It seems like no self-respecting blogger right now can write without making some reference to the Great Depression of 1929. After all, the media has stood pretty firm over the last 6 months in taking a position that we are facing "deja vu all over again."
I'm not going to use more virtual trees debating that assertion. If you think we are in the Great Depression again, save me a spot in the soup line at central park. I'm not going to talk you out of it, but I don't see the data to support the argument we are there - yet.
What IS expected at this time of the year is a series of predictions for 2009. The trick here is to stay close enough to the obvious to make a series of prognostications that are almost certainly going to be true, together with a couple of wildcards nobody can really prove as false. I feel like I'm up to the challenge.
Customer retention is fashionable in marketing circles. A recent study by the Marketing Executives Networking Group tracks buzzwords and puts "customer satisfaction" and "customer retention" at the top of their list. I'm not sure what that means but it can't be bad news for Net Promoter. I do think that M.E.N.G could work a little on their own title; feels like one of those bad-guy organizations from the 60's like C.H.A.O.S. or S.P.E.C.T.R.E. But I digress. Let's not let the absence of data prevent speculation: marketing budgets are compressed (there's one of my "obvious" predictions) and combined with customer budget compression we are essentially bidding up the economic value of existing customers. Not in absolute terms necessarily, but certainly relative to new customer driven growth.
We know, however, that companies going into this scenario with higher NPS are more likely to be able to capitalize on this trend. Worse news for the laggards, a new found focus on customers is often confounded by a time lag before customers forgive prior sins. So if you start behind, don't expect a quick turnaround.
Based on this, we should see the gaps increase between leaders and laggards as the former takes advantage of what is essentially a head start. The relative NPS of competitors will open up wider.
What about absolute scores? I would expect them to drop in a recession although the data is not yet clear to verify this assumption. Customers under budget pressure become more value-conscious and generally more demanding. Layoffs stretch resources. Put another way, there is an absence of factors likely to result in scores naturally improving, so it's a possibility that they will move the other way. If companies in a "boom" - and pretty much every year up to 2008 will look like that with hindsight - couldn't improve their NPS significantly, how will they do so in a recession/depression? This therefore fits the perfect profile for another 2009 prediction.
What does this mean for your NPS program? I "predict" the following:
1. Companies that didn't care historically about NPS or customer loyalty/retention are likely to look more seriously at it as part of an overall change in emphasis to retention;
2. Those who are already laggards are unlikely to be able to mastermind a massive come back strategy in the short term. The best they can accomplish (and it's still worthwhile) would be to set themselves up to get it right on the next upswing, assuming it's only 12-18 months away.
3. If all your goals are absolute NPS, you may face a headwind accomplishing these results. If management understands this, expect pressure to move the goalposts. Management may seek to lower expectations, probably by more than the net effect of the recession (which will only be obvious in hindsight) so be careful you don't let yourselves completely off the hook. Furthermore, the recession impact is likely to be industry specific. Seems like a vague prediction, but that's what we "predictors" do to provide wriggle room later.
4. If your goals are relative to your competitors, recalibrate through proper benchmarking now and possibly every 6 months. The landscape is pretty volatile.
In all seriousness, I wish you the best of luck in 2009 and see you at the conference in a few weeks.