Are you bold enough to want to know what your customers think of you?
Customer “Likelihood” Scoring and Why We Can’t Live Without It
Fellow Franchisees,
We now have the answer to the question – “How does the Gold’s Gym Family rate as far as customer satisfaction scores compared to highly rated businesses in other industries?” I’ll tell you in just a bit.
The surveys used with members throughout our system include several “likelihood” questions; among those are – “How likely would you be to recommend us to a friend?” “How likely are you to continue your membership?” And “How is the value you receive for the price you pay?”
Something to consider - Is there such a thing as “bad profit?” According to Fred Reicchheld of Bain and Company the answer is “yes.” Many companies profit from unhappy customers who may be “trapped,” have no other product alternative, or see switching to another product or service as too costly in terms of time, energy, or money. They refer to money paid by unhappy customers as “bad profit” because they will make you pay for mistreating them or trapping them. They may even use the media or the internet to do it. They will at the very least, tell their family and friends. Reichheld goes on to claim that low-scores are “detractors” and in most cases they will cost you more money than their level of spending.
According to Reichheld, there is real correlation between customer scores and profits. In their system of determining a company’s Net Promoter Score (NPS) they can tell if a company is at risk of losing customers because of bad practices and/or behavior or if the business is creating loyal and even evangelical customers. NPS is expressed numerically as a percentage. It refers to the total number of “promoters” of your business when compared to the total number of “passives,” or worse, “detractors.” How would we score overall? How would your gym(s) score? Read on…
In Reichheld’s book, The Ultimate Question, page 20 lists the top 19 performing NPS companies ever measured. They range from +82% in first place (USAA), down to +48% in 19th place (Electronic Arts). Keep in mind that all 19 of these scores are considered very high. These businesses have built up a lot of relationship capital with their customers and those customers don’t want to do business elsewhere. These companies have far more promoters than detractors. There are many cases where businesses are upside down in their score. At the time he wrote his book, AOL was -42%. That’s not a typo; minus 42%! They had way more detractors than they had promoters. They had to dump a ton of money into customer acquisition as they hit an annual churn rate of 72%!
Enter the newly revamped and recharged Medallia program. I know because I was part of the team that did the revamping. If you’re not using Medallia, you should. This customer service measuring system is easy to use, provides you a benchmark for your club(s) and gives real member feedback (if you’re Gold’s Gym enough to take it!) on which you can act to improve your operations.
I just checked the Medallia website and system-wide our customer satisfaction score is +10%. However, it is changing rapidly as the new system is issuing thousands of surveys every day now. Want to know how your gym compares to the rest of the system? It’s in there. Want to know who is the highest rated? It’s in there. Want to know the most improved? It’s in there.
Maybe you want to set up a bonus program for your club reaching the top 5? Maybe the number 1 customer satisfaction spot should have a special award at the convention?
If we are going to be what we have the potential to become, this may be the most critical data you can act upon. Call your RFM and start listening to the candid voices of your members.
Sincerely,
Blair C. McHaney
President of the Gold's Gym Franchisee Association