FD Buyer: Playing Off Shopper Buzz
Through a special arrangement, presented here for discussion
is a summary of a current article from Frozen & Dairy Buyer magazine.
The
Net Promoter Score (NPS) has nothing to do with promotion in the sense of endcaps
or price cuts. Rather, it has everything to do with shopper buzz. Here’s
how it works.
Last October, in a special “aisle of the month” section
of the Consumer Intentions and Actions (CIA) Survey, our pals at BIGresearch
asked 8,767 adults aged 18+ about their frozen food shopping habits.
Respondents
were asked to rate, on a scale from 0 (not at all likely) to 10 (extremely
likely), the probability they would recommend the brand of frozen food they
buy most often to a friend or colleague. Ten and nine responses indicate Promoters,
eight and seven responses are Passives, and zero through six are Detractors.
The NPS is calculated by subtracting the percentage of Detractors from the
percentage of Promoters.
In our chart, you’ll see that Ben & Jerry’s
has the highest NPS, at 48.9 percent. That’s really good, considering
that a company like Apple gets something like a 77, said Roger Saunders, managing
director of the Prosper Group of Companies, which runs BIGresearch. The NPS
score can cut both ways, of course. A manufacturer whose brand has a high NPS
might insist that more facings are needed to stay in stock with this “must
have” SKU.
NET PROMOTER SCORESÂ FOR FROZEN FOODS
CHICKEN & TURKEY
Tyson 3.0 percent
Perdue 16.3 percent
Store Brand/Generic (6.2 percent)
DINNER ENTREES
Stouffer’s (20.9 percent)
Banquet (9.8 percent)
Lean Cuisine 11.9 percent
Store Brand/Generic (4.4 percent)
FISH/SEAFOOD
Gorton’s 1.1 percent
Mrs. Paul’s (6.5 percent)
Van de Kamp’s 3.9 percent
Store Brand/Generic (1.2 percent)
ICE CREAM/FZ YOGURT
Breyer’s 31.6 percent
Edy’s 42.8 percent
Ben & Jerry’s 48.9 percent
Store Brand/Generic 7.3 percent
PIZZA
DiGiorno 31.3 percent
Red Baron 16.6 percent
Totinos 4.4 percent
Store Brand/Generic 4.8 percent
VEGETABLES
Green Giant 32.9 percent
Birds Eye 24.2 percent
Store Brand/Generic 5.3 percent
Source: Consumer Intentions and Actions (CIA) Survey,
our pals at BIGresearch
Last October’s research also turned up some unsettling
news about the lack of brand loyalty in certain key categories. Here are the
percentages of shoppers who had “no preference” for a frozen brand
choice by category:
- Seafood, 65.9 percent
- Dinners/entrees, 54.7 percent
- Chicken & turkey, 54.5 percent
- Pizza, 52.7 percent
- Vegetables, 49.9 percent
- Ice cream, 44.8 percent
Within the categories, there was a direct correlation between high “no
preference” percentages and low NPS numbers for store brands. Some 65.9
percent of seafood shoppers said they had “no preference” as to brand,
and private label seafood had a negative NPS. Conversely, only 44.8 percent
of ice cream shoppers said they had no brand preference, and private label
ice cream had a relatively high NPS. Could this mean
that some retailers have given up on producing truly high quality private label
seafood, on the belief that they can’t really make much of a difference
to the shopper? Or that they invest more in coming out with good private label
ice creams because they see them as potential differentiators for their stores?
Note: Net Promoter, NPS
and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company,
and Fred Reichheld
Discussion Questions
Discussion Questions: What does the Net Promoter Score metric tell you (or not) about brand loyalty vs. private label? What do you think of the high level of “no preference” answers given when asked about their choice of frozen brands?
I wonder how these data patterns can be validated. Can we look at brand repeat rates? Perhaps at levels of conversation in social media for these brands? Of course, if the NPS actually correlated highly with volume of conversation, that would suggest that mining conversation online is the less expensive way of getting to the same result.
NPS is a terrific data point to help management understand 1) relative consumer awareness and preferences by brand and 2) identify areas of opportunity for investing (or not) in private label for different categories. Like all data points, particularly those derived from surveys, it can also be misleading and must be taken in context along with other research.
That said, it can be a great in prioritizing relative investment strategies. For instance, the apparent lack of preference for frozen seafood and negative ratings for store brands would indicate that this is not an area that warrants a big investment in time and money for the store. The ratings on ice cream on the other hand suggests that this is an opportunity to expand, promote, and/or develop a line for grocers not currently invested in the category.
Good stuff.
The article sets the stage for the big question regarding Net Promoter Scores…WHY? For this metric to be useful to marketers they must understand what accounts for a brand’s performance.
In other words, there is still research to be undertaken. Variances among categories suggest that consumers’ buying behavior is influenced by different factors category to category. Not surprising. However, if marketers determine what the various influences are and how to manage them…the Net Promoter Score will probably be more in their favor, but probably less important to calculate.
Let’s not get carried away with the usefulness and meaning of NPS.
Do most of us really spend a lot of time “recommending” frozen foods to friends and neighbors? If we do, can we get as enthusiastic about frozen vegetables as we do about ice cream, and if not, does it make any sense to compare the scores for the various categories? Even if we think the generic brands are a better value, would most consumers be willing to admit it? Were consumers really answering the question that was being asked? Isn’t there just a lot more to say about Ben & Jerry’s than the store brands?
You all know better than I do, but how closely do the NPS scores correlate to sales and market share?
Satmetrix, Fred Reichheld, and Bain developed this model a little over 5 years ago. For those who have worked with it, or companies that have put it in play, they know that it is exceptionally useful.
The tool, to be certain, spurs the interest to delve deeper into the Consumers’ behavior and attitudinal thinking. But having an understanding of not only one’s own product, service, or retail establishment, but also that of competitors provides superb leverage points to grow business, and capture added market share.
Do you think that Apple has added pricing power because they have an NPS of 77? Have retail grocers been able to add shelf space to Private Label because they know they have comparable NPS scores to manufactured brands? Are manufacturers altering promotional dates around NPS scores?
You bet they have.
Word of mouth has become an increasingly important media form that has to be included in the media mix. Marketers who don’t pay attention to it, do so at risk to sales, ticket, market share, shelf space, and more. The winners in this battle are proud of the fact that their customers are promoters–they certainly don’t want to have them as passives, or even worse, detractors.
Anybody ever give a recommendation about: The car they love, the golf ball that works magic, the ipad that is a thrill, that airline that took care of everything?
If you haven’t, DO, expose yourself to the NPS methodology, even if you are afraid that the consumer might not rate you highly. It will spur you to take the action that likely should have been taken right along.
I have to wonder how a store brand/generic NPS score can really be meaningful when the quality and presentation vary tremendously from store to store.