Net Promoter Community

You're pushing all the right buttons and your customers are more than likely to recommend you to their friends, family, colleagues and even their parish priest? But between being willing to recommend and actually doing so, there's a gap that is not easily bridged.

After all, the payoff for generating positive word-of-mouth and recommendations for your business can be big. Word-of-mouth is validated as the largest influencer in B2B and B2C buying decisions. A recommendation from a peer is the strongest medium money can buy.

But to move from "likeliness to recommend" to "active recommendations", every business needs to do more than delight its customers. It needs to be worth talking about. The harsh truth is that - as a customer - no matter how much I like you, I will only talk about you if it makes *my* conversations more interesting. If it increases *my* prestige of being "in the know". If it makes *my* friends laugh, or smarter, or happier.

Achieving this takes planning. But having been involved in two Management Centre Europe projects which among other things looked at this challenge, I have learned that it can be done. One was the redefinition of the Lexus Customer Experience. The other, the introduction of storytelling at Gemalto.

Here is what I learned:

STEP 1. Look at all those who can talk, not just the customer

In our drive to get customers to become promoters, it is easy to forget that there are others out there who can also speak well of our brand or business. They are the "influencers". The faceless group of people who say good or bad things about your brand, regardless wether they ever used it. But they are not to be disregarded. Some research even suggests that non-users may be more active promoters or detractors than actual customers. So when setting up programmes to identify and activate promoters, don't just stop at the customer. Include "everyone" who is exposed to your brand or business.

STEP 2. Dig for the emotion

To get people to talk about your brand or business they need to be passionate. And passion is an emotion. But people don't always tell you what they feel, even when asking all the right (NPS) questions. For example, in automotive, half of the women entering a showroom feel intimidated about the prospect of having to negotiate with a male. But unless specifically asked in the right way, hardly any of them will volunteer this information. Still, whithout that deeper, emotional, level, there will be no passion, and hence no real conversation. That is why you need to complement your NPS research efforts, with insight research that digs beneath the surface and uncovers the true emotional triggers.

STEP 3. Script a "talkworthy moment" at every step of the customer journey

Customer journeys shouldn't be "too scripted", but it does pay to include "remarkable moments" at every step the customer takes. This is not necessarily the proverbial "moment of truth" which helps your customer deepen their engagement with your business. Is a typically a small moment which is remarkable enough that people actually think it is worth talking about. For example, at Lexus UK they once had a woman's favourite doughnuts waiting for her, 3 years after she last visited the dealership. While no doughnut ever sold a car, in this case it did make a great piece of conversation.

STEP 4. Bring in the Storytellers

Sometimes people need a hand. Not everyone is equally gifted in telling passionate and relevant stories, even if they are about events that happened to them. Also, unique moments sometimes need amplification to be heard by more than the people involved. So once you have something remarkable happening, capture it. Bring in storytellers to structure it in a narrative that is easily retold. Create compilations which can be circulated through the business. Make your business' stories spreadable. Lexus once did this by compiling a Book of Legends. At Gemalto we did a global story hunt. And of course the classics like FedEx, Ritz or Nordström need no further mention.

STEP 5. Don't forget your staff

Finally, there are the people that work in your business. If you are a large corporation, their recommendation impact, and that of their friends and families, can be massive. Running the numbers in past projects I've been involved in, we have seen staff WoM affect upto a million individuals. The final step (or is it the first one?) is therefore be to make sure that the people who work for your company actively promote your business everywhere they go. Not because you tell them, but becaus they are willing, skilled and able to do so.

Andrei Litvinov - Senior Vice President, Life Financial Group & Irina Chichmeli - Head of Marketing, Life Financial Group

When Andrei Litvinov and Irina Chichmeli took the stage at the London Net Promoter Conference, they showed a new face of financial services emerging from a somewhat unexpected source – a rapidly growing group of regional banks in Russia.

Life Financial Group operates a network of over 230 branches in 58 regions of Russia, offering a wide range of consumer banking and business banking solutions under a variety of brands. Their motto is “Profitable growth, higher productivity, lower risk.” And the company is demonstrating how NPS fits hand-in-glove with this motto by building what they call a “loyalty-based business model.”

As conference delegates sat in the heart of London’s financial district hearing their story, I was tempted to grab some financiers off the street and bring them in for a dose of creative customer service. What Andrei and Irina described, in words and in photos, was a customer experience that was highly personalized, tailored to the local branch, and community-oriented…the antithesis of what you might expect in a typical banking experience.

But there is a method to the company’s creativity. By identifying loyal customers using NPS, they can link customer experience to key financial metrics, including faster top-line growth and lower risk. They have also developed an increasingly detailed understanding of how loyalty and NPS link to other key areas of experience such as “wow” service, employee loyalty and brand reputation.

Making the Link to Business Outcomes

Andrei Litvinov, senior vice president at the bank, explained their goal of differentiating through long-term relationships with customers. They aspire to be known for excellent service, not simply for product features or benefits. Their goal is to achieve an average customer lifetime of 20-25 years, and to build this competitive advantage today so they will be ahead of the market when economy rebounds.

Luckily, they have had a head start. Irina Chichmeli, head of marketing, explained how they experimented with a generic service strategy in the early days of their customer loyalty journey – but realized they would need something more specific to translate to their employees and branch leaders.

After measuring NPS for 3 years and working primarily with comments to drive improvements, they realized a stronger business case was needed to link customer attitudes (as measured by NPS) to economic measures of loyalty (such as customer account balances, profitability, and word of mouth). To accomplish this, they structured a pilot program with about 1,000 SME business clients in 6 branches.

Through the pilot they were able to observe some key business linkages:

• Promoters grew account balances by approximately 14% while Passives and Detractors had declining account balances.
• Promoters generated 25% more fee revenues than non-Promoters
• Positive word of mouth was nearly 3 times greater for Promoters vs. non-Promoters.

The Role of Branch Managers and Employees

The pilot also confirmed the extent to which branch operations influence the overall customer experience.

In fact, the likelihood of customers recommending the bank is only partially influenced by operations at the branch level. About 60% of the variation in their Net Promoter Scores was due to other structural factors such as interest rates and fees, the availability of credit, and perceptions of the bank’s overall financial stability—items that management controls at a strategic level.

But branch managers now understand their critical role in the remaining 40%. These operational factors can be controlled or influenced by the branch—things like the staff’s ability to resolve issues, the friendliness of employees, the branch atmosphere, and the experience while waiting in line. Pilot data also confirmed that timely and effective follow up with Detractors can effectively turn around customer attitudes.

What’s Next?

Armed with these insights into the business, NPS has become a key KPI for the company’s balanced scorecard. Their focus now is to roll out the program to all branches, capitalizing on the results and insights from the pilot. Now that they have begun to connect the dots between branch profitability, customer loyalty, employee loyalty, and service quality, branch managers are excited to take the program to the next level.

Frank McCusker's presentation addressed some fundamental questions about which customers to ask for feedback and when to do it in a B2B environment. Clients have often asked me if they should create a Net Promoter Score for each customer organisation. My answer has always been no for the reasons that Frank outlined. B2B products and services are usually purchased by a complex decision making unit - a mix of users of the purchase, influencers of the purchase and the economic buyer with the ultimate right of veto for the purchase. Each will have a different set of expectations and each will have their own experience. It's obviously vital to understand how each of these 'buyers' feels about the relationship. And therefore each will have their own NPS. Averaging these scores might be interesting but it won't really give you a true indication of the health of the relationship or the real likelihood to buy again. This is because the average will mask the score for the economic buyer and if this person is a detractor then you really need to know that and do something about it.

If you really want to use your 'relationship' survey to greatest advantage, you should, as Frank said, match the timing of the survey to the rhythm of the relationship. If you have an annual renewal for example, it makes sense to survey the customer in time for you to be able to rectify any problems or maximise any strengths before the renewal decision is taken. It is also essential that you have a relationship status check halfway through this annual cycle.  By adopting this approach you can really plan for success with every buyer in a single customer organisation.

Stefan Osthaus,  Vice President Worldwide Customer Support, Symantec

Stefan Osthaus presented a compelling story about NPS for product innovation that I wish all product engineers could hear. Perhaps Symantec has found a new breed of engineer that realizes customer driven innovation is a way to differentiate your company from others.

Stefan began the presentation painting the dire picture of the product – Norton Antivirus. The problem was the product had several severe issues.

In June 2006 Symantec found that their product in fact had very low loyalty scores. They also saw a direct connection between loyalty and the number of prizes they had won for their product. Their story was one of irate customers, 18% intallation rate failures, high call-ins to customer support and a product they knew they had to overhaul to make it something that customers would tell their friends about.

From 2006 to 2007 they began the journey to address installed program failure. For those of you in the software industry, you realize how many interconnecting parts there are to make software really work. At first, Symantec focused on the installed failure rate, but even with this focus it only dropped to 10% failure. More importantly they still had negative impact on support centers, and their NPS was also not improving dramatically. They realized, probably through much self-examination, that this meant they would have to rebuild the product and focus on multiple dimensions, not just installation.

Their turnaround approach is a lesson in cultural transformation for their product team. Like all good motivational goals, Symantec also articulated one for their engineers:

Internal rallying cry was--

1 by 10 by 100 . . . which means

Install in less than 1 minute

Boot time less than 10 seconds

Less than 100 MB

Interestingly, many leaders in the company (particularly in engineering) said it was an unrealistic expectation – Stefan noted that those employees not behind the initiative left the company. Stefan also proceeded to go through the 5 core innovation areas they tackled to bring the leading edge.

Needless to say, this is a happy ending in which Symantec was able to have a turnaround product story. Installed failure rate is now 0.5% and their NPS has gone up dramatically in the past 4 quarters.

Perhaps very important from a financial perspective, customer service inquiries have also gone down from 10 to 2 percent. In a dramatic shift for the company, they are now able to make tech support free of charge.

Interestingly, Stefan finished the presentation understanding that product and support are only 2 but 2 very critical touchpoints. They now need to focus on the total customer experience – the end-to-end journey. Their aspiration is to be like Apple or Google in terms of their customer attitude -- to achieve a dramatically different level of engagement with their customers.

While not disparaging the former two companies, I believe Symantec is well on its way to achieve that vision.

Lenna Mariana's session on Benchmarking your NPS performance raised a number of old chestnuts about 'The Score' and the need to understand the context of your market and your territory.

One of the counter-intuitive things about NPS for newbies is the concept that a negative score can be good. Negative always has to be bad - right?  Lenna's summary of the Satmetrix cross-cultural benchmarks in Europe really drove home three key messages for me:

1.     You need to understand your score in the context of your competitors. This is particulalry important as in some markets, the market average may be a negative NPS score BUT if you have an above average NPS score you can typically expect to out-perform competitors who do not. In fact the study by the London School of Economics identified some interesting trends here.

2.     You need to understand your score in the context of your territory. The European benchmarks covered by Lenna show some fascinating things. For example the average score in Western Europe is lower than the 25% in Southern Europe. So if you work for a multi-national that believes in league tables, the UK team could be best in class in the UK but seemingly failing against the score for Italy where the team may only be average against their competitors. Understanding this is vital to motivating a rewarding teams correctly.

3.     The verbatim responses from customers are usually more valuable than the number. If you haven't the benefit of benchmarks for your market sector and territory, it is worth remembering that the verbatim feedback from your customers about the reasons for your score will provide the insight you need to raise your game. The Net Promoter Score without this context could actually be an unhelpful guide if you don't understand the importance of cultural and market differences.

The Satmetrix benchmarks are well worth a look for organisations keen to understand where they stand against their competition.

Businesses just can't afford to have too many detractors, either among customers or within the employee base. As Neil put it, this is absolutely at the core of almost any consumer buisness he has seen over the years that is not performing optimally.

Virgin Media was formed out of the merger of 42 different cable franchises. But the big challenge was that the entire industry, which was consolidating, had a culture based almost solely on financial engineering. In 2006, when they first acquired Virgin Mobile, he realized that there was a steep effort ahead because of the expectations that come with operating under the Virgin brand.

So they started their NPS journey in 2007, to drive a quantum leap in their customer experience. Their cost structure was at least as good as any competitor, but the big challenge for their business model was tenure...they were not keeping customers long enough.

How have they done?

Have driven churn down from 1.8% per month, down to 1.1% per month...and 0.35% of that was from customers who moved house from being on the network to off. In terms of NPS, they have had a 33 point improvement in operational NPS, and nearly a 20 point increase in relationship NPS.

Neil sees a direct relationship from NPS to the number of customers you keep, and also to the cost structure. So they chose NPS as the metric to embed in their balanced scorecard. They started the journey with Satmetrix in 2007, and now they have moved to the point where they are measuring NPS at every touchpoint, and also have started to measure NPS by product.

Take action on what customers say

If you are going to bother to measure what the customers think, be sure you fix them. Virgin understands this, having collected over 600,000 customer responses...and they have taken action in many areas. For example, customers are very specific about getting it right the first time. They knew intuitively that first time resolution was important, but having the measurement helped drive the change into the company. The same applies for call centre performance, but in-house and outsourced.

Think of NPS as a culture change tool

Virgin has over 22,000 employees, and he commented that NPS serves as a key focus point to drive culture change. This includes all parts of their operation, as well as outsourced service providers. It's about embedding the thinking of the customer throughout the organisation.

What about compensation?

From Neil's perspective, if you believe in customer experience and have chosen NPS as the metric, then put it into the compensation scheme. Align the organisation to the metrics that are important to you. He pointed out that you may not need to take this all the way down to individual employee level, but it is important to him that all key managment players share this goal, so that they can drive the right behaviors within their teams.

NPS is just a tool

In closing, Neil reinforced the point that NPS is just a tool. Ultimately, it's up to you to lead the organisation and run your company.

1. Don't overthink the customer's feedback.

2. NPS is an operating discipline, it's not a research tool.

3. If you're not prepared to act, don't bother asking.

4. If you don't align the organisation to your operating model, then you won't get long-term success.

5. By focusing on fixing the issues of most significance to the customer, you will get bettter

My favorite quote from Neil:

"Just implementing NPS doesn't change how you are running the business."

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.

Every now and then someone tells me they have been disappointed with Net Promoter because it didn't really do anything for their organisation. In every case so far the reason has been that they have only asked the Ultimate Question as part of a brand tracking survey. They have captured a number but not the reasons behind it.

At best this is interesting but in reality probably useless in terms of the practical difference it will make to a business.

The verbatim feedback from customers brings NPS to life. But if it's positive change you're looking for then what you really need is Discipline - or the Net Promoter Discipline. One of the fundamental tenets of Net Promoter is that it measures the difference between expectations and experiences. And the average product or service delivery chain embraces a host of experiences or touchpoints. And every touchpoint represents an opportunity to delight or to disappoint. So in reality unless you understand how you perform at every important touchpoint you will never truly be able to drive a better customer experience. That's why I believe Net Promoter works best when it moves beyond a relationship metric to a become a business Discipline that drives the ability to exceed expectations at every touchpoint. One of the companies that is reaping the rewards of this approach is Virgin Media who not only collects at least 1000 pieces of customer feedback every day but passes it on to the employee who 'touched' the customer during the delivery of the service. That's really listening to customers. In my view you have to understand the customer journey and make every employee understand their vital role in delighting customers at every touchpoint on the journey if you want to build a busines based on loyal customers who become advocates.