http://netpromoter.typepad.com/.shared/image.html?/photos/uncategorized/offense.jpgHooman Hakami, VP & GM, Global Services, GE Healthcare, gave an excellent presentation this morning. Hooman explained that the Clinical Systems business within GE Healthcare operates at the "point of care." Products include ultrasound, cardiology, monitoring devices, bone densitometers, maternal infant care, and life support. The company has 1.7 million units installed in 140 countries, and is supported by 2http://netpromoter.typepad.com/.shared/image.html?/photos/uncategorized/hoomanhakami.jpg ,100 employees.

One of Hooman's fundamental insights was that different customer segments have different priorities; an insight that has been resonating throughout the day, particularly in the B2B context. The company rolled out NPS in 2005, and found that customers want, essentially, three things: speed (36%), communication (25%), and competency (18%). They have instituted comprehensive efforts in all three areas, resulting in a whopping increase in NPS from a baseline of 40% in 2006 to 58% in 2006!

The effort involved a massive investment, funded by re-prioritizing other spending they found (from customer feedback) was less important. One of the principal ways they increased speed, communication, and competency was to decentralize their service infrastructure.

A fascinating observation was how the company is "using NPS to play offense." They're using the stories growing out of their improvements in customer advocacy on the PR and sales fronts.

The results of all their efforts are undeniable:

This is truly a winning story!

http://netpromoter.typepad.com/.shared/image.html?/photos/uncategorized/archstone_boston_common_thumbnail.jpgParke Pettegrew shared many of Archstone-Smith's innovations in the apartment rental business, which include some very aggressive customer-facing promises.

Parke then asks: How can we be sure we are living the brand promise that we make to our residents?

They want to know how to understand baseline loyalty and understand what drives it. Then they want to translate these into operational improvement.

They have an interesting system to track NPS in parallel with their org chart -- regional EVPs, VP, etc. are compared against each other.

T-Mobile finds that NPS increases with proximity to customer interaction -- it rises significantly (as much as 70%) immediately after a visit to a store, and then begins to drops back as time passes.  Without the positive reinforcement, NPS drops back to nearly 0% over a few months. Lesson -- pay attention to customers!

Dr. Laura Brooks, VP of Research & Consulting at Satmetrix gave what might be described as a somewhat sobering presentation on achieving success with NPS in a B2B context. She reported that while 76% of companies aspire to be customer-centric, only 16% actually "execute" and achieve this aim. In addition, her group's survey of companies showed that only about 1/3 showed any improvement in NPS scores over a 3-year period, and that the overall average improvement was only 3%! The summary quote: "Breakthrough performance improvement (i.e., 10%+) is very rare in B2B." The tale of the tape shows that, as with American Idol, many are called but few are chosen.

Laura did offer some "secrets," however, for how to become one of the chosen few:

• Develop/sustain a customer-centric culture (starting, ideally, at the top)
• Measure who matters (Blogmaster note: see a related blog by Laura Brooks on this topic)
• Drive change through integrated processes
• Take action in big and small ways
• Expand/stretch for the next level

Of these, "measure who matters" caught my eye, if for no other reason than it's a play off the old adage to measure what matters. The idea is an excellent one because in the B2B context a single account can make all the difference. Laura urged B2B leaders to focus their efforts on accounts/prospects who matter, rather than treating everyone equally. Her catch phrase: "Voice according to value."

Laura offered a useful framework for thinking about some of the key differences between deploying/integrating NPS in B2C and B2B contexts:

Clearly, this framework highlights the fact that, in the B2B world, some accounts deserve more attention than others. After all, we're still talking about business. 

So, remember to measure who matters!

George Hofheimer is the Chief Research Officer, Filene Research Institute (see left). George's organization is what they call the "think tank and do tank" for the credit union industry.

George's research set out to understand and validate NPS in the credit union context, and correlate NPS with growth.  The studied 17 credit unions and surveyed 50,000 of their customers  They got a 13% response rate.

The result? Credit unions had an average NPS of 53% -- compared to typical financial industry scores of -21% to 48%.   People love their credit unions.

They further looked into the loyalty question, with 97% of promoters reporting that they would stay with the credit union.  Promoters are likely to see their CU as their primary provider of financial services, have been customer for more than five years, and have a good overall experience. The research also found that NPS correlates very positively with membership growth.

http://netpromoter.typepad.com/.shared/image.html?/photos/uncategorized/matrix.jpghttp://netpromoter.typepad.com/.shared/image.html?/photos/uncategorized/handshake.jpghttp://netpromoter.typepad.com/.shared/image.html?/photos/uncategorized/respect_and_handshake.jpgAfter learning of the journey at Experian, we had the chance to hear from Das Narayandas, a well-regarded authority on B2B marketing & customer management. Das shared two very simple frameworks with a powerful punch. 

The basic message was if you want to build good loyal customers you must understand the value you create for customers and evaluate your customer portfolio to meet their unique needs. 

Creating value for customers requires that you move from product features to customer benefits. This has never been more important than in today's selling environment. Gone are the good old days of buying on the promise of the value your product or service may bring. Customers today are more discriminating and demand measurable business outcomes.   

Das offers a 2x2 framework: your ability to quantify the benefit on one axis and your ability to communicate the benefit on the other. By looking at your value proposition in this context you can quickly identify where your value proposition is and how it drives sales. The framework offers 4 categories:

1. High economic benefit, high ability to communicate: you must compare yourself with your competitors and have superior price performance.
2. High economic benefit, low ability to communicate: the burden of truth is on your side. Get a 3^rd party benchmark, pilot test or offer guarantees.
3. Low economic benefit, high ability to communicate: focus on building brand preference
4. Low economic benefit, low ability to communicate: not ideal for acquiring customers. Use as the glue to loyal customers.

The second framework he offered allows you to evaluate your customer portfolio. After all, customers are not all created equally and you need to manage them differently. In this framework, he offers us another 2x2 matrix. Here, we look at price on one axis and cost to serve on the other. Keep in mind that cost to serve excludes cost of goods sold (COGS).

In his experience companies have customers scattered in all four quadrants, and the important point is to understand where customers are in their lifecycle. Here's how they break down:

• High price, high cost of services: this is where life begins. Customers here value innovation, want full service, and are willing to pay for it.
• High price, low cost of services: the good life! Are these customers loyal or uninformed? They will eventually become informed and you need to understand them and keep them as long as possible.
• Low price, low cost of service: commoditization. This can be 40% of a business. Here you have to strip away and sell the core product at the lowest possible price.
• Low price, high cost of service: while obviously not ideal from a business prospective, you may choose to invest in some customers in exchange for reference or partnering on new products. Here you should evaluate whether you can move the client to another quadrant, strategically invest, or whether you need to fire them.

Das wraps up by telling us Promoters can live in any of these quadrants. The important point is to understand where they live and how best to serve them. 

I would recommend evaluating your benefits and customer portfolio in this context. I put this tool in my bag for future use. Sales & marketing today requires a focus on benefits vs. features -- these frameworks can provide the discipline to evaluate how best to serve your clients and create more Promoters.

From Experian's Laura DeSoto: Include the NPS for each of your customers in their records, so your entire organization can see how well they are being served (or how well they feel they are being served.

http://netpromoter.typepad.com/.shared/image.html?/photos/uncategorized/promise.jpgWe're all accustomed to hearing about success stories at business conferences, but Laura DeSoto, SVP of Innovation and Synergy at Experian, presented the real deal this morning. She told a story about Experian's "client promise initiative" which, following lots of hard work and the engagement of 2,000 employees, resulted in more than a doubling of Experian's NPS scores and "double-digit" increases in revenue and profits over the most recent six quarters.

With $3.1 billion in annual revenue, Experian is the largest information services company; growing primarily out of the company's credit reporting business. The company has both B2B and B2C components, but Laura focused primarily on the B2B side in her presentation.

The challenge, Laura pointed out, was that the improvements didn't come immediately. In fact, once Experian launched its initiative, the NPS scores actually declined over the ensuing 5 quarters! So, a key takeaway from Laura's presentation is that there is often a lag between when new investments in customer-centricity are put in place and when the impact on customer advocacy actually shows up. And then, there's an additional lag between improved advocacy and improved financial results. So, particularly on the B2B side, results require enduring commitment!

Experian's keys to success:

• Executive engagement
• Providing executives and account teams with client feedback
• Extensive communications with employees at all levels

If you're a B2B business looking for a company to benchmark for customer-centric success, it's time to get Experian-ced!

For more details, read about their Net Promoter program with Satmetrix here: http://www.satmetrix.com/casestudies/experian.htm

http://netpromoter.typepad.com/.shared/image.html?/photos/uncategorized/attendees_2.jpgAs I walk into the room it's clear that this is not your normal conference.  Definitely not your normal research and measurement conference. 200+ executives are sitting in their seats -- focused, taking notes, and absorbing the presentations. What you don't see is people drifting around the halls, chatting, and making phone calls. Amazingly, I can't see anyone on their blackberry either. Without a doubt, this is a group who has a appreciation for this topic, and they are here to grab every bit of knowledge that they can.

It's going to be a good event. http://netpromoter.typepad.com/.shared/image.html?/photos/uncategorized/attendees.jpg

http://netpromoter.typepad.com/.shared/image.html?/photos/uncategorized/tuqcd_1.jpgI bought The Ultimate Question on CD, so I could re-read it before the conference. My wife (a medical writer with no real interest in marketing), is often tortured by my business books on long drives. This was different. We found ourselves stopping the audio and discussing what we heard dozens of times, fairly intensely. That's what a great business book is all about -- it has to be a cross-over hit that makes as much sense to the non-business listener as the executive. It has to ring true to anyone who hears it.

This will be a great conference!

http://netpromoter.typepad.com/.shared/image.html?/photos/uncategorized/group1.jpgCouldn't make it to the Conference (Jan. 31 & Feb. 1 in NYC)? Then check out the Conference blog for real-time updates from Deb Eastman, Andy Sernovitz, and John Williams (read their bios). Want to review the posts by topic such as B2B, B2C, best practices, speaker, or blogger? Then check out the "Categories" to the right. (Note: click on photographs below for larger image.)

Blogger Biographies

Deborah Eastman
Managing Principal, Windward Solutions

Deborah Eastman, Managing Principal of Windward Solutions, provides advisory services to companies interested in putting Net Promoter into practice by defining their brand promise, measuring an organization's ability to deliver on that promise, and building brand ambassadors internally and externally. 

Previously, Deborah was EVP of Sales & Marketing for Biz360, an information services company providing market intelligence to marketing executives. Prior to that, she served as a Managing Director at BearingPoint (formerly KPMG) where she held a number of global leadership positions including marketing, global accounts, and strategic partnership development. In 2000, Consulting Magazine named Deborah one of the top consultants of the year for her efforts in building a partnership with Cisco Systems that generated a $1B investment.

Andy Sernovitz
CEO, Word of Mouth Marketing Association

Andy Sernovitz, a 15-year veteran of the interactive marketing business, is CEO of the Word of Mouth Marketing Association (WOMMA). He was a Visiting Scholar at the Wharton School of Business, where he taught Internet Entrepreneurship, and is author of Word of Mouth Marketing: How Smart Companies Get People Talking.

WOMMA is the 300-member official trade association for the word of mouth marketing industry, which is building a prosperous word of mouth marketing profession based on best practices, measurable ROI, and ethical leadership.

John I. Williams, Jr.
Director, The NPS Loyalty Forum, Bain & Company, Inc.

An experienced loyalty executive and entrepreneur, John Williams is the Director of the NPS Loyalty Forum, an information exchange offered by Bain & Company for senior executives of loyalty-leading organizations. The NPS Loyalty Forum brings together companies committed to achieving outstanding results by earning superior levels of loyalty from customers, employees, and partners. The Forum's mission is to enhance the effectiveness of its members by presenting best practices across industries and national borders, and by creating a network in which members can share, learn, and enhance those practices.

Previously in his career, John was a senior executive at American Express, where he led the U.S. Platinum Card business and the Consumer Travel Network. More recently, John has been a successful entrepreneur/CEO of a number of travel-related companies.