Net Promoter Community

Are there economic benefits for Net Promoter? Yes, according to Satmetrix's Dr. Laura Brooks, one of the co-developers of Net Promoter. So what is the economics of Net Promoter?

Well, first, there is measurable economic impact from promoters as well as detractors. Straight to the punch line: On average, the relative economic impact of promoters who recommend is that they bring in additional $565 in revenue and while detractors are responsible for $701 in lost revenue. This is from a sample of B2B software companies. This data was calculated by understanding the number of referrals or negative comments these folks gave.

So promoters bring in more revenue through word of mouth marketing, but they are also a driver of revenue growth while detractors are drivers of lower growth. No surprise here. In addition, promoters total value is much more then detractors. Again, no surprise. What I found most interesting with all these benefits of promoters – they are also have a lower cost to serve. So they cost less and are more filling!

Laura talked about important to amplify promoter community through customer testimonials, inner circles, and special communities to further cement the relationship. While there is a lot of attention given to detractors by most customers it is the smart companies are also figuring out how to leverage these promoters through the power of Word of Mouth.

The last word on economics is that committed Net Promoter companies see financial gains. On average, with B2B companies studied, they experienced 23% revenue growth over a 3 year time frame, with an average 9% gain in Net Promoter.

What I wonder, with data like this, why aren’t all companies using Net Promoter?

So here we are - a room full of people with our eyes closed pointing where we think north is - hands pointing in every direction. Andy Brierley, Project Director of De La Rue, is up on stage, telling us that our random and varied pointing about sums up De La Rue’s customer focus strategy before they embraced the (Net Promoter Score) NPS.

Andy’s talking about how they have harnessed employee ideas to dramatically improve customer experience reflected in turnaround in NPS figures (UK) from -34 to +34, and made productivity gains of £38m in two years (global). Wow.

De La Rue’s “My Contribution” initiative is an employee scheme that invites employees to identify business improvement solutions, implement them as projects, and get rewarded for them. Focus is to be on solving customer, employee (or shareholder problems).

Andy has put up a De La Rue ‘jam’ of the classified ad that Antarctic explorer Ernest Shackleton took out to recruit for an expedition

“Men Wanted for Hazardous Journey. Small Wages, bitter cold, long months of complete darkness, constant danger, safe return doubtful. Honor and Recognition in case of Success."

The challenge for De La Rue has been to embrace empowerment (allowing employees to drive the program), permission (turning employees into stakeholders for project implementation) and measurement.

“My Contribution” Program success is measured in terms of improvements to customer NPS and value of initiatives implemented. Key factors in making “My Contribution” work include

• Communicating program effectively across business
• Creating program champions in each site
• Training - giving employees problem solving, project management and facilitation tools
• Peer review of suggested ideas - rank, rate, comment
• Reporting and demonstration of successful projects
• Rewarding employees - “Spotlight” initiative where project managers of top project present their initiative to senior management
• Getting critical mass in terms of contribution

Andy’s is a refreshing jargon-free zone - but can’t help thinking that his “My Contribution” program is a gold standard exercise in applied Wikinomics - using mass collaboration and collective intelligence to drive customer experience - NPS - and therefore growth. Wow. Wow. Wow.

Final flourish - chart of De La Rue stock price over the period "My Contribution" has been delivering results, massively outperforming competition. I am inspired.

We began the Process Excellence track with a presentation from HSBC's Nadya Hijazi.

A Little Context

Because HSBC is such a large, global company it's difficult to present themselves cohesively to their customers. Perceptions of their customers differ widely based on where they are located and which part of HSBC they work with.

And, HSBC have a very competitive environment in which they must make a multi-million dollar investment in HSBCnet, introducing new functionality, and supporting geographic expansion. 

What They Did
HSBC needed a compelling metric at high level that would provide actionable data - one question and diagnostics was used to hit the ground running. A key point was that Nadya worked with the business teams to define the diagnostic questions - but she would only allow their questions to be included if they were ready to action the answer. That's a great way to ensure action takes place!

HSBC surveyed 27,000 customers across 24 countries with a complete survey of the end-to-end customer experience. The last two questions were NPS and why? HSBC also made sure that they included the end users in the survey, not just the decision makers.

Nadya presented three findings around detractors:

• 14% of end users who were detractors made 6 or more calls into call center vs. 7% of promoters.  That adds up to serious costs. This higher cost-to-serve goes across all aspects of HSBC brand - whether experience is personal or professional.
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• Quality was critical for the customer, and a major factor for customer dormancy and attrition.
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• Satisfaction survey - good measure, but NPS more powerful. Only "delighted" were likely to be promoters. "Satisfied" were more likely to be detractors. This surprising finding upset some people who thought they were doing a good job with a 70% satisfaction rating, but their NPS didn't tie up.

She concludes NPS is a measurement of the quality of the relationship versus satisfaction with specific event.

Put It in Context

Nadya related two key things to understand to correctly put your Net Promoter score in context: cultural differences and competition. HSBC found that their top scoring countries were the same as in the Satmetrix white paper. Furthermore, 75% of HSBC customers are multi-banked. They asked their customers to rate and rank their competitors in country which gave evidence of their relative position in market segment in that country. Key learning: do not compare country to country without knowing the cultural bias and competitive climate. It is more important to benchmark in country, and incentivize on local transactional NPS.

How to Move That Score? Innovate by Involving Your Customers!

Nadya implemented a technique called "tryvertising" - beta test online changes on their internet banking platform. They identified main issues, and asked users to road test and give feedback. It was quite revolutionary, as they used detractors and passives as the focus group for the issue. They were able to increase NPS 20%.

Second, involve lots of customers. Don't just use 5-10 people in focus group, involve everyone - she ran webinars with her channel across 3 regions. HSBC got excellent feedback, and had a big impact on their customers' perception of them, which proved to be good for morale for product team and customer!  And it cuts out a lot of discussion about what to do, as the improvement design comes straight from customer's mouth.

How Do You Improve the Impact of the Multi-Million Dollar Investment?

NPS alone is not the remedy to everything.  Understand how to make changes that strike a balance. Prioritize your customer issues and invest in what cuts across many of your customers, or what costs you your most valuable customers. But, remember, much of what you do is baseline or expected - it will minimize detractors, but will not create promoters.

An interesting technique on increasing response rates is to phrase questions around how the customer expresses something directly - this struck a chord for HSBC customers and doubled their response rates.

Nadya gave us lots to think about.

Sinead Kwant of Philips International quotes Dr. Morris Massey: "The gate for any change is always unlocked from the inside." This was a very engaging presentation if you count the number of hands going up asking questions at its end. If I was to summarize, the key ingredient that drove the success of the Net Promoter program at Philips is to gain the hearts and minds of employees. Employees engaged in the customer experience will deliver happy customers stated Sinead.

The challenge was large for Philips. They needed to get 120,000 employees to believe in the customer experience or the program would have failed. They have had success. So how did they do this?

Well first, it is Philips' ambition is to become a truly market-driven organization delivering profitable growth. A key part of this is to build loyal Philips customers using Net Promoter. Navigating change is hard, as Sinead states. So there were four key areas of the journey to build the program and engage employees:

• Awareness
• Understanding
• Buy-in, and
• Commitment.

The awareness objective was to introduce the concept of Net Promoter into the organization - this started at the top with Philips CEO Gerard Kleisterlee who became a vocal advocate. Senior leaders went to the call center and started to listen to customers. This really motivated the support center staff. Proof points and pilot projects were done to prove the concept and win over internal detractors.

The next stage was to understand the data and deliver the evidence that Net Promoter works. Philips proved that there were tangible benefits from moving passives and detractors to promoters. Sinead gave the example of positive growth in market categories where they were Net Promoter leaders. As Net Promoter leader, they out-performed their competitors, seeing a 4% annual growth above the market average. Where they worst-in-class they underperformed the market by 3%. I guess that Net Promoter is tied to growth!

Building buy-in was next. First, they did the voyage of discovery. Two hundred executives went to talk to leading companies to learn how to engage their employees. They talked with FedEx, Starbucks, GE and other leading loyalty companies to learn what best practices worked.

Last is commitment - secure commitment to structure, resources, expertise and next steps to deepen deployment of the Net Promoter program. Also important is training, business workshops, and other employee communication strategies to get everyone up to speed.

When asked in the Q&A, Sinead stated one of the key learnings of this whole journey is to keep it simple. Do not over analyze the data. Previous satisfaction studies did not allow them to act on the drivers of the data nor engage employees. As Sinead stated, this is an on-going process for Philips. They have already seen positive results, but there is more to come.