing some great benchmarking effort, you should question your motives. For many companies, the goal of benchmarking is that they want to be #1 in their industry. But what do you do once you reach that goal? If the number #1 CX player in your industry achieves a Net Promoter or other score of 63%, what number should you to aim for? Is the job done when you hit 65%? Should it be 70%?
Some of the VoC superstars that I know, are starting to challenge the goal of being #1 in the industry. One reason is that they find it increasingly difficult to motivate people to achieve even better experiences once the number #1 spot is achieved. But more importantly, they point out that a benchmark-based objective can distract people from the real goal: to profitably turn every customer into a promoter for the brand.
This isn’t just rhetoric, it’s hard business sense. Even if you’re #1 in your category, there will still be customers who can make you more money as promoters than it would cost to bring them to that point. Every opportunity you miss, is money you leave on the table.
Action: Before embarking or continuing any benchmark, ask yourself the question: What is my motive? If it is to check your performance and get inspired by competitive behaviour across industries, a benchmark can be a great tool. However, if there is a risk that a chase to be #1 turns into an objective which distracts, you should watch out. You may run the risk of being a one-eyed king in the land of the blind.
I hope you consider these tips useful.
Happy benchmarking 😃
About this blog
Whenever inspiration strikes, I use this space to share my thoughts on customer experience management, storytelling or what ever else crosses my mind.