April 25, 2014

Measure Customer Loyalty (part 2)

Today's guest blogger is NAHB's Brace Ford bringing us the second part of her two-part blog post about Net Promoter ScoreBrace is the Director of Membership Services for NAHB.  She works with local and state HBA leadership to develop and implement member acquisition, retention and engagement strategies and is the contact person for HBA membership-oriented programs such as Touch, TouchPlus and NPS.  She can be contacted at bford@nahb.org

A Free and Simple Way to Increase First-Year Member Retention

In the last article, I spoke about Net Promoter Score®, or NPS® as a tool many Fortune 500 companies are using to simply measure customer loyalty.  Here at NAHB, the membership department is offering our version of NPS free to any HBA who registers for the 2014 spring and/or fall membership drives.
One of the biggest challenges local HBA’s face is member retention.  Nationally, retention of members in their first year averages 48% and 54% for associates and builders respectively.  Not great, especially when you consider the amount of work that went into acquiring the new member.
With the implementation of NPS, we can give you some insight as to what your new members are thinking, whether they are satisfied with their membership and whether they are at risk for non-renewal.
Here’s how it works.  Once you’ve opted-in to NPS, you’ll upload your HBA’s logo and address (unless you are already a Touch user – we already have your information).  Six weeks after a new member signs up, we will email the member a simple two-question survey customized with you HBA’s logo and contact information. 
Question 1:  “On a scale of zero to ten, how likely is it that you would recommend our (product, service, membership) to a friend or colleague?”
Question 2:  “What is the primary reason for your score?”
As I mentioned in the previous installment, responders will be categorized in to three groups:  Promoters, Passives and Detractors, based on the score they give to question 1.
From the scores your HBA receives, an overall Net Promoter Score is derived.  This single number will give staff and volunteers a good read on how satisfied your newly recruited members are.  Responses to the second question will give you direct feedback from your new members – what’s working for them and what isn’t.
Responder data will be sent directly to the HBA’s.  Armed with this data, an HBA representative can follow-up with these new members and nip any problems in the bud, especially those problems that could lead to non-renewal.  New members that are identified as promoters can, and should be contacted by HBA leadership for further engagement opportunities.  New members identified as passives can be contacted to let them know about ways they can take advantage of their benefits and new member detractors should be called to find out if there is a specific problem and can it be rectified.
If you haven’t already, I encourage you to sign up for the 2014 membership drive here:  nahb.org/2014DriveRegistration
Once you’ve signed up for the drive, you can sign up for NPS at nahb.org/NPSRegistration.
 Using Net Promoter Score can identify the factors that matter most to members and can help your HBA create a plan of action to delight and successfully retain your members. 

Net Promoter, Net Promoter Score and NPS are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.

April 18, 2014

Measure Customer Loyalty (part 1)

Today's guest blogger is NAHB's Brace Ford bringing us the first part of a two-part blog post about Net Promoter Score.Brace is the Director of Membership Services for NAHB.  She works with local and state HBA leadership to develop and implement member acquisition, retention and engagement strategies and is the contact person for HBA membership-oriented programs such as Touch, TouchPlus and NPS.  She can be contacted at bford@nahb.org
Take it away, Brace.......

Significantly Increase First-Year Member Retention Using a Deceptively Simple Tool.
By Brace Ford

I don’t know about you, but my email box is cluttered every day with advertisements, various subscriptions and lots and lots of surveys.  As a marketer, I appreciate the perceived value of surveys, but I hesitate to open them for fear I’ll be committing the next 20 minutes to filling them out.  And once I’ve taken the time to respond, will the company I’ve just reviewed actually do anything with the information I’ve just provided?  Chances are, no.
The problem with the typical customer satisfaction survey is threefold. 

1. They often include questions that have nothing to do with the transaction that took place between customer and company, but instead ask an opinion meant to provide audience preference data for the benefit of advertisers.  For example, “Which of these products would you find most useful?”, “How often have you used the following products?”, “How often do you (read, watch, listen) to the (magazine, TV, radio)?  Clearly these questions do not measure customer satisfaction, but instead give the company some insight as to which advertisers they should pursue.

2. Customer satisfaction surveys are usually much too lengthy and response rates are usually very low.

3. Customer satisfaction surveys measure the wrong thing. 
For a business to experience sustainable growth, it needs to focus on efficiently providing a great product or service and increasing customer loyalty.  If customers love doing business with you and are consistently delighted, they will blog, post and tweet about their experience and the business will gain more customers.  Unfortunately they will blog, post and tweet about each bad experience too.  The power to shape public opinion has shifted from the corporation and its carefully crafted messages to the folks who buy from it or work for it. 
Fred Reichheld understood this and after much research wrote The Ultimate Question in 2006.  In his book, he introduced the concept of Net Promoter Score®, a deceptively simple way to measure customer loyalty and a tool companies can use to help turn detractors into promoters.
The ultimate question, as coined by Reichheld, is this: ”On a scale of zero to ten, how likely is it that you would recommend our (product, service, membership) to a friend or colleague?”  Depending on the score given, a follow-up, open ended question is asked, “What is the primary reason for your score?"

Responders are then categorized into three groups:

Promoters – People who respond with a score of nine or ten are communicating that they are extremely happy and are likely to tell their friends about their positive experience.  An organization should implement ways to recognize these customers and engage them regularly.

Passives – Passives are customers who give a company a score of seven or eight.  These customers are generally satisfied, but typically make few referrals.  They can be easily swayed by competitive offers and are more likely to defect.  Companies should attempt to improve their products and services to the point that these customers become promoters.

Detractors – These are customers with a score of six or less.  They are unhappy with the company and dissatisfied with the treatment they have received.  Their bad experience becomes the subject of conversation among their friends and colleagues and they are likely to register complaints with the company in question.  If they cannot easily switch providers, as in the case of a long-term contract, they often become problem customers, costing the company in time, efficient use of human resources and financial terms.  Companies faced with detractors should try to determine the root cause of the problem, apologize and attempt to determine if the problem can be solved economically.  In addition, the company should resolve to find ways to avoid this type of customer in the future.

Categorization is the first step.  To ascertain a company’s overall level of customer loyalty, Reichheld devised a simple metric: %Promoters - %Detractors = Net Promoter Score (NPS®)

The higher the NPS score, the better the level of customer loyalty and therefore profitability.
Fortune 500 companies such as Intuit, Apple, Enterprise, Zappos and thousands of others have incorporated NPS as the centerpiece of their management policies.  This simple gauge, easily understood at all levels of management, provides an easy way to measure customer sentiment towards the company and the open-ended follow-up question provides the reasons for their feelings.  Used together, companies can define new policies geared towards customer satisfaction, loyalty and retention.
In our next segment, you’ll learn about how you can take advantage of a national program your local can use to bring NPS home to your membership and increase member retention.  And by the way, it’s completely FREE of charge. 
Net Promoter, Net Promoter Score and NPS are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.

April 11, 2014

The "Other" National Election

The National Associate Chairman Election 2014

Every two years, we, as associates, have the opportunity to understand what our candidate(s) for national associate officer, the National Associate Chairman, will be working towards to help our members in general, our associate members in particular.

The National Associate Chairman (see below for description), like the builder National Area Chairmen, is a junior officer and an executive committee member of NAHB.

This is an election year for this position, and chances are great  we will have more than one candidate. Your promises of support because you pledged out of friendship or lack of awareness about a second candidate wasn't presented or because you were told that "it’s this person time" may all be valid reasons to continue your support but only if you want your association leadership elected this way. I would hope, however, you would want to support a candidate because he or she will work towards the goals of NAHB, advocacy being the number one priority, with the associates’ interest blended in. Hopefully your candidate has that in the forefront of their mind. If it is a contested election, you will want to hear from all candidates, and listen to their platform for their two year term. It's the only way to to elect the right person for this level of associate leadership.

Our work as associates at NAHB should be vital work and engaged associate volunteers know that during the course of meetings we need to be serious about our volunteerism, educated about our industry, always sharing productive ideas amongst our peers and engaging all of our members in proactive association intiatives and prepare them for reactive times as well. We should look towards a candidate who can deliver a two way reckoning between senior leadership and our grass roots. There is a time and place for “fun & camaraderie." Be aware that having a good time, while it certainly is a stress reliever, doesn’t pay our bills; successful and profitable business does. During the Associate Members Committee meeting at Fall Board 2014 the candidates will be discussing, publicly, platforms and visons for our collective future. Hopefully during the summer months you'll read about the candidates and gather information that defines them as a potential associate spokesperson. During the Associates members Committee meeting at Fall Boards '14 candidates will speak to the gathered asociates. After they speak to the eligible voters, and questions and answers take place from all that are present, you'll have what true association members have before making a decision; the facts of a leadership path and witness the desire and passion of our next National Associate Chairman. 

NOTE: What is the National Associate Chairman?  This position works with 15 builders, called National Area Chairmen (NAC), through action and guidance, for the priorities of The National Association of Home Builders (NAHB). The 15 NACs have oversight of certain areas within the U.S. and those areas include of multiple states and Puerto Rico. The National Associate Chairman has oversight of two-thirds of our membership, the associate membership. Both the fifteen builders and the lone associate are officers of the corporation known as the National Association of Home Builders.
The National Associate Chairman’s role is designed to bring associate initiatives, questions and concerns to the National Area Chairmen and the senior officers of NAHB (builder leadership). The National Associate Chairman works with builder leadership to understand "all things" that are positive and negative for our building industry and will break down the information, through personal knowledge and staff guidance, and highlight what it means to all associates at the grass roots/ local level. The National Associate Chairman is a conduit for flow of information and is the official spokesperson for associate members throughout the country. If it affects builders it will affect associates. If it affects associates it will affect the vast majority of dues and non dues revenue. This position makes sure that all concerned have a voice.

April 7, 2014

"Investing in Our Future" a message from Greg Ugalde, BUILD-PAC Chairman

Today we have a guest blogger, Mr. Greg Ugalde, NAHB's 2014 BUILD-PAC Chairman. Greg is a volunteer NAHB leader and a builder member from Torrington, Connecticut. He is a devoted family man and a dedicated member of NAHB, working, for all of us, to help all of our members' businesses, and by extension, their families, be better protected by our national PAC's efforts to keep our members profitable. 

Why is BUILD-PAC considered so essentially important to NAHB?
Greg Ugalde, CGP, GMB
President & CLO    
T&M Building Co. Inc.
While the inner workings of Build PAC are complicated and the federal regulations that govern our Build PAC activities must be followed without error, the answer to this question is quite simple. In order for us to gain access to the political process at the level that our organization has come to depend on, we need to appropriately assist our "friends" get elected or to keep their jobs once in office. This assistance is done by correctly contributing to the campaigns of United States Senators and Members of the House of Representatives.

Every Member and potential Member of NAHB, every builder, associate, and staff member at all levels, must keep their eye on the need for us to raise the funds for Build PAC to function "effectively and efficiently".
Everyone needs to participate in the most "meaningful way" that they can afford. Whether it is possible to reach the Capitol Club level, or to simply donate $20 at a local Home Builders event, we need each and every one of you to "step up". There is no better feeling than to read one of our public relations announcements outlining a significant victory for our industry, and knowing that we were an important part in the process!  The perfect example was the Flood Insurance Reform Legislation that passed a few days ago. Our NAHB Members and staff did an incredible job carrying this one over the goal line. However, all of this was made possible by Build PAC opening doors each and every day.
While the incredible success stories generated by "Bringing Housing Home" are still fresh in our minds, please STEP UP for BUILD-PAC!