European Conference Blog 2008

The Insider's View: What your Employees Have to Say about Recommending You

info@netpromoter.com — Tue, 27 May 2008 22:03:05 GMT

Holcim may not be a well known company on first pass, but after hearing the facts, you will wonder why you never heard of them. A couple of interesting things: They've grown in the last 4 years from having 44,000 to over 100,000 employees. Their strong growth, just like Symantec's, was fueled through acquisitions plus organic growth.

Holcim's rapid growth pushed the organization to get more systematic processes and metrics in place. As an Engineering company, Christian Birck, Head of Branding for the company, said "everything was a measurement" and that management was used to numbers. However, they had no metrics on people or customers.

The company had another challenge in that they had a mixed model. In some markets they were B2B; they sold to construction companies. In others they were B2C and sometimes B2B2C. Christian showed a great slide that said this industry was "not the sexiest, but real." As such, one of their challenges was in recruitment. As well, they knew they needed to keep the good talent they had, but focus on getting more.

So, according to Christian some of the key business challenges were:

Organic growth and threat of commoditization
Getting right talent and enough of them
Building and protecting their reputation  this is particularly important in their business

Because Holcim does not enter different new markets lightly, they are extremely focused on the long term. They believe one of their key differentiators is their people  how their employees fit and exemplify the values of the company. The list of things they wanted to accomplish included:

Making their people ambassadors for the company
Focusing all employees on delivering on company promises
Fostering a culture of customer orientation
Facilitating knowledge-sharing
Facilitating integration of new acquisitions

I thought Christian did an excellent job of explaining that "Brand does not equal logo, or advertising." He believes that the brand promise has to be communicated in products, communications, behavior, and channel experience. This means you really have to deliver to this.

In addition, through their complex business, it wasn't just their employees who had to live their brand promise, but their partners as well. This was a challenging aspect for them, to make sure channel partners also were also ambassadors of the brand.

One of the programs that the company put in place was something they called "Living our Values." This included: vision, mission, and values with some support systems. For their industry, Holcim felt that trust was low, so the ability to differentiate on values was critical. Christian wisely pointed out that anyone can put values in words, but it was how you get the organization to understand and live the values that was the challenge.

Holcim put in some change management processes to reinforce their message. One of their principles was: Enough of us for long enough. This message went back to the earlier point about retention and recruitment. Another key differentiator in terms of Holcim's messaging around this was "it is not just another program". For them, the word "program" meant it was fleeting, not permanent, and they wanted everyone to take this seriously. They focused on leadership as well, having them engage, communicate, and reinforce aligned behaviors.

One of the other enlightening statements from Christian was that you "Don't have to have a big brand for employees to believe in you." In my experience, this is very true. It is the extent to which you live the values as a company, and the extent to which these values also align with employees' own personal values.

From a measurement perspective, Holcim collected two types of NPS: (1) measuring recommendation of products and services, and (2) measuring whether employees recommend Holcim as an employer. What they found was that the recommend score for products and services was very high, but scores for recommending Holcim as an employer varied dramatically.

So, this measurement of employee promoters told Holcim the extent to which they were making progress. For their large complex business, they realized that some actions took a long period of time, and that too frequent reporting of the metric could be counter productive, in that management had to see progress.

They also found that it was difficult to sometimes prioritize empowerment drivers, as well as what things the company could actually influence.

Finally, one of the other things they realized in trying to develop trackable metrics was that there seemed to be a strong cultural bias in answering questions. There were dramatic country-level differences. This did not surprise me however, as we have seen this as well at Satmetrix. Christian wisely pointed out that they don't compare scores between countries, nor did they consider normalization as this would be hard to communicate and take away the very thing they like: the simplicity of the measurement.

What did I learn from Christian's presentation? Holcim's story is similar to Symantec's -- large complex organizations take time to change, but both have implemented many successful mechanisms and practices to try to help them get there. Holcim is also somewhat similar to Travel Counsellors in that they recognized that the individual employee was critical to representing their brand. The added twist with Holcim was trying to also reinforce their "promise" through their partner channel. Perhaps at next year's Net Promoter Conference we will see more about this last dimension; one that I'm sure many companies are trying to get right as well.

Click here to download the presentation.

Delighting Employees, Business Partners, and Customers with a Personal Touch

info@netpromoter.com — Tue, 27 May 2008 20:57:38 GMT

Travel Counsellors is a company comprised of 900 travel counsellors in 7 countries with 20 years of experience. They have experienced rapid growth in a very interesting marketplace; counsellors providing travel guidance out of their home offices. Most of the motivation in being a travel counsellor is a) being well paid, but more importantly, b) getting recognition for helping and giving their customers successful, enjoyable trips.

Malcolm Hingley, Sales Director at the company, stated that "our success is our relationship with our customers, and that's what sets us apart from the rest."

The travel business has changed dramatically. There are two components to it -- a relationship aspect as well as a transactional aspect. Many travel businesses have traditionally focused on the transactional nature of travel, but it is a critical differentiator to also focus on the relationship (partnership) aspect as well.

It seems the travel industry in general has not established itself as a shining example of customer loyalty. One statistic Malcolm reported was that 2 out of 3 customers would not return to their travel agency. The reason, he said, is that many customers felt that these travel agencies were primarily out "take my money." There was no interaction, they were only interested in the next customer. He said other agencies' customers felt that there was no caring and that this was a very short term perspective.

Amidst this backdrop, Travel Counsellors was interested in engineering the experience quite differently. Malcolm discussed the 12 golden habits. Some of their findings were these gold habits had nothing to do with the sale, but about the unexpected moments that motivate customers to refer.

Of the 12 golden habits; it is really interesting that none of these are sales oriented. As Malcolm put it, it was all about making the customer feel special. Some of these include:

Give the customers great reason to talk about you
Have an emotional connection in everything we do; it is not enough to know about the transaction but to truly understand our customers' lives.
OK sales people have customers, great sales people have friends.

I really liked this list, and especially its non-sales approach. It focuses on the right thing -- the customer -- and not the transaction or sales event. As well, it must make Travel Counsellors feel good that they are working toward this greater goal.

One of the things that Travel Counsellors also validated in the UK, was that NPS that was more relationship-oriented tended to produce higher scores, while convenience-based bookings through the Internet have the lowest recommendation rates. These seemed to substantiate their 12 golden habits. Travel Counsellors had on average a score of 82% while their competitors had much lower scores.

Travel Counsellor also introduced TCS (Travel Counsellor Score). They wanted to also validate the external study internally. They asked how likely is it that you would recommend your travel counsellor? Notice that they altered the wording to be person specific, not about the company. This was critical, because it was in fact that very personal relationship with the counsellor that they felt made the difference.

On this method they scored 94% on over 30,000 customers. To explain, Malcolm said that part of this score is based on their belief that there are no limits for what you could do for your customers. He gave the example of one woman who owned a horse, and that she would personally ride out to each of her customers to deliver their tickets personally.

So what were some of the key messages from this presentation? I'll summarize Malcolm's list:

Don't transact, relate.
Keep investing in the relationship.
Communication is key to keeping your customers engaged.
Make it personal. (This is a large part of the company's plan going forward. One of the things that Travel Counsellors is doing is rebranding their marketing material around the name of the counsellor, so it is now person-specific.)
Don't oversell.
The power of 'thank you' is huge.

Toward the end of his presentation, Malcolm showed some great short videos in which customers gave feedback about their positive experiences with their counsellor. These customers were extremely real and enthusiastic in their praise. One thing (albeit many) that I took away from this presentation was the "make it personal" message. Travel Counsellors realized that their brand was really represented by their ambassadors; their counsellors. They were very savvy in recognizing that it was the individual personal relationships that mattered, even in terms of how they asked the recommend question. Thanks for an eye-opening presentation, Malcolm.

Click here to download the presentation.

Transforming Employee Behavior: An Integrated View of Loyalty

info@netpromoter.com — Tue, 27 May 2008 20:33:43 GMT

Alexsandra Alfonso, Senior Global Manager of Customer Experience Programs at Symantec, began her session by discussing the past 3 years of tracking Net Promoter at Symantec. What was particularly interesting was the significant amount of change and transition that has happened in Symantec as a result of merger acquisitions, the largest of which was Veritas. Alex compared and contrasted the before and after view of what this meant by revenue, acquisitions, employee portfolio, customer locations, and values. Throughout these major transitions, Symantec was able to keep their core company values -- innovation, action, trust, and a customer driven philosophy -- intact.

Alex articulated Symantec's mission, which was to enable and empower individuals to create change in the business, to improve customer experience. I like this mission as it really brings together two key components in one mission statement, the employee and the customer.

Alex outlined the history of NPS at Symantec. She indicated that the primary concern early in 2005 was to establish a sound baseline, and from there, to look at key drivers and what impact these were having on the customer.

There were several program elements that Symantec focused on initially. One of these was a customer loyalty champion program. Employees from various business units who were passionate about customers were selected to participate. Their role evolved over time, but initially they focused on aligning products and process (not surprising given the amount of change through the merger process). Also, they focused on creating quarterly executive summaries of the results (these also transformed over time). Finally, they realized that all employees needed to be aware of the individual role they played in customer loyalty. Throughout this time, Alex mentioned that Symantec was more focused on operational issues and less focused on loyalty (meaning there were many competing priorities). They tended to operate from an internal point of view and perhaps lower executive involvement than they would have liked.

Today this has changed; Symantec has launched efforts around the "power of one, the power of the individual."

One of their biggest learnings from their early program was the importance of making individual business units accountable for the results. Alex showed how their process has changed in terms of key improvement steps, which include insight, inform, action, and measure model. This happens in all areas of their complex key stakeholder relationships -- B2B, employee, B2C, and partner.

Symantec also realized that the customer loyalty champion was critical to making NPS success real. The role has changed, though -- they are putting more structure, framework, and definition around the role, for ultimate success. They've also reframed the executive summary process -- these now take place at the highest level and issues are really owned by the business.

Finally, employee awareness education has gone though huge change, by communicating through multiple mechanisms, including webcasts and online training, giving employees the power to make change and take action locally. These awareness enhancements have enabled employees to participate in generating creative ideas to improve how Symantec operates.

Alex noted that now Symantec is focused more on business change and less on operational actions. They rely on root cause analysis to really understand business change.

Their latest stage of improvement is now focused on named account surveys. This requires a very mature sales organization that has really bought in to the program. Symantec is using this feedback as part of an integrated account review process. Although there were some associated changes that had to be made, she said the benefits were huge.

Symantec has also implemented the Customer First Award. Employees are nominated quarterly, which helps drive attention around customer loyalty. I believe it is these grass root efforts that really motivate employees to focus on the customer.

NPS is now included as part of the executive compensation package at Symantec. Alex said that this action really helped solidify the belief that this was "serious." It made executives think that perhaps their staff was out of alignment with their goals, potentially pushing ownership of NPS downwards in the organization.

I thought one thing that was interesting was the clarity the company Chairman has on communicating what's important. There are 3 metrics -- NPS, market share, and ENPS (Employee Net Promoter Score). The Chairman and COO recently delivered this message to all 5000 sales and marketing employees.

Some critical learnings from Alex:

It is vital that employees understand the impact they have on the customer. To do so, you must connect individual behavior to the impact on the customer.
The program must be owned by and driven from the top.
Make it actionable and make it positive; both of which are critical to NPS
Accountability and Reward; Compensation, if used appropriately, can help steer people in the right direction.
Communicate -- This is perhaps the most critical. Communication cannot just be internal, customers need to understand this as well.

I thought this was a great presentation that connected the dots between customer and employee behavior. As well, it was an honest look at a very complex organization that has gone through dramatic changes and has managed to keep the focus. I'm looking forward to seeing Symantec's future progression on this journey.

Click here to download the presentation.

The NPS Conference Re-Charged My Batteries - Alan Woollam

info@netpromoter.com — Thu, 08 May 2008 19:06:01 GMT

There are times during the year when convincing folk to take their first loyalty steps can seem almost as tough as trying to solve world hunger. So I was delighted to see so many companies eating well at the Net Promoter Conference in London. I was particularly encouraged to see more focus on leveraging promotors this year. Some companies get so embroiled in identifying and acting upon the root causes of detraction that they forget about leveraging their promotors. Aon highlighted major wins from referrals, saying, we are never too shy to ask for referrals. Creating communities is also a growing tactic to tap into a wealth of information promotors are only too willing to share, and they feel more valued as a result.

B2B Relationship Management - There were plenty of lively contributions during the roundtable sessions.

Several key themes emerged that can make or break a B2B loyalty programme in its first year.

Selecting the right clients -- Start small, do not rely on CRM databases for contacts and qualify through the account teams. Ask the principle customer contact to nominate additional key stakeholders within their company. Just asking accounts for a contact list can in itself uncover shortcomings. Account managers on top of their game can turn a request around within the week. The ones who procrastinate may not have the right relationships in place.
Stand in your customers shoes -- Getting the account teams to take the survey first (as the client), can yield very different ratings and a reality check!
Incentivise -- Reward account teams for participation and closing the loop with customers.
Can you deploy to clients where you have no relationship? Absolutely -- Deploying a Net Promotor programme into either a new account or an existing account with a new account manager is a great opportunity to assess the relationship opportunity and enter into new dialogue to feed the account planning process.

I'm back at the same venue this week participating at the Net Promoter Certification Course, and London weather is being kind to us this week, thankfully.

Click here to download the presentation.

A Fresh Perspective: How NPS Has Shaken Up the Status Quo and Delivered Results - Q&A with Fred Reichheld

info@netpromoter.com — Mon, 05 May 2008 01:00:56 GMT

Fred Reichheld has been thinking about the link between customer loyalty and a company's financial performance for 30 years. Somehow recently Fred has sparked a negative response from the market research community. So there you have it, a picture of Fred as the devil. Fred makes the point that Net Promoter is not intended to be the world's best predictor of future performance. Perhaps the best predictor of future performance is superior management based on intense focus on the customer. NPS is a tool for managers to drive a customer-centered strategy. That indeed is likely to lead to improved performance in the future.

NPS is different because it is motivational, it encourages people to want to invest in a relationship. The real goal is to turn everyone into a 10. Wouldn't we rather do business with someone whose customers are likely to strongly recommend them? Wouldn't you rather work for a company who delivers such value that customers strongly recommend? It is rather simple. More fundamentally, it strikes at the universal basis of good relationships -- the Golden Rule. Southwest Airlines, Four Seasons, and eBay, as examples, all practice the Golden Rule. Look at the eBay feedback system. eBay sellers need to maintain a good reputation by treating people right, otherwise their trust score dives.

How many people have gone to jail for fudging financial numbers? I think we read about it weekly. How many people have gone to jail for fudging loyalty scores? That would be zero! Fred's point is that our value system is controlled by the profit motive, without attention to long term value. Companies get away with bad profits all the time. Yet all of the companies who practice bad profits measure some form of customer satisfaction. Fred's slide pictured this as a gorilla (financial accounting) against a puppy dog (loyalty measures).

NPS is radical because it forces bad profits out of the system. NPS, if applied correctly, will come into conflict with short term gain. The Golden Rule does not come for free.

The business inspiration for NPS was Andy Taylor, CEO of Enterprise Rent-A-Car, who commented that the real way to know if your business is going to grow, is if your customers will come back and bring their friends. Enterprise took the customer satisfaction survey out of market research and put it in the hands of operations. To keep it simple he reduced the survey to two questions: "Would you recommend?" and "Why?" The field was made responsible. Promotions were tied to the results.

At Enterprise, cheating on or fudging the numbers will cost you your job. So the core learning here on NPS is primarily front-line, bottom-up oriented. Fred made the point that many people believe in NPS, but then turn it into a survey administered top-down and tied to bonus. NPS is intended to drive fast front-line changes that will improve customer experience; a measure that drives fast change.

Fred then presented the case for segmenting your business to focus on the strategic drivers of growth; accounts he calls "angels". Angels are accounts that are profitable and are promoters. Fred asked who in the audience knew their angels? I didn't see any hands.

Fred went on to talk about the Charles Schwab story of taking a -35 NPS in 2004 to a +23 in 2007. Success was a combination of a localized effort, training, and root cause analysis, etc.

Fred closed with a reiteration of linking the Golden Rule to NPS. It is simple in concept but there is a test to make sure you are applying NPS:

Are you categorizing promoters?
Is there a systematic process in place for reducing number of detractors?
Is there a process in place to identify and grow profitable promoters?
Is there leadership commitment?

Fred was asked what to do if you don't have close contact with your customers. He mentioned in response, that one way to remedy this is to build an online community for customers. He referenced his work with Intuit's Inner Circle customer community and Informative, which is now part of Satmetrix. He suggested this is a good way to get close to customers and to engage them in conversations that will drive improvements.

Fred reiterated this in a second question suggesting that a community is a good way to get customers talking, learn ways to make improvement even before rolling out a full-blown program.

Fred then responded to a question on NPS and employees (B2E). He believes we now need to look at how we can use NPS to transform employee management. He talked about how Bain ranked managers based on their NPS scores from their team members. The scores were published and the bottom half do not get promoted.

Throughout the session, Fred spoke to the battle between the Gorilla (financial accounting) and the Big Dog (loyalty scores with teeth). The issue is how to give power to the Golden Rule. Enterprise is a pioneer. All impactful implementations of NPS will drive cultural change that focuses on customer loyalty; The Big Dog.

Click here to download the presentation.

A Fresh Perspective: Q&A with Fred Reichheld - How NPS Has Shaken Up the Status Quo and Delivered Results

info@netpromoter.com — Sun, 04 May 2008 08:29:02 GMT

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.

Designing for Action

info@netpromoter.com — Sun, 04 May 2008 08:01:12 GMT

Normally, I pity the final speaker on the final day of any conference. What a tough job to keep the interest of an exhausted, data-overloaded crowd...unless, of course, it's the Net Promoter Conference and your name is Fred Reichheld! So instead, I felt sorry for the presenters in penultimate slots, well, except for my colleague, Deborah Eastman, Satmetrix's CMO. I have to confess to the fact that I believe she is one of the most engaging and inspirational presenters I have ever had the pleasure of introducing (and working with!). She often gets picked to present in the penultimate/final slot because she knows how to engage even a tired and flagging audience. And on Thursday, she did not disappoint!

Deb's focus was on ensuring that you design your programme in such a way that you can actually turn insight into action. As she said, if you can't take action on the customer feedback - why bother?

Peppered with real-life examples and anecdotes, she presented around six key points:

From Day 1, you must design your programme for action, using the NPS discipline to ensure that you are driving action across all areas of your organisation
Collect feedback from the voices (customers) that you value most
Ensure that you have the workflow process designed and in place so that your people can take immediate action
Make sure your people know who they are -- assign accountability for follow-up
Spend time to identify the root cause of the customers' issues and define your action around that
And last, but not least, CLOSE THE LOOP WITH YOUR CUSTOMERS! This will help to demonstrate that you are actively listening and will help you to build better relationships with more engaged customers.

There were no questions at the end of Deb's session: she'd covered the topic with great breadth and depth, with such colour from her own experiences, that the audience, quite simply, got it.

And to demonstrate that I am not the only "Promoter" of Deb's, as people left the room several audience members came over to personally thank Deb for a fantastic presentation and one even said: "out of every session I have attended across these two days, yours has given me the most hands on and useful data for developing my own programme. Thank you so much."

Told you! Deb Eastman does not disappoint!

Click here to download the presentation.

Measuring What Matters

info@netpromoter.com — Sun, 04 May 2008 07:48:42 GMT

Part of my role at the conference, as well as blogging, included introducing some of my Satmetrix colleagues who were presenting on the Programme Design track. This kicked off with Henry Jones, our UK Managing Director who was focusing on who, how and what you should measure in your NPS program.

Now, I'm not going to spend a lot of words in describing the presentation itself, but instead focus on some key points that came out in questions from the audience.

First of all was a question around response rates. Getting your customers to respond to a survey request is pretty key to gathering feedback! Short surveys, however, are not in themselves an automatic guarantee of a fantastic response. The question from the audience focused on the difference between Web and telephone response rates. Well, in my experience (3 years at Satmetrix and 15 in total in the customer management sphere), Web survey response rates can range from under 10% to over 90%. For telephone -- the response rates that we've been getting for a customer recently have hit as high as 80%.

But a word of caution -- before measuring response rates, you need to take strike rate into consideration. The response rate is usually worked out as the number of customers who agree to take the survey as a percentage of those customers who have been been successfully reached. What we've found is, dependent on the quality of data etc., is that the strike rate -- the number of customers you successfully reach -- can be as low as 15%. The real key to response rates is having true customer engagement.

Another question from the audience asked about correlations. Popular ways of understanding the areas which impact most on loyalty are linear correlations (based on Pearson's R) and regression analysis (dependencies of variables). The point is that if you are adopting the pure two question survey, you can't build correlations or use regression. You need to have asked specific scale questions about functional areas to be able to determine correlation/regression drivers. What you can do is use your verbatim comment analysis to determine the volume of comments to highlight what appear to be key issues for your customers. But be aware that volume analysis does not always throw up the same results as correlation. It may look, from the volume of comments, that issue A is the key area for action focus -- but correlation techniques may show that issue A is only the 3rd highest driver of NPS.

Finally, following the discussion of whether or not the 2-question approach or multiple-question approach is the right questionnaire to use, there was a query about multiple question surveys -- in that surely it dilutes the strength of of Fred's pure approach? NPS in it's purest form is the two questions: "How likely are you to recommend Company X to your friends and family?"; and "Why?". My take on this is that pure is great...but, a lot of my customers are based in the B2B world and they have very complex business relationships and deliver highly complex solutions and sometimes the two question approach does not give them the clear information and correlation data they need to build a successful, actionable program.

In those cases, we tend to use a mixed approach of short surveys about overall relationship and transactional surveys (also short) for key touch points. What we keep in mind is Fred's comment about being respectful of people's time -- and not asking them to answer a survey version of War and Peace.

Now there's a thought...War and Peace style surveys...how likely are you to recommend those?

Investing in Community and NPS to Drive Customer Loyalty

info@netpromoter.com — Sun, 04 May 2008 07:29:17 GMT

Kip Knight, Vice President of Marketing at eBay, spoke about Investing in Community and NPS to Drive Customer Loyalty. 248 million people are registered on eBay creating a worldwide online marketplace.

Over 1.3 million people make all or part of their living on eBay. eBay defines community as everyone who has a relationship with eBay including buyers, sellers, employees, and users of Skype to select a few examples. eBay sees community as a strategic differentiator. Members actively engaged with eBay have a higher NPS, sell more, buy more and in general are more valuable customers.

The eBay community as defined has both online and off-line components. eBay Live events are a significant part of the eBay community initiative. Online, eBay has a number of channels including The Chatter which is a blog that keeps eBay community members aware of what is going on. Also, the Voices Program is an ongoing group of 300 active members that are invited in four to six times a year to function as an advisory group to eBay management.

The first loyalty tool at eBay was the Feedback System which was a way for the community to monitor itself. While the system is widely used, eBay still felt NPS was needed and has made it part of eBay's DNA. In fact, NPS is the only forward looking metric eBay uses. NPS is measured top down via an ongoing sampling of buyers and sellers. Bottom up NPS is measured at the transactional level. eBay is able to tie NPS to other online behaviors. NPS is used as a "Red Alert" to reach out to at risk, high value buyers.

The NPS program was not launched until this year, 2008. Counted as an early win is the fact that senior executives are now reading customer verbatim statements. And internal NPS workshops are driving action. A key early learning from implementing the program is knowing what to centralize and what to delegate; centralize data gathering, delegate insights and evangelism. The learning process is ongoing.

eBay's online community is the company's biggest asset. NPS is a primary used vehicle for staying in touch with Community members. While there were challenges in implementing NPS at eBay, it was considered well worth the effort.

One question from the audience was: Have you been able to track the value of an eBay community member? Kip responded that eBay is putting measures in place to link NPS with behavior. From this they hope to build a Net Promoter economics model.

A second question was "Why did he recommend a company take its time implementing NPS?" Kip made the analogy to "test markets." It is important to learn first since it is hard to recover from a false start.

Click here to download the presentation.

The Promises You Keep: Making NPS Operational at Every Touch Point

info@netpromoter.com — Sun, 04 May 2008 02:22:00 GMT

Virgin Media launched their Net Promoter Program in 2007. Sean Risebrow, Director of Customer Experience at Virgin Media, is at the helm of the program, and he was at the conference to share their experiences and how they operationalised NPS the Virgin way. To date, they have collected 250,000 responses and are still actively collecting and taking actions driven by their customers' insights.

Who Is Virgin Media?
Virgin Media came into existence in 2007 as a result of a merger between Virgin Mobile, NTL and Telewest. Quadplay is the name of their game. To provide the context of the scale and complexity the program needed to achieve their goals and objectives, Sean asked the audience to think about the number of Virgin broadband customers that go through the sales process, installation, billing and how the cycle repeats when they move. Then think about the number of times these customers would call Virgin to talk about the problems that they are facing and finally think about the number of times customers would access their services throughout their relationship with Virgin. These figures rise at an exponential rate resulting in billions of customer interactions for the 14,000-strong organisation who is by far, the largest Virgin organisation in the world.

What Did They Measure and How?
Their goal was to develop a program that could continuously tune into the voice of the customer at an individual employee/customer level across the whole range of experiences. In-depth research has gone into helping Virgin Media identify the following significant customer journeys:

Join
Help
Change
Pay
Use

To address the different nature of these journeys, Virgin decided to run both operational and relationship surveys. There are 26 versions of the operational survey alone to measure the "Join", "Help" and "Change" journeys. The core essence of the survey was maintained throughout the versions with variations to capture the different types of events and the different lengths of the survey. These were the 3 core questions they asked in the short version of the operational survey:

Would you recommend us?
Why have you given us the score?
Are you willing to provide us with more information?

Logic was built by Satmetrix into the survey to allow the answers to the third question to trigger the closure of the survey or the extension of the survey to capture further information unique to each journey. The quantitative nature of the additional insights helped to provide robust statistical measures of the relationship between each journey's touchpoints and the recommend score. Together with customers' verbatims from the second core question, Virgin was able to identify the key drivers of recommend and was able to diagnose areas that needed further improvements.

The other type of survey developed was a Relationship survey to capture their customers "Pay" and "Use" journeys and these followed the same design principle as the Operational survey.

What Have They Learned about Measuring and Rolling Out NPS?

Tracking one meaningful number was the vehicle they used to focus the entire business around what matters most to their customers. NPS provides a single, simple measurement across the business that everybody understood, from the front lines to the CEO. Is it cost-effective? Yes it is. They spent 50% less to collect feedback but are getting more actionable insights for the investments made.
"You cannot mobilize the whole organization unless you create a company-wide view". He believed that this was best achieved using a big bang approach, rolling it out across the business versus a phased approach. In total, they took only 19 weeks to launch the project across the whole of Virgin Media.
Understand the significance of survey timings. Conscious of accurately capturing the true customer perception of the complete journey, Virgin looked at all their customer journeys and identified the appropriate events to trigger the survey to capture customers' perceptions of how well they kept their promises rather than the customers' perceptions of their initial promise. For example, if they asked the customer immediately after they have contacted Virgin to arrange for a "Move", they may not be accurately measuring the whole customer experience of moving house until the move has been completed.
There is zero value in just the score alone. In the first 12 weeks they refused to release their NPS to the business, as they wanted their employees to focus on engaging with the customers and not just following the score. "The competitive advantage comes from what you do with the data".

"It's the promises we keep and not the ones we make that drive customer advocacy."

Let Customers Tell You in Their Own Words What Matters to Them
There will always be a small number of key drivers. People can become so focused on data that they stop hearing the real voice of the customer. This goes to the very heart of what Net Promoter is all about.

Get the right things right
Customers' expectations are reasonable
Customer-facing groups and not central teams are the primary stakeholders of the Net Promoter data.
There are 1-3 things that customer truly value

"The key is not to feel overwhelmed by customer data and think of them not from your perspective but from a front-line perspective". They went to each touch point owner and selected 10 comments from detractors to get them to focus on customer feedback. All their action plans were focused on reducing detractors. When they first started the program, they had the same number of customers who gave them a score of 0 as customers who gave them scores of 10. Today they have reduced the number of customers who gave them 0s by 30% but have grown significantly the number of promoters.

Everyone needed to see the impact of his or her interactions and decisions on the customer experience. They recognised that every single transaction was important to their customers and it needed to be equally important to them. Driving the voice of the customer to the frontlines meant that results were disseminated across the organisation and even managers took to working frontline jobs some part of the time. "If they are not working for the customers, they better be working for someone else who is."

Unleashing the Power of their People

Focusing thousands of employees on what mattered most to their customers meant shifting the focus from the mechanics of measure, publish and pay, to focusing on winning hearts and minds. They now have a "10" wall where they post comments from customers who gave them a Recommend score of "10," to share their strengths across the organisation.

For Virgin Media, it was all about the right data in the right hands in the right way at the right time. Everyone needed to know what they were accountable for and they provided dashboards that were relevant to each individual to drive actions. They were fortunate that the Virgin staff wanted to proactively do the right things. For example, a team leader from Manchester who shared with her colleagues in other regions the actions she took based on the insights.

"It is impossible to win the loyalty of customers without first winning the loyalty of our people."

Success Takes Time
Without action, any loyalty program is a waste of time. Virgin made a conscious decision to avoid focusing purely on the ultimate value of their data. Instead they recognised that the true value of the program came from the improvements they made across the business.

Their customers judge them from end to end, so it was important for them to keep a clear focus on the single most important thing for the customer, and get that right. This is about deciding how they allocate their investments to tackle the number one issue that the customer raised. Their definition of a successful team isn't the team who addressed the broad customer issue and not raise the score, but the team who was focused on improving their key drivers' performances.

"Fixing broken processes and fixing customer issues build the platform for winning customer advocacy."

Improving Advocacy Is Not a Spectator Sport
All parts of the organisation needed to act and move in the same direction to improve their Net Promoter performance. For example, their Managing Director asked 25 directors to name 12 issues raised by customers. The first time they were asked, it took them 13 tries. The second time they tried the exercise, they were able to correctly identify the issues the first time. Key success factors were:

Keep it simple and easily understood by everyone.
Constantly reinforce the importance of staying close to the customers.
Create a cross-divisional group empowered to make the big decisions.
Let customers drive the focus of improvement efforts.
Embed into the organisation - successful customer experience management programs aim to embed skills and knowledge in their operations and not the centre.

When they started the program, they did not have a central division empowered to drive the vision. At the start, there were a lot of conflicts in how they measured customer loyalty. They were measuring it from their business process view but not the customer view. Now in Virgin, customer perception is all that matters and customer perception has become the driving force behind improvements to their operational processes.

Key Learnings

Develop early proof points. Their focus on first contact resolution resulted in less cancellations.
Create an early snapshot of the cost to the business and value to their customers by touch points.
Stop spending money on the things that customers do not value.
Market level scores are more interesting than they are actionable.
Connecting dots between operations, financial and loyalty data takes time.

No Excuses, the Secret of Success Is Not That Secret
So far, the Virgin Net Promoter program has been successful in being a catalyst for cultural change. It was a simple concept to understand and rally around, a continuous feedback mechanism where everyone from the front line to senior management could clearly see the impact of their interactions.

"We did this to benchmark ourselves against other organizations. We wanted to execute the program better than anyone else. This was our operational model:

Collect and distribute customer feedback.
Interpret the data.
Mobilize the organisation around what the customers told us in their own words.
Operational delivery: it was about consistently being the best at each touch-point that mattered.

Right data, right hands, right way and right time"

Click here to download the presentation.

Building Trusted Partnerships that Drive Word of Mouth

info@netpromoter.com — Sat, 03 May 2008 08:58:41 GMT

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.

Driving Customer Led Growth through SMART Executive Sponsorship

info@netpromoter.com — Sat, 03 May 2008 08:41:27 GMT

I really enjoyed hearing Jana Eggers, the CEO for Spreadshirt, share her thoughts and "lessons learned" about NPS. A lot of what she shared can be applied directly to other businesses considering NPS as a key part of how they listen and respond to their customers.

One of the first things I learned during Jana's presentation was about Spreadshirt, the company she's managing as CEO. Spreadshirt is an internet enabled company that's a worldwide leader for creative, personalized apparel. It was started by a grad student in 2002 in Germany and has since grown to over 250 employees.

Spreadshirt has a direct-to-consumer business (with 700,000 customers) as well as 500,000 "shop partners" who design and sell customized T-shirts online via using Spreadshirt's platform and production capabilities. They've also got some large corporate clients such as CNN (where you can order a current headline on a T-shirt or jersey...how cool is that?).

Spreadshirt's key users are consumers who simply want to express themselves in a wide variety of creative ways through words and graphs on various types of apparel. Unlike a lot of their competitors, there's no minimum order quantity and they're proud of the "value for money" they offer their customers. Another key selling feature is most Spreadshirt orders are shipped within 48 hours of being submitted.

Before coming to Spreadshirt as their CEO, Jana spent some time with Intuit where she became a big fan of NPS. Intuit was one of the "early adopters" of Net Promoter and continues to be one of its biggest advocates. Jana successfully used verbatims from NPS surveys when she was in charge of QuickBase at Intuit to help identify and implement quick wins in the business.

When she arrived at Spreadshirt last year, the good news was the company was already a consumer-centric culture. The challenge was it didn't have an overall guiding customer metric for the customer voice to be heard. They needed a way to talk and think about their customers and needed to break away from the tendency to say "if customer service hasn't heard about an issue, it's not an issue we care about".

Jana has used NPS to make sure Spreadshirt has an aligned way of listening and responding to their customers from all over the world. She implemented NPS across all the business units in 2007 and made sure NPS data was an integral part of everyone's SMART goals (i.e. specific, measurable, actionable, realistic and time bound).

Jana initially rolled out the NPS program in her core markets in three languages (German, English, French) with an email survey sent out to customers once a month. They have now included all their markets and do automatic email mailing after an order is placed or set-up.

They've also learned the wording of the invitation e-mail (such as subject heading) has a significant impact on the response rate to their NPS surveys. Based on this insight, they are continually experimenting with different e-mail subject headings and wording to improve their response rates.

Spreadshirt has developed some key early insights due to NPS which has led to a better understanding of their customers. For example, they've confirmed that Promoter re-order rates are 60% higher than that of Detractors. Additionally, customers who don't respond to their NPS surveys tend to have a similar NPS score as Detractors.

Having worked with NPS before at Intuit, Jana also appreciates that while the overall concept of NPS is simple to explain, it can be quite challenging to implement effectively across different markets. Another key lesson in implementing NPS she's applied at Spreadshirt is the critical need to balance short term vs. longer term issues.

For example, if you focus solely on long term issues, there's a danger of the organization giving up when they don't see progress in a relatively short time frame. If you focus solely on short term issues, you ignore the bigger strategic issues that are going to cause major problems in the future. The art and science of NPS is how to find the right mix of addressing both types of issues at the right time with the right team and resources.

Now that NPS data is coming in continuously from the various Spreadshirt markets, they've created an NPS dashboard that has all country data available for easy access. There's a "general assembly" for all employees held every month to review current business performance with only two PowerPoint slides (which should be a "gold standard" for any management meeting!). The first slide shows the number of shirts shipped the previous month and the second slide is an update on NPS data.

That's it...two slides....talk about focus! And it highlights the importance that NPS has at Spreadshirt to all employees on a regular basis.

A major point Jana made throughout her presentation is teaching all employees, especially new leaders, about the importance of NPS. Everyone in the organization should be familiar with your NPS scores and key drivers behind the scores.

It's important everyone in the organization understands you will get different NPS results due to cultural differences. For example, the US and UK scores tend to be higher than those from France and Germany. Additionally, smaller countries tend to have greater flux in their scores than larger countries.

That means there's a real risk of managers turning NPS scores to a contest to see "who's #1 and who's not". This belief would be a major detriment in making NPS a core part of how they manage the Spreadsheet business. To make sure this doesn't happen, Jana emphasizes that while everyone naturally likes to be #1, the important thing to remember is it's all about improvement in their NPS scores, not the absolute number.

So what's next for Spreadshirt and NPS? Jana outlined three key areas, including:

Understanding success factors that drive strong NPS scores
Continue to study country specifics (and what's needed to improve)
Benchmarking against other companies

That's it for this blog...now I'm going to think of a snappy NPS quote that I can put on a shirt and order on the Spreadshirt website!

Click here to download the presentation.

The Logical Choice: Generating Buy-In with Real-Word Data

info@netpromoter.com — Sat, 03 May 2008 07:04:30 GMT

Glenn Rogers, Director, Customer Experience, at Logitech presented a compelling business case based on his experience at Logitech on how NPS data can be used to prioritize and guide new product development as well as help transform a product focused culture into a consumer oriented one.

As background, Logitech is one of the leading providers of computer accessories (such as keyboards, mice, webcams, etc) in addition to a growing array of other popular consumer electronic products (such as Harmony, a no-brainer remote control that works with a wide variety of DVD players, TV's, etc).

I was surprised to learn just how complicated Logitech's business is, with 6 business units and over 100 new product launches every year. With such as large number of new product launches, quality isn't always consistent and there's the risk of alienating early adopters of a new product when quality isn't where it should be.

An additional challenge Logitech faces on a going basis (a challenge other consumer electronic companies face as well) is the relatively short "shelf life" of the product lines; the average Logitech product life cycle is only about 18 months! This requires constant innovation, which they've been quite successful in achieving over the past 25 years with an impressive 25% CAGR revenue growth.

As with many engineering driven companies, there is a strong focus on developing the next great product rather than starting with understanding what consumers really want (which is probably why none of us non-engineer types can ever figure out how to program our VCR's). Engineers intuitively want to know how to identify and fix "the bad stuff" (which is what Detractors are great at pointing out). Getting engineers to understand and appreciate what Promoters love about a product is a much harder concept to get across.

As a result of this challenge, Logitech has wisely chosen to go through a culture change while the business is good which will be heavily dependent on NPS as a "true North" guide to focusing on both Promoters and Detractors (and understanding what they both need).

Concurrent with this culture change initiative, Logitech re-organized the business in April 2007 with an EVP of Product as well as a CMO/SVP of Customer Experience (which includes marketing, customer support, customer experience and quality). The driving force behind these changes was a belief in "The Boomerang Principle"; i.e. the primary role of the business should be to focus on persuading current customers to return (i.e. creating promoters). This is a key principle many different types of businesses have confirmed is true; for example, 80% of Starbucks revenue comes from customers that come 18 times or more a month.

The re-org included the creation of a Customer Experience vision for Logitech, which is "a collective attitude that delivers on our Brand Promise by creating customer loyalty that leads to enthusiastic lifetime promoters who love and share Logitech experiences."

This long-term vision highlighted the need for two key priorities for the newly created Customer Experience team Glenn is creating:

Incorporating the "voice of the customer" into new product development
Integration of the customer experience into new product development process

Given these priorities, Glenn has been able to generate NPS scores for all of their product lines (which is very impressive given the large number of products) and is using this data to help improve product quality and processes. NPS is the key metric used to determine if Logitech is improving over time (and is a key input to the "Voice of the Customer" dashboard, which also includes returns to retail, customer support data and internet forum highlights).

Logitech's NPS journey started 18 months ago with few thousand responses using 5 point scale. This shifted in Q3 to an 11 point scale as well as the validation of NPS scores by product category and by product.

NPS data is collected via email and they are now generating 40,000 responses per quarter. Consumers are encouraged to go to www.logitech.com/ithink two weeks after a product is purchased. The NPS data is summarized on dashboards which are available to the business units and updated on a continuous basis.

Categorized verbatims were collected centrally last year (which took 5 full time people) but Glenn decided to get rid of this given the complexity of understanding verbatims from so many different product lines. The responsibility of analyzing verbatims is now with the respective business units who are expected to do regular "deep dives" on what's driving promoter and detractors. Glenn knows they still have lots of verbatims they're not doing enough with but is working on ways to gain additional insights from it in the future.

Understanding the economic value of NPS is also underway. Glenn is looking into ways to balance the short-term with long-term at Logitech. He's already determined the worst case with a Detractor is -$40 (product return plus negative WOM) using 20 year NPV plus negative WOM. He's still working on learning more about the upside potential that a Promoter has for the business.

He's also determined Promoters are almost twice as valuable as Passives in terms of long-term value and plans to use this knowledge to evaluate if additional investment in product is going to pay out (which would be a first for Logitech and a huge benefit to the consumer).

In 2009, Logitech will be expanding NPS to other regions and working to increase NPS response rates from non-software products (such as gaming, audio, keyboards), closing the loop via callback from customer service team and conducting quarterly "Voice of the Customer" workshops with each business unit to review the data and get the resources allocated accordingly.

In summary, Glenn outlined some key lessons Logitech has learned so far on its NPS journey:

You need a catalyst to get going (in this case, they decided to make this culture transformation while the business was still strong)
Top down support for NPS implementation is absolutely critical
It's a long term journey (i.e. minimum 5 year game plan)
NPS is a philosophy that involves significant culture change
You need a small group to "own" NPS
Data collection is much more complex than anticipated
Your customers will thank you for doing NPS since it will improve their experience with products they buy and use on a daily basis

I've heard a number of other companies that have implemented NPS echo these same valuable lessons. So for those of you considering NPS for your business, consider these principles to be key to your planning and strategy assumptions (or ignore them at your own peril).

Click here to download the presentation.

The Voice You Can't Ignore: Using NPS to Deepen the Conversation with Key Business Partners

info@netpromoter.com — Sat, 03 May 2008 06:50:21 GMT

How did an organization with a complex business arrangement that spans 4 continents, 18 countries and 110 business areas capture the voices of their key business partners? This is the story of HSBC's Net Promoter journey shared by Dr. Halina Miglus, Head of Customer Experience for HSBC Global Resourcing.

Program Objectives
Their goal was to have a deeper understanding on how they can build stronger relationships with their business partners, by identifying where they can provide the most value. The multi-faceted approach they adopted included identifying a common language, developing a centralized system and creating a framework to describe their relationships.

A common language was necessary to identify the key stakeholders. "Business Partners" were defined as individuals within the various HSBC business areas who have migrated business processes to HSBC global resourcing. "Customers" were defined as people who buy products and services from HSBC. This specificity was required to ensure that the insights gained were actionable at the right level.
The second area they focused on was determining and housing the population sample of stakeholders. Centralized systems were needed to detail the entire population of their business partner stakeholders.
Finally, a framework was developed to segment stakeholders by business entities, business areas and sites where the businesses have migrated to. They needed to form bridges not only to have a clear view of where they were but also to understand the businesses in greater depth.

In order to begin understanding the voice of business partners, they needed a program that would meet the following criteria:

Simple survey instrument
Fast turnaround time from survey launch to the time information was provided to stakeholders
Information that was actionable and would immediately drive relationship management and operational improvements.
Obtain honest, candid feedback from business partners  honest, specific input they can act on. (Incidently, one challenge they faced here was a cultural one, as South East Asian business practice norms dictated the need to "save face" as opposed to being upfront about their views.)
Provide management-at-a-glance reports
Have a simple metric and a streamlined method of measurement that helps the organisation to focus their efforts. (Net Promoter was chosen metric due to its simplicity and its relevance to their organisation.

About the Program
The first business partner survey was launched in May 2006 and ran for three weeks. They asked three questions in the survey:

Would you recommend?
Name three areas that we do well in.
Name three areas that we have not done well in.

It took less than 5 minutes to complete the survey and the initial response rates were fairly high, which was very encouraging and this grew as more people talked about the survey to their colleagues. She believed that their "less is more" survey approach encouraged higher than average participation levels (57% response rates resulting in a sample size of 612).

Dissemination of Results
The results were delivered in June 2006 at the HSBC Global Resourcing Management meeting. The negative scores got the attention of every single manager in the room that day. Finally they had a measurement that forced an objective, outside-in perspective of their business as opposed to the traditional defensive stance that they have adopted in the past.

To understand not just the score but the textures behind the score, they provided a visual output of the results that enabled every single business to have a reference to. An example was the slide used to depict individual scores for the Consumer Lending division. This was how they went a step further and provided another layer on top of the traditional Net Promoter Segmentation:

1,2 - Frozen detractors
3,4 - Cold detractors
5,6 - Warm detractors
7,8 - Passively satisfied
9,10 - Promoters

To provide that added texture to their insights, they recorded the verbatims and categorized them into areas that they have or have not done well in.

Dr. Miglus then went on to stress a critical factor that organisations should never ignore.. the "Human Factor". This is about recognizing that people with busy jobs needed time to wrap their heads around a concept no matter how simple it may seem.

They then adopted a two-pronged approach to cascade communications throughout the organisation. For the internal management team, the results were presented using simple but comprehensive visuals and intensive sessions were held to educate the senior management in the Net Promoter Program. For the business partners, the results briefings were led by the executive management and involving senior management. This was the turning point in the program. NPS became a conversation tool for the head of every business area represented in the survey and the results were discussed extensively.

Pilot Key Learnings
The initial results presentations and feedback from conversations with several business partners led to a reorganization of relationship management teams. The overriding theme was how they can best focus on unifying their efforts to improve the quality of their relationships with their business partners as opposed to the traditional siloed business unit approach. Elegant and streamlined communications played a significant part in increasing acceptance and adoption within the organisation.

They also wanted to take key learnings from the pilot and raised the bar for the survey in 2007. In addition to the previous requirements, further needs were identified and Satmetrix was chosen as the vendor to help them achieve the following goals:

Professionalize survey activities.
Benchmark capabilities. They had vast amounts of data but they wanted the capability to benchmark themselves across regions while taking into account cultural differences
Trending data. They wanted to keep data from their 2006 survey and as such future surveys needed to be fairly consistent with the original design.
Survey logic to obtain overall global resourcing scores as well as site-specific scores by regions.
Online access to results and a flexible on-demand tool for their senior management.

The Improved 2007 Program
The survey was launched at the end of November and continued through mid December 2007. They noted an overall positive increase with promoters outnumbering detractors and they were also able to provide additional benchmarking data across regions. From the pilot, they identified 6 areas of global resourcing performance that mattered to the business areas and for the new survey, they asked respondents to rate them on the following:

Part 1: Overall Ratings

Accuracy and attention to detail
Clear and concise communication (Balance between cultural differences)
Acting with the right level of urgency. (They have young staff whose average age was 25 and this has been an issue for them)
Ability to interpret and proactively address business needs
Exercising good judgment when handling exceptional cases

Part 2: Site Ratings

Part 3: Likelihood to respond to the survey in the future (80% said yes)

Program Outcomes
They upped the ante in ensuring that response rates remained consistently high and they achieved a 76% response rate, a 19% increase compared to the 2006 pilot. The results from the latest survey gave the business the ability to identify key areas where they needed to focus their improvement efforts on. They used a traffic light system to highlight key drivers of recommend by business areas within each business entity. This enabled them to shift the focus from just measuring their Net Promoter scores to how they can move the scores. The key drivers vary significantly by regions. For Asia Pacific, their key driver was "the ability to act with the right level of urgency" as opposed to North America whose key driver was "Exercising judgment for exceptions".

At the end of this exercise, they needed to understand the groupings and pull them together to drive continuous improvements across the business. As a result, relationship management teams are crystallizing their approach to working more effectively with business partners. However in some instances, the business needed to recognize and understand where it was impossible to move the dial no matter how much they tried. They have now adopted a more structured approach to how they manage the relationships with the business areas and it has become a dedicated endeavor with regular updates and discussions around key issues.

The online survey results software provided the necessary drill-down that they needed and it was accessible throughout all levels of the organisation. Continuous improvement actions are becoming part of the daily business conversations and interactions in HSBC. For example, how can they move business partners from one behavioural category to a higher level or what does it take to have more promoters. Ultimately they now understand the key drivers behind improving their services and have managed to take key learnings from each category and have applied it throughout the business.

Click here to download the presentation.

Word of Mouth: Show Me the Money!

info@netpromoter.com — Fri, 02 May 2008 02:35:09 GMT

Word of mouth is all about the money, the rest is just conversation (pun intended). That's the key takeout of this roundtable on Net Promoter and word of mouth; tell me how much a recommendation is worth, and then I'll think about doing something about it.

Part of the attraction of Net Promoter Score is its link to hard financials, but the NPS itself measures propensity to recommend (would recommend), not word of mouth (do recommend).

As it happens, recent European research has found that only 50% of promoters (would recommend) actually do recommend.

There are some really cool and effective tools for activating the 50% of ˜silent" promoters that the average business unit has (such as online communities), but before time and money is spent, it's important to know how much a recommendation is worth in financial terms (see The Ultimate Question by Fred Reichheld, Net Promoter Economics: The Impact of Word of Mouth white paper by Satmetrix, and How Valuable is Word of Mouth white paper published by Harvard Business Review for calculating Customer Referral Value).

Only then can a business case be put together for activating promoter advocacy.