Guy Warren shared a fascinating story of the corporate turnaround at Misys and how Net Promoter fit in. He admitted they were up a creek without a paddle when he stepped in as the third executive of his business unit in 5 years. Their NPS was in the tank, and he had 5 written letters of complaint from CEOs in his first week on the job.

How did they approach this problem?

It was all about accepting change. As Darwin said, "It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change." And he pointed out that Misys had a good business, but it had not been responsive to change. Their strategy had been completely inside-out, and this filtered down to the way decisions were made.

So what did they do?

1. Values: They went to turn this on its head by focusing on the client. Thier strategy was "CLEAR"--following the acronym with these key values:

1. Client focus
2. Leadership
3. Excellence
4. Aspiration
5. Results

2. Incentives: "People are coin operated." If you tell people to improve customer experience but only compensate them on financial outcomes, they may well ignore it. So he has set out clear objectives for a 10% NPS improvement, independent of what happens with other key metrics. What does this do for them? It creates a window for people to make improvements in the customer experience, without having to base the entire case on financial data.

3. Customer Advisory Boards: They had been building banking software without direct input of banking users. That has changed completely. They now use multiple forums, including banks that are not even customers yet. This creates forums for the thought leaders in their industry to vet and influence their software development plans.

4. Goal Alignment: Guy showed a great chart that explained how executive metrics (including NPS), flow down to individual operating targets and goals within the business. For NPS, which represents 20% of executive bonus, the core underlying metrics they look toward to manage this are customer retention and employee loyalty.

They have taken the NPS from -44% to -11% in 2 years, versus an industry average of -2%. He admits that they still have a long way to go, but they are very proud of the massive improvements that have been made so far. And this has been reflected as well in their sales statistics. Their number of go-lives on new software implementations has skyrocketed, and they are now growing faster than the competition.

A lively and entertaining session, from Colin Shaw, CEO of Beyond Philosophy, kicking off with a 'spot the gorilla' film clip - the issue being we spend so much time obsessing over detail that we can miss the big things. That's when the silly things can creep in, in times like this, and before you know here you are..charging 'bad profits'!

He also told the story of the racing driver, who when interviewed, was asked 'when you saw the accident, did you slow down?' To which he replied, no i didn't, I knew everyone else would slow down so I speeded up!

He asked, what is the experience we are trying to deliver? Most companies don't know! We need to step back and recognise that customers are human beings, and driven by emotions, and are not transactions to be processed!

So, what are the emotions we are trying to evoke in our customers? Most customer experiences today are NOT deliberate or thought through, they are consequences of many decisions the organsation has taken, So, they can come about by accident. So, is our customer experience deliberate?

Colin told a story about something my own company, Aviva, did, in the General Insurance field, a couple of years ago. There are lots of subconscious signals that companies give to customers but if you ask them to articulate them, they may not be able to do so but which do have an impact on the customers. Like pens on chains in banks!

So, we need to find ways to surface the subconscious, In the case study, a car was crashed, and then Colin's team had to go through the whole claims process. Little things then started to happen..... the first question the contact centre asked was, what is your policy number, and of course they did not know, as he was not at home! When the recovery vehicle arrived, the customer was told, we have to take you home, but the customer said I would rather be taken 5 miles down the road to my office than 100 miles to my home, but told, no we can't do that, we need to take you home, thats what the policy says!

The point is, there is an emotional journey that customers go through as well as a 'process' or physical or rational thing.

We then switched to audience voting, based on how we felt during a story Colin told us about his airline experience at the airport, involving coaches to different airports, fighting for places on the coach, having to load own luggage into coach, being counted in "there are 31 of THEM", queuing, only to be told you are in the wrong queue.

So, a very entertaining presentation, that also illustrated to me the power of stories - I guess quite a few of us will remember Colin's terrible airport experience for some time, and who knows, even tell others about it!

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Federico Cesconi, Director of Business Intelligence, Cablecom, in Switzerland - very powerful presentation on how to follow up with detractors, and improve retention. This is a huge issue for almost all organisations these days.

In 2006 Cablecom 'met' NPS - one of the few companies that started not in measuring it, but in closing the loop, before being aware of the methodology - only later did he realise that it was the NPS he was calculating. They now use the NPS question to add accuracy in a Propensity to Churn data mining model. So, for example, they found that the key moment is around 9 months in the lifecycle, so he put in place a process to contact at 7 months to score NPS, and then callbacks were triggered depending on the scores. This proved to be very successful - in 52% of cases, the customer moved from detractor to passive or promoter - 23% directly to promoters.

Now they use NPS as a quarterly KPI, but when they started one of the first things they did was to sit down the top managers and give them 4 customer telephone numbers to ring up, ask the NPS question, and then start a dialogue with them.

He also stressed that if you use NPS as a KPI it has a huge cultural benefit, as all start to talk the same language, and now people who have never been interested in satisfaction are now asking for data!

It is now so embedded in the DNA, that external advertising uses real customers in posters showing what they like about Cablecom - very cool!

They collect around 40,000 feedbacks per month, and use text mining, But then, vitally important to take the holistic view of the whole customer experience, need to overcome problem of people listening to market research but doing nothing. And what about the 'proof points'? Their analysis tells that the Customer Lifertime Value of detractors is half the CLV of promoters

Federico's final message.........despite all the technology and systems, you cannot really claim to know your customers without truly listening to the voice of the customer

Do you know the film "Teachers Pet"? Starring Clark Gable and Doris Day? If yes, you'll get my drift immediately. If no, I guess I'd better explain that it's a film about a hard-bitten newspaperman, Jim Gannon, who despises journalism schools because he thinks that you only get the knowledge out there in the field. But he finds out that's not true. You can teach the rules of What, Who, When, How and Why upfront and that makes a person a better journalist. (I believe he also gets a few dates with Doris Day's character along the way too!)

Today, Frank McCusker, EMEA Director of Account Management, demonstrated that the rules behind journalism are startling similiar to those of measuring the customer experience in B2B.

Use the rules to focus on the right program match for your customer audience:

• WHAT...are you trying to achieve through the feedback gathering process? It should be insight that drives action, not data in a report that sits on a shelf in someone's office getting dusty.
• WHO...should you be surveying - 80/20 rule? Census vs. Sampling? Contact Matrix? and also WHO in your organisation is best placed to be champions for change? Ambassadors of the program?
• WHEN...get the timing right so it benefits you and your customers. Don't over survey, don't selection survey and don't vanity survey!
• HOW...design the right survey - and use the right media for contact
• WHY...which is where the customer communication comes in. Make sure that your customers know WHY you are running the program, WHY their feedback is important and WHY this ultimately benefits them.

Frank underlined that by learning this lesson up front and applying the approach to your business, you can also avoid some of the pitfalls of "learning on the job". I guess that makes the conference "NPS school" and we are the pupils. If we learn from the experts, our colleagues and contacts, we can help to develop better focused programs that deliver on the promise.

But don't expect a date with Doris..!

Great presentation from Suhail Khan, VP Customer Experience, Phillips International, focusing on promoters - a nice angle, as it is always to easy to just focus on detractors.

Over the last 5 months, Suhail did the 'world tour' and found that while the desire to do the right thing is there, the challenge is to really get this into 'how we do business round here' .

Don't forget that every dialogue you have with a customer is an opportunity to sell. It's not good enough to stop talking to people after you learn that they would promote you - if you can arm them with the right things at the right time, to spread the word, then that is even more powerful.

Need to create the same sense of urgency that there is around dealing with detractors, for dealing with  promoters  - they are just as important!

It is great to focus on the employees too - if you dont have a powerful promoter employee base, then it is harder to create customer advocates. But don't forget that if your delighted customers can recommend you to others who have not had a great experience, then it illustrates to that 'passive' person that you can get it right for others, and maybe they'll give you a second chance?

Phillips Include the promoter feedback in tenders for business now - very powerful! Suhail says that if you include a reference into a proposal, the likelihood of getting to the next round goes up 3%, but if that person is willing to speak on your behalf to others, it goes up 20%!  Imagine having a whole database of these people!

They have now formalized the process by creating a Reference Programme, a database of promoters willing to talk on Phillip's behalf, and also creates a knowledge base among staff, searching for promoters

Employees really need to be empowered to take action on your behalf, NPS is a behaviour - people need to be educated that all roles have a clear impact on customers, whatever their role. He has done lots of work to 'map' roles and what they do, and back to how it helps the customer.

Also, created internal network of champions, the face of Phillips, to spread the word, and delight internal employees to make it a great place to work. You need passionate people! The Face of Phillips is a great internal programme to create ambassadors, and spread the word, on customer and employee centricity. In a year, they had 300 ambassadors, who then started to host ambassador days, with customers in there too, hosted by regional CEOs, and then invited employees to come in and talk to the customers too - all maintained on company intranet, with access to all

On top management, he says, we want our executives to be promoters, but just approvers of budget! If they are your advocates, then it is so much more powerful, in Board and senior level discussions - it makes for less theoretical and more real and practical discussions.

Great stuff.

Fred admitted that he usually talks about profitable growth. But today, instead of discussing GROWTH, he discussed COSTS. That's what people are focused on today because of the economy.

How does loyalty save companies money? Here are just a few of the ways that Fred mentioned:

- Lower acquisition costs

- Fewer problems and complaints

- Longer tenure, which spreads fixed costs over a longer customer lifetime

- Lower risk of lawsuits

- Less need to spend on PR

- Employees get treated better, which reduces turnover

In my conference opening, I had pointed out that the hotel site sits adjacent to the London Wall, built in the 2nd century AD by the Romans. Fred pointed out that the concepts behind Net Promoter connect back to concepts from thousands of years before that...the idea that your reputation is the most valuable thing, as noted in Proverbs 22:1.

"A good name is more desirable than great riches. To be highly respected is better than having silver or gold."

As Fred put it, "How many people get turned into Promoters is essentially the same as Proverbs 22:1." And this connects directly to the economics of your business...including cost efficiency. As consumers we are looking for good value for the money...and that requires companies to be operating efficiently.

When you consider where to cut costs, look at the economics of detractors. They often are costing your company money. In one example he shared from work done by Bain & Company, it showed that detractors' lifetime costs can be 140% of lifetime revenues for the same group of customers.

What about employee costs?

Fred points out that in the accounting view of the world, employee salaries are a liability. So companies think of laying employees off when they need to cut costs. But it's not that simple. Employees are also the key source of value in your business. Keeping the right employees on board is just as critical as focusing on the right customers to drive efficiency and value in your business.

Fred discussed a new case study, from a company who spoke last year at our Net Promoter Conference, Travel Counsellors. This UK based travel agency, with work-from-home agents, has been defying gravity in a highly competitive industry by focusing its entire ecosystem on generating promoters. Top agents get consistently rewarded for generating promoters, and the top agent each year wins a new BMW!

As Fred told the story, I remembered my first phone discussion with the head of sales from Travel Counsellors (who I subsequently introduced to Fred). They told me the BMW story, and said that their NPS was in the 90%+ range. My first reaction was, "Are your agents gaming the system to win the car?" But as I talked to them more about the things they do to educate and motivate their agents to deliver exceptional customer experiences, I realized this was the real deal. And their revenue growth trajectory that Fred showed today proves the point. The company has grown steadily, and has gone from a startup 10-15 years ago to a business of over $280 million in 2009.

Fred also told the story of Apple Retail. By being creative with the experiences they offer in their retail stores (such as the Genius Bar), Apple has achieved annual sales per square foot of over $4000, compared to companies like Circuit City (which Richard Owen mentioned went bankrupt last fall), whose sales per square foot were closer to $550.

Fred's parting thought for the audience: You have 10 million minutes in your life. How will you measure your success? For your company, think about it as the number of Promoters you create, and your reputation will be your legacy.

So Richard Owen, Satmetrix CEO and co-author of “Answering the Ultimate Question” is boiling down six years of research and experience in implementing high-impact Net Promoter customer loyalty programs into 10 key insights. Sweet.

Of the 10 insights, noted below for your delight and delectation, #7 is the one that I'd like to comment on - Word of Mouth Trumps Advertising.

First, my take-outs from Richard’s wisdom in a nutshell

1. Winner Takes All – Your goal should be a Best-in-Class Net Promoter Score.  Why? NPS leaders grow faster and keep customers longer.  Compare Verizon with Sprint: Verizon NPS = 40%, growth = 13%, churn 1.1% - Sprint NPS = -15%, growth = -13%, churn = 2.4%
2. Inertia is the True Enemy – The biggest obstacle in growing your NPS to grow your business is internal resistance to change.  You need to cultivate internal momentum with top management sponsorship to make it happen
3. Relative Performance is All the Matters – Your NP Score is utterly meaningless – in isolation.  It’s your score relative to your (local) competitive set – and your past performance that makes Net Promoter meaningful
4. Pick Your Battles – Using Net Promoter to grow your business usually involves delivering a differentiated customer experience that underpins a key reason to recommend. Few brands can be great at everything, find your inner experiential strength and build on it.  (Amazon – logistics, Virgin – culture, First Direct – service)
5. Frontline Staff Are  Key– A key driver of successful customer experience redesign is where humans meet humans.  It’s difficult to overestimate the role of customer facing staff and partners in driving experience
6. It’s How Customers See You – 80% of senior managers believe their brands deliver a superior experience, 8% of their customers agree.  Customer Experience Management begins with the customer experience from the perspective of the customer.
7. Word of Mouth Trumps Advertising – ‘Happy Customers Talking’ is the best advertising and acquisition tool you can get.  Consider Amazon, Zappos, and Overstock – brands built on delivering *remarkable* experiences, not paying for ads.  Advertising is the last recourse for the mediocre.
8. Understand the Economics – it’s all about money, the rest is just conversation.  Unless you know the economic value of a Promoter and the cost of a Detractor to your business – and use it to build a solid business case your Net Promoter program is unlikely to get traction
9. Be Like Finance – It’s all about money, the rest is just conversation (2).  To succeed, make your Net Promoter program CFO friendly, with language, processes, and rigor of your finance department.  Excel not Powerpoint is your new best friend.
10. Don’t Confuse Simple with Easy – The goal of any Net Promoter program is simple – delivering customer delight.  But just because it’s simple to get, doesn’t mean its easy to deliver.  Consider the iPod and iPhone; years of development (perspiration as much as inspiration) underpin the elegance of simplicity.

So a useful 'reality checklist' for brands looking to walk the customer experience talk.  And as the guy known as “Buzzman” in consulting circles, you can guess it’s at #7 ‘Word of Mouth Trumps Advertising’ when I started cheering.

It’s true, it’s true – just about every research study shows that word of mouth is more powerful than advertising.  But the problem for brands is that you have to EARN word of mouth (by delivering a *remarkable* experience), you can’t buy it (word of mouth agencies notwithstanding).

But, and it’s a big but (and where I’d qualify Richard’s point) Word of Mouth trumps Advertising, but Advertising Activates Word of Mouth.  Our own research shows that up to 50% of promoters are mute promoters – and that advertising can activate them and the Word of Mouth potential of a brand (transforming promoters from “would recommend” to “do recommend”).  How? By helping promoters articulate the reason to recommend (think Sony Bravia ads and their creative focus on color).

The truth (as we see it) is that advertising and word of mouth are stronger together.