Welcome, Guest Login Register
loading...
Net Promoter Community > European Conference Blog 2008 > Authors > DebEastman
 

European Conference Blog 2008

14 Posts authored by: DebEastman
DebEastman

Fred Reichheld began his session by tackling the debate raised by the market research community. He referred to himself as the anti-christ of market research. While all three of his books have been best sellers, The Ultimate Question has stirred up major debate in the market research arena. The biggest criticism is that it's over simplified. It's just one question and nothing about why? Yet, if you read the book it's all about the why. NPS is not intended to be a superior predictive analytic; it is intended to be a management tool.

 

 

He addressed the question of why the "status quo" market researchers are so critical of NPS and believes it's because NPS has attracted so many of their customers. He showed a slide with many big brand logos that are using NPS and seeing results.

 

 

Fred has resisted the temptation to address the market researchers head on and instead has invested his energy into helping companies get results with NPS. According to him, here are the reasons why so many companies are using NPS vs. traditional approaches:

 

 

  • Intuitive and practical
  • Efficient and respectful of customers' time. (He described a recent experience with British Airways where he was presented with a survey with 79 questions. The first 15 questions could have been filled out by them -- seat, flight, etc. This was not respectful of his time.)
  • Diagnostics have to take place by people so they can take action.
  • Action oriented: daily, weekly, monthly report
  • Motivational. It's not about the score, it's about treating people in a way that builds relationships.
  • It's the right objective.
  • Loyalty economics, link to the numbers investors care about.
  • Open source. Most loyalty index calculations are a closed source.
  • Based on a simple moral premise, treat others the way you want to be treated.

 

 

The goal is not about the score, it's about turning everyone you touch into a promoter.

 

The model is clear. Customer loyalty drives growth. Loyalty is driven by partner, employee and channel loyalty. Their loyalty is driven by the leadership loyalty, creating a culture of rewarding those that treat people right.

 

 

In contrast, business is run by accounting standards. Financial metrics that are audited, and people go to jail if they are dishonest about the numbers. How many people have gone to jail for gaming satisfaction numbers? (Otherwise we wouldn't be able to buy cars, as all the car dealers would be in jail!)

 

Bad profits alienate customers and de-motivate employees. Examples:

 

 

  • Hotel: phone bills
  • Banking: returned check fee
  • Cellular: best price for new customers
  • Airlines: change fee
  • Rental car: gasoline refill at 3x retail

 

 

NPS is radical. It's trying to take bad profits out of the business. Instead, it focuses on the building blocks of growth.

 

 

  • Repurchase
  • Buy additional lines
  • Referrals
  • Constructive feedback

 

 

None are measured in generally accepted account metrics.

 

Balance the power between net profits and net growth.

 

Part of the success of Enterprise Rent-A-Car is their focus on NPS. They focused on:

 

 

  • Reliable categorization of detractors and promoters
  • Approach to reduce detractors
  • Approach to grow promoters
  • Established as a leadership priority

 

 

They stack ranked their branches; low performing branches couldn't be promoted. They audit results and fire people that cheat. The results are that 80% of customers are promoters, they have grown to dominate the industry while price competitive and paying their people best in the industry.

 

 

The key is to get NPS working at all levels. Top down is helpful for setting strategic priorities and driving culture change. Bottom up, frontline engagement changes the score daily, weekly, monthly. Cross functional leaders tend to be the ones designing the policies that drive bad profits because they have a financial budget they have to hit even if it impacts loyal customers because this is typically not measured. Drive NPS measures across at all levels to get results.

 

 

Think of profitability and Net Promoter simultaneously. He showed a chart from one of the accounting firms that segmented promoter, passive, detractors on one axis and profitability on the other. This allows companies identify the market segments with best profits and high loyalty allowing them to focus on the markets that matter most. When the biggest accounting firms are using NPS, good things will happen.

 

Finally, he asked the audience if they were doing NPS. Here are the questions to ask yourself regarding your Net Promoter program:

 

 

  • Are you categorizing customers into promoters, passive and detractors in a reliable way?
  • Do you have systematic process for reducing detractors?
  • Do you have a systematic process for growing profitable promoters?
  • Is it a leadership priority?

 

 

While the market researchers debate the relative merits of multi-variant indices, the companies represented here at the Net Promoter Conference are getting on with the business of building more promoters and eliminating detractors.

 

Click here to download the presentation.
... more >>
0 Comments Permalink Tags: angels, fred, eastman, nps, reichheld
DebEastman

Laura Brooks from Satmetrix discussed the importance of building trusted relationships with customers and employees and how that results in the economics of word of mouth. She started with recent research in high tech, financial services and telecommunication industries that showed trusted relationships had a stronger correlation to recommend scores then product or service performance. This was true of vendors with both one-off point solutions as well as broader solutions. Product innovation is not sufficient, buyers want a trusted partnership.

 

Critical to building trusted partnerships with customers is having trusted partnerships with employees.  She referenced other conference speakers that shared the importance of engaging employees in improving NPS scores. More mature Net Promoter programs go beyond engaging employees to evaluating the Employee Net Promoter Score (EPS). Without loyal employees you cannot create loyal customers and achieve results. Employees want to be valued and know their values are in alignment with the organization. Drivers of employee loyalty include being consulted, collecting their feedback, and rewarding for results.

 

Employee Promoters are more likely to be customer facing. People feel they are valued in these roles and they feel their contribution is important in the context of the company's strategic direction. The Allianz presentation yesterday discussed how they connect the front office to the back office. Laura suggested that getting both the front office and back office people following up with customers helps the back office employees better connect to the customer.

 

Now that we have discussed trusted relationships with both customers and employees, let's connect that to word of mouth. Most of us know that the old advertising model of broadcast communication is broken: 76% of people don't trust advertising. Today's marketing is about word of mouth. According to Forrester Research, 80% trust word of mouth more than any other source.

 

Word of mouth is no longer constrained to the water cooler. Research shows that word of mouth is on the rise. The Net Promoter research data shows referrals increased 8% over the last year across all industries and in some industries as much as 18%. This is largely driven by consumer generated media and online social networking.  It is estimated that the top dozen social networking sites have over 30 million users. In this connected world, people desire dialogue with brands and with each other.

 

Next, Laura introduced the concept of NetWorked Promoters, those that are more connected and tend to have a bigger impact on word of mouth. NetWorked promoters are a special subset of your promoters.  They refer more, are more socially connected and credible and tend to be more charismatic.  When studying online communities she found that 80% of the ideas voted as most popular in the community typically come from this group.  Focusing efforts on the few NetWorked Promoters can extend reach and influence over a large number of people.

 

Let's now look at the economics of word of mouth. Customer value is made up of both referral economics and buyer economics. Net Promoter measures both loyalty and total customer worth that lead to organic growth.

 

Laura shared research from 2007 for the B2C computer hardware industry and mentioned two other studies coming out, one on the credit card industry and the other on the wireless industry. In this model Satmetrix found that the B2C hardware industry has a NPS of 27%. By contrast, Apple has a NPS of 78%. She then shared how that impacts the bottom line.

 

  • Promoters spend more. The research showed Apple customers spend 1.5 times more than the industry average and promoters spend 1.3 times more. Apple Promoters refer positively on average 90% of the time vs. 75% for the industry average.
  • Referrals. The research showed that in the B2C hardware industry, average promoters refer 78% of the time and detractors have negative referrals 29% of the time.  But detractors have 4 times the impact than promoters.

This research has been put into an economic model that would be difficult to describe on this blog.  CLICK HERE to download the white paper, titled Net Promoter Economics: The Impact of Word of Mouth.

 

The key takeaways from Laura's presentation

 

  • Today's buyers want trustworthy relationships with your organization.
  • Strategies for building trust based relationships include Employee Promoter Score (EPS) and NPS
  • Word of mouth economics are driven by buying and referral behaviors
  • Promoters spend more and refer more
  • NetWorked promoters have higher referral rates through connected word of mouth
  • The key to Net Promoter economics is TRUST.

 

Click here to download the presentation.

 


                

                
... more >>

                


                        
                            1 Comments
                        


                    
                        Permalink
                    

                    Tags:
                         b2c,
                         satmetrix,
                         b2e,
                         laura,
                         paper,
                         eastman,
                         brooks,
                         promoter,
                         economics,
                         net,
                         w-o-m,
                         white
                    

                

            

            

        

         
         


            
            


                

                    

            
                DebEastman
                    

                



                
                


                    

                

                

            

            


            
            
            

                

		    		
The second presentation of the day was delivered by Dominique Soudais who is responsible for customer experience at Orange. Orange is an international company providing fixed line, mobile and Internet services. They have 170 million customers on 5 continents.
 
Orange uses Net Promoter as a lever for organisational change, referring to it as the "magic KPI."  Their goal is to help customers be more empowered and achieve more where they live, work and play.  Their strategy for growth includes investing in new technologies, such as fiber, that deliver incremental value for customers.  This strategy requires increased focus on customer experience and word of mouth.
 
Why did Orange use NPS as driver for change?
 
  • Customer demands continue to rise and points of interaction expand across mobile, land and internet connectivity.
  • Purchases are more complex, typically multi-step and multi-channel.
  • Consumers have strong expectations for advice and help.
  • Consumers often seek word of mouth when considering a purchase.
 
While Orange has always had a strong customer satisfaction culture, practices were heterogeneous and limited to satisfaction measures. In February 2007 they began measuring NPS. Initially they focused on improving the critical steps of the customer journey and motivating teams to encourage cross-organisational actions. They found that calling back customers was very effective at helping to build a customer-driven culture.
The results are impressive, with an increase of 6 points in 8 months. They have set a target to increase by an additional 10 points in 2008.
Dominique highlighted one of NPS's greatest benefits -- understanding by everyone in the organization.  He went on to discuss the personal element of Orange employees and their willingness to promote the brand and collect feedback in personal settings. This personal association with Promoters and Detractors made them an ambassador for the brand with a personal responsibility to create Promoters.
 
Some of their lessons learned include:
  • NPS is a reliable and meaningful KPI.
  • Create value across the customer journey.
  • Identify where it hurts.
  • Benchmark performance across operational units.
 
 
He shared data that proved a direct correlation between churn rates and NPS, once again demonstrating the financial benefits of NPS.  They also found that Promoters bought 2.5X Detractors.  This is a critical factor in their growth given the cross-sell opportunities their product extentions offer.
 
Among the factors of recommendation, customer experience is the most important, making up 40% of their overall NPS.  Measuring NPS after interactions allows them to continuously improve the customer experience and improve NPS.  He shared two stories of monitoring NPS at key touch points and how the front line was able to deliver measurement improvements in NPS through verbatim analysis and management incentives.
At the end Dominique shared their plans for 2008:
 
  • Gain a better understanding of what creates Promoters.
  • Simplify the customer journey.
  • Investigate a speech recognition tool to collect feedback.
  • Use NPS as a KPI for the general management community throughout Europe.
  • Continue to increase NPS in consumers' minds.
 
Another story of an organisation using NPS to drive cultural change to focus on the customer and achieving measureable results!
 
Click here to download the presentation.

                

                
... more >>

                


                        
                            0 Comments
                        


                    
                        Permalink
                    

                    Tags:
                         b2c,
                         orange,
                         soudais,
                         eastman,
                         france
                    

                

            

            

        

         
         


            
            


                

                    

            
                DebEastman
                    

                



                
                


                    

                

                

            

            


            
            
            

                

		    		
Satmetrix CEO Richard Owen discussed how companies respond in tough economic times. As we face a potential recession, how much money should companies spend on improving the customer experience?
 
Public company accounting standards make it difficult to optimize for growth as they reward profits. Short term profits may not be good for long term success. To illustrate this point he describes two examples from the financial services area, the subprime mortgage crisis and credit card introductory rate offers. In both cases, the customer is happy during the initial period when the "special offer" is in effect. However, when the introductory rate expires, customers become disappointed and promoters become detractors impacting the long term sustainable value of acquiring that customer.
 
Next he discusses what we can learn about how companies react in a recessionary economy. Due to the rules of the public financial markets, large companies tend to turn to cost cutting measures to manage through recession. This is a natural tendency as the market rewards profits. However, small companies that are not tied to the public market tend to increase their focus on the customer instead of cost cutting, often investing in customer acquisition and retention.
 
Years of research revealed that in a recession economy companies that react by investing in areas such as R&D, Marketing and customer strategies grow and capture market share better than their cost cutting competitors. These winners use profits as a cushion vs. cost as a cushion.
Now let's take a look at three companies that have achieved significant success, but recently experienced declining market value; Dell, Starbucks and Charles Schwab. All have recently seen significant decrease in their stock value and constrained growth. In times of growth, these organizations brought in professional business leaders. As part of their turn around strategy they have brought back the original founders and put the customer back in the driver's seat, returning to the small company mentality. Charles Schwab has a strong focus on Net Promoter. Dell and Starbucks are engaging large groups of customers to provide input on new products and experiences by listening to customers through idea sharing.
 
Richard goes on to suggest that companies would be wise to take advantage of the wisdom of crowds. While most companies create panels and focus groups to collect feedback and extrapolate the learnings to the larger customer population, he suggested this is like putting customers in the zoo. Zoos were created to allow us to observe animals in their natural setting since we can't all make it to the safari. Similarly, it's difficult to build relationships with focus groups and panels in ways that drives growth. In today's connected world, companies would be wise to engage the wisdom of the crowd and build relationships with a large portion of your market, not just a small sample size. Why visit the zoo when you have the option to go on safari.
 
The key takeaway points:
 
  • Richard laid out a compelling case that investing in the customer during a recession presents significant opportunity, moving focus from short term profits to long term value.
  • He discussed how short term programs to lure customers have significant negative long term impact as illustrated by the recent subprime crisis and credit card "introductory rate" offers.
  • He illustrated the differences between big company tendency to cut costs, driven by the public markets, vs. small company focus on long term customer value through the discussion of the founder return to companies such as Dell, Starbucks and Charles Schwab.
  • Take advantage of the wisdom of crowds and build relationships with your customers that allow them to guide your strategies in ways that improve loyalty and drive growth.
 
One final note, Richard stated that economists have predicted 9 out of the last 5 recessions. So much for their crystal ball!  In any case, it's clear listening to many of the speakers this morning that focus on customers pays off, regardless of the larger economic picture.  Read on to learn more about results at LEGO, Orange, Logitech and others.
 
Click here to download the presentation.

                

                
... more >>

                


                        
                            1 Comments
                        


                    
                        Permalink
                    

                    Tags:
                         owen,
                         richard,
                         nps,
                         satmetrix,
                         methodology,
                         eastman,
                         conference
                    

                

            

            

        

         
         


            
            


                

                    

            
                DebEastman
                    

                



                
                


                    

                

                

            

            


            
            
            

                

		    		
Fredreichheld4The conference wrapped up with a "fireside" chat with Fred Reichheld, author of The Ultimate Question, with moderation by Dr. Ralph Oliva, Executive Director of the Institute for the Study of Business Markets at Penn State University. His passion for the importance of NPS as a key business metric is clear, and it's hard to argue with the facts. Fred offers some practical advise for those embarking on the NPS journey.

 
The focus on Net Promoter started because he saw a fundamental disconnect in the world. Business had come to the conclusion that loyalty was irrelevant, yet the best businesses were living up to the highest standard, the golden rule. He set on quest to prove that loyalty is driving market leadership.
 
 
 
"You can't grow business unless you treat people so they want to come back and bring their friends," Fred states several times during his discussion.
 
 
When asked what he found most surprising, he indicated that while he worked hard to simplify, he is surprised at how others have oversimplified. Organizations seem to be skipping the fact that NPS is a discipline, not a score. It's not a marketing thing, it's a people thing. People want to be treated in a specific way and when you want to grow, customers come first.  

 
The other area Fred stressed is not to average NPS, which provided a nice link to Rob's segmentation discussion earlier today (see my notes to that talk). Specific customers drive profitable growth, and it's important you look at NPS based on your customer segmentation. Breakthrough innovations come from understanding the most valuable customers across the organization.  

 
An area Fred stressed several times was the cross-functional nature of the NPS discipline. The most successful businesses that have embarked on NPS have not delegated to marketing or research, but kept it at a senior level and started with a few dozen of their most important customers. Senior executives have to drive the change across the organization and get involved directly in following up with customers.  

 
When asked about NPS skeptics, Fred suggests that organizations start by looking at the facts in their own business. You have to know how much to invest for each type of customer.

 
If NPS is to be integrated into the key performance indicators of business success, we must engage the CFO. For those getting started, get your CFO aboard. Until the CFO is onboard you won't get too far. You need them to see that loyalty and the financial metrics work hand in glove.

For those that have existing satisfaction systems, Fred suggests that if it is working great, keep it and don't change it. However, he goes on to point out that 95% of businesses don't have the right system and putting in an NPS framework allows you to step it up to a strategic level and "re-brand" your process to engage your customers.

 
When asked about response rate targets, he has set the bar at 95%. Today's best in class companies are finding 60% or more on their relationship surveys and expect to see that increase. Intuit earlier shared their success of 95% response rates for their Personal Pro Response rates, demonstrating the success you can achieve when you build customer feedback into your products and processes.  Closing the loop with the customer and demonstrating that you are listening is key to driving higher responses rates.

 
In an interesting moment, Fred asked himself a question of who has impressed him the most and turned him into a Promoter, clearly demonstrating his desire to show off his brand advocacy. Not surprisingly he noted Apple. After sharing his personal experiences he went on to explain that when Apple launched their stores they were designed not to sell more product, but to create Promoters. Clearly a strategy that is working for many as I'm currently typing this blog on my new MacBook Pro as a result of several Promoters that had shared their experiences with me! (Blogmaster note: Scott Smith agrees with Fred and Deb; read his blog on Apple and customer experience.)

 
For those of you starting on the NPS journey, Fred offers some practical advice. Get your senior leadership in a room and ask yourself: 
  • What is the true objective? 
  • What is wrong with the current process?  
  • Who is going to close the loop? 
Get your customers involved in designing a program that will engage them and drive the right changes in your business to increase loyalty and drive growth.

 
And finally, when asked about his vision for the future, Fred sees NPS as a new metric system for measuring business success. He hopes to see more people across the enterprise engaged in using the NPS discipline and attending conferences such as this one. This level of adoption will likely lead to the need to audit scores. Once you tie to compensation, funny things will happen. (Blog master note: for a discussion on connecting NPS and compensation, go to this discussion forum link; brief registration process required for viewing.)

 
As the conference wraps up we all have a lot to take home and think about. Thank you to the Satmetrix team that created this opportunity to learn more about how to transform our business and truly adopt the NPS discipline. 
Prior to NPS, we had a system that measured one thing, accounting. Business has shifted from the need to treat customers properly to the need to make my profits. While integrating NPS into core business metrics is a journey, we have made great strides in the past couple of years.

                

                
... more >>

                


                        
                            0 Comments
                        

                        
                            0 References
                        

                    
                        Permalink
                    

                    Tags:
                         deb-eastman,
                         institute-for-the-study-of-business-markets,
                         bain-&-company,
                         best-practices,
                         fred-reichheld
                    

                

            

            

        

         
         


            
            


                

                    

            
                DebEastman
                    

                



                
                


                    

                

                

            

            


            
            
            

                

		    		
BarrysaikBarry Saik shared the experience of Intuit in using NPS to drive product design and user experience.
 
As anyone who has read The Ultimate Question knows, Intuit has embraced NPS as a key metric of the business. When getting started, they debated whether to invest in competitive benchmarking.  Barry's advice to anyone starting on the NPS journey is to invest the time in mapping yourself relative to your competitors on the growth vs. NPS charts from Fred's book, The Ultimate Question.  
Another best practice Barry stresses is to use your verbatim comments. When reviewing verbatim comments in more detail you can gleam insights that your survey may not produce. Some tips he offered:
 
 
  • Categorize verbatim comments, ranking themes to provide further analysis of common concerns or opportunities. He shared their own experiences on how the verbatim comments are used to drive product development.
  • Intuit uses a product from Informative that allows the users to "vote" on responses from other customers. This allows an organization to find the top of mind issues they may not have previously offered as options on the survey.
  • Don't let your teams suggest it takes too much time. Print out the comments and comb through them for that nuggets your customers share.
 
It's important as well to look at issues that can affect your data. He shared a number of charts that breaks down their NPS scores by product line and seasonality. Understanding the context of your customer's responses increases your ability to use the data in a relevant manner. A prime example we can all relate to was their NPS scores relative to the tax season. By time-analysis they have found that NPS declined as the tax season progresses since early users are likely to have returns vs. those of us that wait till the last minute to write that check to Uncle Sam.
 
 
Another way Intuit is leading the pack in building Promoters is through their community site, The Inner Circle.  This is an online community where they can engage with promoters in a richer way.  They have found the members enjoy community participation and sharing their ideas with other customers, giving them a great community for building promoters and collecting insights for product development. An unexpected side effect of this community is a 4.5 star rating on Amazon largely driven from customers that had early access to products. 
 
 
Intuit has clearly embraced customer centricity and is seeing the results. One of my favorite comments from Barry today was "If you do the right thing and listen to people, they will get on your side and help you out." Too many organization are doing what they think is the right thing for their business and need to re-engineer around doing the right thing for their customers. 

                

                
... more >>

                


                        
                            0 Comments
                        

                        
                            0 References
                        

                    
                        Permalink
                    

                    Tags:
                         b2c,
                         intuit,
                         deb-eastman
                    

                

            

            

        

         
         


            
            


                

                    

            
                DebEastman
                    

                



                
                


                    

                

                

            

            


            
            
            

                

		    		
RobmarkeyRob Markey of Bain shares his insights and experiences on how customer segmentation can be used to improve loyalty and drive growth by targeting your offerings in a manner most relevant to your target buyers.

 
There are six basic things that companies should do to define and deliver to their target buyer, yet very few actually do this. 
 
  1. Design their target that have similar needs that can be met by the company
  2. Develop a relevant value proposition
  3. Acquire more attractive customers
  4. Deliver excellent customer experience
  5. Cross sell, grow share of wallet
  6. Deliver more profit per customer
 
Bain research has found that only 23% actually deploy this discipline. Yet the companies that do are experiencing and an additional 10 points of growth.

 
He shared a case study of a Big 4 audit firm faced with little differentiation and slowing growth.  Through segmentation analyses they found larger companies in regulated industries made up the larger percentage of profitable Promoters. Through better aligning resources with this segment and re-branding to focus their attention in these markets, they expect to achieve double digit organic growth.

 
In another case study, Bain assisted a pet store chain that was experiencing a declining stock price. Through segmentation and understanding the "pet parent," they transformed the store layout and developed new services to specifically target this segment. As a result of their focus on this buyer they have enjoyed significant turnaround in their stock price.  

 
The difference between satisfaction and loyalty is ordinary serviced delivered exceptionally, and exceptional services/features delivered well. "Moments of truth" must be prioritized so you can address those most valued by your customers. Rob introduced a quadrant for evaluating touch points along two axes: potential to delight and impact of failure. This allows an organization to evaluate those touch points that may have the greatest impact on customer loyalty. From here, organizations should view their processes from the customer prospective vs. their own internal functions. This is the key to unlocking the value.

 
Rob leaves us with an important point. Don't ask the ultimate question unless you are prepared to listen. This has been a consistent them of putting NPS into action.

                

                
... more >>

                


                        
                            0 Comments
                        

                        
                            0 References
                        

                    
                        Permalink
                    

                    Tags:
                         b2b,
                         best-practices,
                         b2c,
                         bain-&-company,
                         deb-eastman
                    

                

            

            

        

         
         


            
            


                

                    

            
                DebEastman
                    

                



                
                


                    

                

                

            

            


            
            
            

                

		    		
SimonlyonsAnd lastly in the B2B track we heard from Simon Lyons, Global head of Marketing & Communications at Aggreko. He clearly demonstrated his mastery of NPS and driving change in his organization.

 
Simon described being motivated by the feeling of lacking meaningful data in the boardroom. While the financial team brought in their data, the marketing team was looking in the rear view mirror and not driven by the voice of the customer. He found Fred's HBR article (The One Number You Need to Grow) a defining moment, embraced the simplicity of NPS, and rallied the organization around it.

 
Internal selling required he break the silos and move marketing to the bleeding edge. Others sensed a shift in power and skepticism in the data. Simon pushed on and embarked on a NPS journey.
 
They developed a 10-question survey with the following components:

 
  • Would you recommend?
  • 4 questions to understand the drivers of loyalty
  • Value for money
  • Experience variance on expectation (open)
  • Nominate one area of improvement (open)
 
The benefits were clear. Real-time data gave them the opportunity to respond immediately. Through account level engagement they were able to justify the system in one deal uncovered by the sales rep due to follow-up from the survey process.

 
Simon states, "NPS has changed our business". It's standardized, customer-defined and fact-based. It has given increased visibility into the relative value of loyalty drivers and recalibrated operational efficiency at the customer interface.

 
Not unlike other speakers, keys to success included CEO-driven, integration into the business, and executive buy-in as indicator of growth. In fact today, every area manager at Aggreko knows his or her score and loyalty data is included in the board package as a key indicator of the health of the business. (Blog master note: this is a similar strategy noted in Andy Sernovitz's blog on Experian's best practices.)

 
Simon took us on a journey of evaluating the financial health of the business through the loyalty lens. As Simon shared several charts and graphs used throughout his organization, it strikes me that we are creating a framework for evaluating the health of the business similar to the traditional financial metrics such as the P & L and balance sheet. We have a real opportunity to shift the focus from current state analysis to predictive analysis of the future business.
 

Could this be a sign of things to come?
 
For more details, read about their Net Promoter program with Satmetrix here: http://www.satmetrix.com/casestudies/aggreko.htm
 

                

                
... more >>

                


                        
                            0 Comments
                        

                        
                            0 References
                        

                    
                        Permalink
                    

                    Tags:
                         aggreko,
                         deb-eastman,
                         b2b
                    

                

            

            

        

         
         


            
            


                

                    

            
                DebEastman
                    

                



                
                


                    

                

                

            

            


            
            
            

                

		    		
MartinchristianMartyn Christian, Vice President, Marketing & Content Management at FileNet shared with us his journey of deploying an enterprise-wide customer loyalty program.

 
When embarking on the program, they had the following goals:

  • Increase Promoter population
  • Increase customer and partner loyalty
  • Increase revenue & profitability
  • Increase sales efficiency
  • Build barriers to entry for competitors
 
 
Previously they had a fragmented customer relationships model and no way to evaluate customer experience. Since deploying their program they have enjoyed a 26% increase in NPS, increased revenue, and growing profits.

 
Some of the best practices included:

 
  • Based on customer feedback, they developed 32 company wide improvements and shared this plan with their customers. That is another common success factor shared by many — communicating results and action plans with your customer.
 
  • The CEO laid out a strategy to drive financial performance including a customer loyalty goal for all employees. Can you say executive sponsorship?
 
  • They involved all employees with customers, from engineers to executives. The CEO even took to this seriously enough to review customer satisfaction issues on a global call every Monday morning. Now, that's organizational alignment!
 
  • They defined a strategy map where they clearly tied growth to enhancing customer value, and operational goals were defined from the customer prospective (based on real customer feedback).
 
  • Immediate action was taken with customers that scored 6 or less. The response would be reviewed and assigned it to someone to call the customer immediately. Sounds like accountability to me.
 
Filenet created customer advocacy to the point where in one story they had a customer willing to go to the boardroom and promote a multi-million dollar purchase vs. a competitor offer for "free". The customer was successful in selecting Filenet and shortly afterwards IBM acquired Filenet for $1.6B. Now that's results.

 
Their #1 learning was that this is a change for the people inside the company. Emphasize accountability, goals and educating people so they are able to deliver. Some other tips offered:

 
  • Don't over complicate, keep it simple
  • Create strong transition/change management — remember it takes time
  • Share information across all disciplines — find the change agent
  • Rethink functional roles and responsibilities
  • Integrated into compensation
  • Do not call this program or initiative, it's a way of doing business
  • Prepare the company — education through out the organization
For more details, read about their Net Promoter program with Satmetrix here: http://www.satmetrix.com/casestudies/ibm.htm
 
 
 

                

                
... more >>

                


                        
                            0 Comments
                        

                        
                            0 References
                        

                    
                        Permalink
                    

                    Tags:
                         deb-eastman,
                         b2b,
                         filenet
                    

                

            

            

        

         
         


            
            


                

                    

            
                DebEastman
                    

                



                
                


                    

                

                

            

            


            
            
            

                

		    		
PanelWe wrapped up Day one with a panel discussion moderated by Richard Owen with executive participation from Charles Schwab, GE Real Estate, and Mellon Investor Services. In their opening comments, each of the panelists shared a summary of where they are today regarding NPS.  

 
Troy Stevenson of Charles Schwab shared important insight from "Chuck." In a recent meeting, Chuck indicated that focusing on the customer was a guiding principle for how they built the business and lack of focus in the organization caused it to lose their way: an important lesson for all of us as the business grows and your attention moves from customer-centric to financial-centric metrics.
 
 
Bernhard Klein Wassink of GE Real Estate shared how they found the need to build both a marketing and loyalty focus. Bernhard has built the marketing organization based on the insights they found from their customer feedback processes.

 
Barton Hill of Mellon Investor Services shared his challenges of being in a mature, competitive market where supply exceeds demand. They started on an NPS journey as a result of identifying ways to differentiate. While traditional market research gave them initial customer insight, they needed a continuous process for evaluating customer pain points and delivering relevancy.

 
Richard started the discussion with the question of how well the organization embraces customer centricity as a core value. All responses clearly demonstrate customer centricity as a core value.  Mellon found that market research data was not timely enough to engage the organization and they find value in real-time feedback. GE found that value in simplicity and how the people on the front line were able to take this and run with it. Schwab found that the field was thrilled to see the focus driven from the top.

 
It's clear that executive sponsorship and focus is critical to success. Yet, when the audience responded to the question of how many organizations have the CEO as the key driver of customer loyalty less than 20% of the room raised their hands!

 
Next we went on to discuss the elements of program design. Both GE and Schwab have found value in rapidly taking action around detractors as a critical element of their program. Mellon found that most deals come from referrals, so they have focused on driving new business through client references.  

 
There were so many great insights shared, but in the spirit of sharing the most interesting points, here's a summary of other key takeaways:

 
  • Schwab found NPS higher in touchpoint surveys because of the recent interaction
  • GE found that promoters had 84% higher likelihood for repeat business
  • Mellon was able to double win rates by using NPS to select customer references in new pursuits vs. account team-reported relationship metrics
  • All participants suggested you focus on pilots before full rollout
  • None of the participants are linking employee loyalty to customer loyalty, yet; all indicated this might be a future initiative.
 
Throughout the day there has been a great deal of discussion around the correlation of growth and NPS. While there are many factors that drive growth, who can argue that loyal customers drive financial performance? My observation is that the organizations on the stage today truly embrace customer centricity. This may cause them to build better products, improve service touch points and communicate in a more customer-relevant manner. While this may not specifically tie to their NPS measurement programs, they are all factors that improve customer acquisition and retention. Doesn't that mean that building a customer centric enterprise drives profitable growth? Isn't NPS a measure of customer centricity?   

 
Today has been a great day of sharing best practices and lessons learned. I'm looking forward to another exciting day tomorrow including insights from Fred Reichheld, Bain and Intuit.

                

                
... more >>

                


                        
                            0 Comments
                        

                        
                            0 References
                        

                    
                        Permalink
                    

                    Tags:
                         b2b,
                         b2c,
                         deb-eastman,
                         financial-services,
                         charles-schwab,
                         general-electric-(ge),
                         mellon-investor-services
                    

                

            

            

        

         
         


            
            


                

                    

            
                DebEastman
                    

                



                
                


                    

                

                

            

            


            
            
            

                

		    		
In the B2B track, we heard from Dr. Laura Brooks of Satmetrix, Martyn Christian of FileNet, and Simon Lyons of Aggreko. All of these presentations highlight key themes for success in realizing gains in NetPromoter scores that drive business results. The consistent themes of these speakers clearly demonstrate best practices that must be deployed to drive growth.

 
To start with Laura shares her research on the best practices observed in the Satmetrix customer base. By analyzing customers, she has found 4 key elements to success:
 
  • Executive foundation: This is not a vision or mission statement, but a way of doing business, led from the top. This means putting investment behind it and driving change throughout the organization. This is key to realizing the value of NPS. If your leadership is paying lip service to customer centricity, you will not see the value of NPS or any loyalty program.
  • Organizational alignment: We heard this as a key theme to Experian's success earlier today as Laura DeSoto shared the techniques they deployed to align the organization around delivering a superior customer experience. To what extent does every part of the organization really focus on the customer and how to you translate that to every employee's role?
  • System infrastructure: You need the supporting system infrastructure to enable the collection, analysis and accountability of customer insights. You must have the systems in place to deliver data quickly to every employee and make it actionable. We heard from several speakers today that traditional market research data is not timely enough to enable the organization to quickly respond to customer feedback.
  • Process integration: You must integrate the data into the natural flow of the business to truly drive customer centricity throughout the business.
 
Laura's presentation had much more insight into the best practices for moving your Net Promoter score. John Williams shares more in his posting "Measure Who Matters!"

                

                
... more >>

                


                        
                            0 Comments
                        

                        
                            0 References
                        

                    
                        Permalink
                    

                    Tags:
                         b2b,
                         best-practices,
                         satmetrix,
                         deb-eastman
                    

                

            

            

        

         
         


            
            


                

                    

            
                DebEastman
                    

                



                
                


                    

                

                

            

            


            
            
            

                

		    		
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 3rd 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.

                

                
... more >>

                


                        
                            0 Comments
                        

                        
                            0 References
                        

                    
                        Permalink
                    

                    Tags:
                         das-narayandas,
                         best-practices,
                         deb-eastman
                    

                

            

            

        

         
         


            
            


                

                    

            
                DebEastman
                    

                



                
                


                    

                

                

            

            


            
            
            

                

		    		
http://netpromoter.typepad.com/.shared/image.html?/photos/uncategorized/charts.jpghttp://netpromoter.typepad.com/.shared/image.html?/photos/uncategorized/charts_1.jpgRichardowenThe Net Promoter conference is off and running with a full house. We are sitting in a packed room with eager students ready to learn about how companies are applying Net Promoter to drive business performance. Richard Owen shared with us the demographics of our fellow attendees representing several industries from financial services, pharma, consumer goods, industrial and tech companies from all regions of the world including representatives from Latin America, Europe, North America and Australia. The buzz of Net Promoter is clearly spreading across the world.
 
 
 

After a warm welcome from the Satmetrix executives, we got started with Laura DeSoto, SVP of Innovation & Synergy at Experian.
Experian: Discipline and Patience Pays Off in Double-Digit Growth
 
Experian was faced with a mature market, highly competitive with similar go-to-market models and single-digit growth. Their goal was to differentiate their business by creating a unique customer experience. In today's economy, so many of us face this same challenge.

 
 
Laura did an excellent job of sharing their journey, and it's clear these types of programs are a journey. Fortunately for Experian, their journey is paying off. They have successfully doubled their NPS over the last 6 quarters and achieved double digit growth in both revenue and profits in a market of single digit growth. 
Some of the key lessons learned from Laura's journey included:

 
  1. Creation of the brand promise through understanding their customer segments and crafting a promise relevant to those segments.
  1. The biggest challenge was organizational alignment. Given that delivery of a superior customer experience is in the hands of each employee, employee engagement is critical. Some of their best practices included:
  • Identifying change leaders across the organization that dedicated 50% of their time to advocate their customer experience program
  • Creating a learning map to communicate to all parts of the organization
  • Delivered workshops for every employee to understand the promise and how translates to their function.
  • Ongoing communication to everyone at all levels. This is not a one time thing!
  1. Selection of the right partners to support deployment for ongoing feedback. Experian's criteria included:
    • Reliable methodologies
    • Global sample management with the ability to segment at multiple levels
    • Security & other technology support
    • Reporting capabilities
    • Integration with Siebel CRM system
    • Linkage to business results
 
My key takeaways:

 
Alignment across the organization is key and from what we heard today, Experian took this task seriously, providing every employee the tools they need to truly embrace and deliver on the promise.

 
Another key learning was the patience shown by the Experian leadership. In their first 14 months, they actually saw their scores decline.

 
 
Some organizations do not have the patience displayed by Experian and therefore many not have enjoyed the benefits achieved in the last 6 quarters of double digit growth and 100% improvement in customer loyalty! Change takes time and commitment. Impacting NPS and realizing the financial benefits associated with this takes time.

 
 
 
In between the next speaker I'll share with you the other sessions from Das Narayandas and GE Healthcare. Stay tuned....
 
For more details, read about their Net Promoter program with Satmetrix here: http://www.satmetrix.com/casestudies/experian.htm
 

                

                
... more >>

                


                        
                            1 Comments
                        

                        
                            0 References
                        

                    
                        Permalink
                    

                    Tags:
                         b2c,
                         deb-eastman,
                         b2b,
                         experian,
                         satmetrix
                    

                

            

            

        

         
         


            
            


                

                    

            
                DebEastman
                    

                



                
                


                    

                

                

            

            


            
            
            

                

		    		
 
 

                

                
... more >>

                


                        
                            3 Comments
                        

                        
                            0 References
                        

                    
                        Permalink
                    

                    Tags:
                         deb-eastman,
                         best-practices
                    

                

            

            

        




        

    

    


 




     



 
 

     




         
             

                 

                     

European Conference Blog 2008






   loading...

                     

                

             

         




    
    

		



            

				
Actions


                
			



	
		

    

    



    
    

        

            
Popular Blog Posts