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Part 2: Top Ten Success Factors for Net Promoter Deployments

 

 

 

There were lots of compelling case studies presented at the recent Net Promoter conference in London. Clearly a revolution is occurring in the marketplace. If you don't embrace it, your competitors will bury you. Because sooner or later, they too will wake up to the power of this important customer-experience metric.

 

First off, just because Net Promoter is simple does not mean that it is easy. It requires discipline to make it happen. It requires methodology. It requires commitment. It requires technology. And it requires the whole company. I'd like to use this blog to summarize the top ten factors that spell success for Net Promoter practitioners:

 

  1. Involve the CEO. At every customer presentation I attended in London, it came out that the CEO was actively involved in some way. Read the blogs from GE, Aggreko, Philips, Lego, and other attendees and you'll see precisely how CEO involvement was instrumental to launching their programs and keeping them on track.
  2. Gather your proof points. Net Promoter programs are not always welcomed with open arms. The skeptics need proof. In many cases, pilot programs are put into place to get proof from within a targeted business segment, such as a region, product group, or business function. As the stories at the conference revealed, these pilot programs are key to demonstrable wins. The wins almost always involved front line personnel and stressed the importance of following up immediately on negative feedback. The most common approach was to focus on strategic accounts and the most common win involved saving a key account or culminating a large deal. This is the kind of proof point that gets attention.
  3. Gain visibility. None of the programs highlighted at the London conference were kept in the back room. Many employees were involved, champions emerged or were assigned, internal and external marketing programs were employed to train and build understanding. This is one area where the strength of Net Promoter comes into play almost every time.
  4. Find the right blend of top-down and bottom-up. There is no magic formula for how to collect Net Promoter data. It almost always consists of a blend of top-down data collection (periodic relationship surveys) as well as bottom-up transactional surveys driven by customer-facing business processes. The conference attendees used both short and long surveys. It sometimes took trial-and-error to get it right. When in doubt, they consulted with experts.
  5. Win the hearts and minds of front-line workers. This may sound like a restatement of "gather your proof points," but there is more to say about this. Employees need to feel that they are important and have a stake in the customer experience - even when they do not always have direct customer involvement. This point came across very well when GE Real Estate talked about NPS Day. In one case, a clerical worker at GE, who is responsible for processing loan documents, actually got emotional during a moment of epiphany. "I never knew what I did mattered to the customer," he said.
  6. Drive improvement in the scores. Remember, collecting NP data is just the first step. To affect change within your customer base, you must act on what customers tell you. This involves sharing customer feedback with front-line employees, and gradually changing the corresponding business processes when the aggregate data reveals a trend.
  7. Commit for the long-term. We heard this again and again from the speakers at the conference. Success is derived from long-term commitment. For Net Promoter programs to work, you must think beyond quarterly results. This also helps smooth out the focus on short-term profits - ”or "bad profits," as Fred Reichheld calls them.
  8. Encourage quick wins. There are generally quick wins to be had when talking with customers - both promoters and detractors. This is true even if the issues require long-term fixes. The act of listening and starting the improvement process is often enough to move detractors to higher scores even if you can't fix their issues right away.
  9. Reinforce top corporate objectives. If customer experience and loyalty is not one of the top strategic corporate objectives, the Net Promoter program will fail. Strive to connect what you learn from customers with the things senior managers deem important, and vice versa. This requires a continual focus on CEO commitment and a marketing plan to increase program visibility.
  10. Replay customer feedback for maximum impact. While numeric scores may come across as impersonal, customer comments have real impact. After product managers at HSBC were able to read what customers really wanted, they resolved an internal battle over which features to add to a key financial product. Listening to audio comments from recorded surveys is particularly enlightening.
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Part 1: Leaping into the Net Promoter Domain

 

 

I am writing this blog on the plane ride home from the Net Promoter Conference in London. As I ponder the success stories I heard at the conference - stories from GE Real Estate, Aggreko, Philips, Groupe Neuf Cegetel, and other prominent firms - it occurs to me how critical Net Promoter has become for these businesses. Many attendees who were "on the fence" at the outset of the conference have jumped over to join the Net Promoter community. Success is contagious.

 

I'll give you a few examples. GE Real Estate has nearly doubled its revenue since implementing its Net Promoter program. The loan-processing giant attributes 25 percent of these revenue gains to Net Promoter - to the tune of $3.4 billion. Meanwhile, Net Promoter is helping broadband supplier Groupe Neuf Cegetel become a leader in member satisfaction by monitoring customer activity in its call centers. For LEGO Group, success with Net Promoter is all about business transformation and brand revitalization. FileNet (now IBM Enterprise Content Management) reported a 26 percent improvement in its Net Promoter score, accompanied by an increase in revenue from its existing customers. According to its case study, FileNet's sales from existing customers have jumped from 72 percent to 80 percent, yielding an increased net profit of 10 percent. In addition, Philips revealed how it is out-growing competitors in segments where Philips is the Net Promoter leader.

 

What do these companies have in common? They all credit Net Promoter for managing and improving customer experiences. Their employees understand the value of building a network of promoters. They know that having "net-positive" promoters is good in the same way as net profits: it's a currency that drives growth. Thus these companies measure success not only in monetary terms, but in the goodwill of their customers. Finally, they have a reliable metric to track their progress.

 

 

The companies who presented their stories in London realize the value of a reliable customer metric just as CFOs understand the value of business metrics like cash balances, days sales outstanding (DSO), and gross margins. These are tried-and-true financial metrics, just as Net Promoter is quickly becoming a tried and true customer metric. While skeptics insist that simple loyalty metrics can't possibly tell the whole story, these companies are proving them wrong. Balancing Net Profits against Net Promoters is the right way to maximize growth. The rewards are evident for those organizations that are willing to follow the Net Promoter journey—and really listen to customers along the way.

 

 

There is another reason why this is not just important, but essential. There is a huge cultural change happening between customers and businesses. Your customers are talking about you, and this time they have megaphones. Blogs, wikis, RSS feeds, podcasts, and other forms of social networking are growing in popularity, amplifying the voices of individual consumers and business partners. Frustrated letters to the CEO and phone calls to the support department are now being played out on You Tube. The suggestion box on the CEO's door is now being posted on the Web.

 

 

Do you know what your customers are saying, and are you interested in monitoring their feedback? These public expressions are influencing opinion whether you know it or not. Facebook claims 90 percent of the student population in the U.S., which represents an increasingly affluent purchasing demographic. MySpace has 57 million members from all walks of life. People think twice when they see a 2-star score on eBay or Amazon.

 

 

As Richard Owen, CEO of Satmetrix, the co-developer of Net Promoter, stated during his opening presentation in London, what's at stake here is nothing less than the reinvention of marketing. I found it prophetic that New York Times columnist Thomas Friedman wrote about this topic the same day of Richard's talk. As he put it, we're all public figures now. The blogosphere has made the global discussion so much richer - and each of us so much more transparent. He was referring to public figures when he made that statement, but the same phenomenon applies to companies. Whether you're selling cars or newspapers, Friedman reported, it's essential to get your "hows" right: how you build trust, how you collaborate, how you lead, and how you say you're sorry.

 

Companies that embrace customer experience will be rewarded with a loyal group of promoters who do free advertising, just like Apple has been rewarded by its loyal group of iPod customers. Those who do not embrace customer experience will be forgotten. (Which company first released an MP3 player anyway?)

 

 

Net Promoter helps you get your arms around customer experience, in the same way Net Profit focuses your company on profitability. Are you still on the fence? If so it's time to make the leap.

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Delegates are returning from a short coffee break – room is packed again.

 

Peggy Conley introduces her session by explaining LEGO adopted NPS two years ago as part of a turnaround strategy for company.

 

NPS has permeated LEGO company culture - focusing the business on customer experience (the key driver of NPS).  Example of CEO receiving letter from customer asking for Space LEGO instructions - and replying personally.

 

Peggy is talking about critical success factors for NPS deployment:

 

1) Employees know the score

2) Employees are rewarded for improvements to score (10% of bonus on NPS improvement )

3) Employees feel they can personally have an impact on NPS

 

First step in building a Net Promoter Program for LEGO involved tracking NPS in surveys (which LEGO had been doing for several years - so they already had basic) benchmark data.

 

Measuring NPS is involves researching right consumers (core target groups), at the right time (after brand interactions), and right experiences (experiences over which business has some control)

LEGO measure user NPS as a customer experience metric across 5 key areas:

Product Experience (immediate post purchase), Online Experience, Store Experience, Customer Services experience.

 

The LEGO NPS surveys are kept deliberately short - four questions - to get impressive response levels.

Peggy is explaining how all monthly NPS data and actions are summarized on a single sheet that is distributed to the business departments.

 

NPS data is also used to feed into an affinity segmentation model to allow LEGO to build segment specific initiatives for improving NPS/experience.


Different methodology for different experiences - but goal of NPS research is to measure quality of experience and opportunities for improving it.  Key is to turn data/info into actionable insights

Peggy is wrapping up by giving examples of how NPS research is driving business improvement initiatives.

  1. how mood of customer services influences experience (NPS) - when engaging an fun experience quality (NPS) increases
  2. how ease of finding instructions on the website influences experience - a site redesign increases NPS significantly
  3. how search and navigation on online store influences experience - usability tests and “deep dives into open comments” identified how to improve experience
  4. how packaging quality influences experience - improved packaging improved NPS
  5. how delivery times for online sales influences experience - improving delivery times improved NPS
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The room’s full overflowing - standing room only to hear Gavin Sugden, Market Intelligence Manager for mobile operator T-Mobile, talk about the T-Mobile experience of deploying Net Promoter.

 

Gavin’s talking about T-Mobile deployment of Net Promoter Score in the UK. At the heart of the initiative is a competitive NPS tracker conducted with a random sample of 3000 consumers by phone every month.

 

Interestingly, the T-Mobile tracker measures the NPS of T-Mobile and key competitors, reporting scores relative to category average to provide a competitive benchmarking. Smart.

 

T-Mobile has implemented a 3 step NPS strategy - Communicate - Understand - Act

  1. Communicate - first communicate adoption of NPS internally across the business simply and clearly, emphasizing that the initiative has senior level buy-in, and that improvement to NPS should be a key goal of all T-Mobile initiatives.
  2. Understand - identify key drivers of NPS with diagnostic research - interviews with detractors and promoters, and correlation of NPS with satisfaction and brand research.

 

Gavin presents key advocacy (NPS) drivers for T-Mobile:

 

  • Brand Relationship (innovative and forward looking, involvement and knowledge, perception as a big confident brand, customer service and value for money)
  • Customer satisfaction (service, network coverage, value for money)
  • Tariff Popularity (popular tariffs)

 

Based on understanding of NPS drivers, Gavin explains how to T-Mobile put together a 2 step action plan

Step One of T-Mobile’s Net Promoter action plan is to deliver on expectation priorities with a set of improvement initiatives that focus on getting the basics right.  The KPI here is a reduction in proportion of customers who are detractors - who can have disproportionate negative influence on growth.

Step Two of NPS strategy is surprise and delight customers with initiatives that deliver on the key drivers of recommendation. The KPI here is an increase in proportion of customers who are promoters - who will drive organic growth through loyalty and referrals.

 

    3.  Act - implement action plan.  Act - implement action plan.  Gavin is not giving away any company secrets here about the specifics of the action plan ;-( but he emphasizes the importance of ongoing monitoring of the action plan on the NPS.  Gavin is warning of the ‘hockey stick effect’ that can occur when new initiatives are rolled out - a short term dip in NPS reflecting teething problems in delivery - and an expectation/experience disconnect.

 

Gavin is wrapping up with a summary - is talking about the importance of setting up NPS forum to share learning across the business and to continuously evolve T-Mobile’s NPS strategy and action plans.