European Conference Blog 2009

Lenovo: Happiness is Your Business Model

info@netpromoter.com — Fri, 19 Jun 2009 17:46:01 GMT

Sometimes the term Net Promoter can seem to get in the way of a really great idea - the idea that happiness is a business model; that the best way to grow your business is to make your customers smile.

Yes, smile. Forget for a moment arcane discussions about the metric itself or the corporate babble-speak around associated business processes. And look at Net Promoter for what it is; a business ethic that is based on the simple premise that doing business for good (delighting customers) is good for business (organic growth).

Take Chris Askew, from Lenovo who is up on stage now, talking about Lenovo’s Customer Delight Program that has substantially increased the number of smiling customers (NPS up 16%) all whilst trimming costs by 15%. Chris’ words could be those of the great philosopher John Stuart Mill, author of On Liberty, and who developed “the greatest happiness principle” - that when faced with a choice, we must first consider the likely consequences of potential actions and, from that, choose to do what we believe will generate most pleasure. This is the moral code that Lenovo follows - and as a result Lenovo is growing their business by making customers happy, and receiving some 39,000 gifts per month from happy Lenovo users. And it is also this moral code (utilitarianism if you want a label) of maximizing customer happiness that is at the heart of Net Promoter.

So, take the cue from Lenovo if you want a cocktail party version of what Net Promoter is all about - it’s about making happiness your business model.

You're likely to recommend, but will you?

info@netpromoter.com — Sat, 06 Jun 2009 00:45:37 GMT

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.

Would You Recommend You?

info@netpromoter.com — Fri, 05 Jun 2009 21:30:48 GMT

Anna-Marie Fielding, who is Head of Customer Experience and Business Intelligence at BUPA International, gave one of the most engaging and authentic presentations at the Net Promoter Conference (earning her three rounds of applause in the same session).

Only seven months into her business’ NPS journey, she provided us with an update on the lessons her organization had learned along the way, and the journey that was a head. For a full review of what she had to say, I refer to her presentation, which you can find at Net Promoter Case Study Library.

This goes into the ways in which BUPA discovered that focusing on “non-claimants” was at least as important as focusing on those that did bring in claims. Also transforming the process of pre-authorisation into a positive experience, had instant impact.

But for me, the most remarkable things in the presentation went beyond the insurance industry. According to Anna-Maria, 95% of companies collect customer feedback, but only 50% tell their staff about it (and in the end only 10% act).
To avoid this same mistake, BUPA has focused a large amount of attention on the people in the organization. These were encouraged to actively engage in the business and the Net Promoter programme. Feeding back customer information. Encouraging people to identify new ways in which they could “act better”.

And asking the – not so rethorical – question: Would you Recommend You?

Because it is only when the people in the organisation truly engage with the idea of customer centricity (beyond the NPS metric), that change can start to happen.

Life Financial Group: Building a Loyalty Based Business Model in Times of Crisis

info@netpromoter.com — Fri, 05 Jun 2009 21:30:28 GMT

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.

IBM: Extending Loyalty to a New Brand

info@netpromoter.com — Fri, 05 Jun 2009 20:30:40 GMT

Martyn Christian, Director, Demand Programs Marketing & Communications, IBM UK & Ireland

Martyn began the presentation focused on FileNet, a company acquired by IBM in which he ran the customer loyalty program. Some of the challenges faced by FileNet was that customers were becoming increasingly concentrated – meaning this was a business based 75% on renewals, sales teams were hunters, not farmers, and likewise their enterprise solutions did not have good brand image and packaging.

Martyn discussed the types of survey processes they followed, but more importantly he also focused on the commitment of executives that really drove the program. While in the beginning their goals were specific to increased revenue and profitability, the NP became a critical business metric as well, showing over approximately a 4 year timeframe an improvement from -6 to +20%. For those of you tracking your own NPS, you realize this shift is hard to do without a great deal of focus.

Martyn attributes this great success in which they created a community of positively focused customers as a key differentiator and most likely made them an attractive acquisition target for IBM.

All was not rosey, however, Martyn also depicted some of the trials and tributions – a few of these:

That people generally dissent at first
That you have to actively engage the organization, not just hope that it happens,
That you have to have a lot of patience.

While FileNet collected customer feedback through surveys, they also followed a multi-pronged strategy for customer experience improvement – including customer case studies, internal evangelism, creating a loyalty council, creating sales tools for distribution to prospects about their focus on the customer.

In addition, FileNet focused as well on making customer feedback part of the organizational scorecard, especially for organizations that did not seem as committed to the customer.

Some of the biggest wins, Martyn attributed to their program . . .

When you have high net promoters score and customers willing to talk for you, there are huge sideline benefits. They were able to significantly increase the number of customers who would speak on your behalf.
They tied compensation for everyone to the program.
In terms of funding, the CFO owns the budget (now this one was really innovative!!). Martyn wisely pointed out that having the CFO own budget meant that the budget was less likely to be cut and that the CFO looked carefully at ways that would enhance customer focused efforts that also had positive business impact.
Recognizing people internally for superior customer service

In transitioning from the FileNet story, Martyn spoke about IBM as a company that has acquired over 100 companies since 1995. Of course this can create dramatic confusion in terms of customer relationships. One of the first moves in understanding the FileNet customer experience vs. the IBM customer experience was to understand the core overlapping customers. They found that 75% of FileNet customers were not in a relationship with IBM.

One of their strategies, therefore, was to introduce educational marketing documents referred to as CALM (customer acquisition loyalty marketing.) With these documents, they could begin to communicate the values, expectations, etc. which opened the communication channels. As a result, those customers that overlapped had an increase in their positive perception of the combined companies by 200%, while the neutral perceptions decreased by 400%.

The latter half of the presentation was a story of how a company that was acquired tries to get out in front of customer communications. The end result is that active dialogue can in fact create positive perception. While some companies would use a wait and see strategy, clearly FileNet and IBM did not fall into this camp.

Matching the Rhythm of Your Relationships

info@netpromoter.com — Fri, 05 Jun 2009 20:30:38 GMT

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.

Matthias Lüfkens on Social Media at the World Economic Forum

info@netpromoter.com — Fri, 05 Jun 2009 18:45:57 GMT

Matthias Lüfkens of the World Economic Forum (aka. the people organizing the Davos summit) was kind enough to replace Nils Andres of the Brand Science Institute as a speaker in the track of “Getting Your Customers Talking”.

It made for an intriguing session on the opportunities offered by digital and social media, which in the end no company can ignore. For this, Matthias took the audience on a tour of the various initiatives undertaken by the World Economic Forum’s social media team (consisting of himself), imparting valuable nuggets of advice along the way.

The most important ones I retained from the session were:

Website visitors have become irrelevant

In the past, there was always a fascination by the number of people that “visited” a website, but today, this number has become much less relevant. People surf, mish, mash and compile their world view from a large variety of sources. If you want to be part of their reality, this means you have to place your brand where they are, and not expect them to come to you.

Store content everywhere

But a mere presence by “having an account of Facebook or Twitter” is not enough. You have to actively participate in these environments and store your content everywhere. As an example Matthias gave his decision to also publish most of the WEF photo library on Flickr, and even make it available under a Creative Commons License.

Be prepared to lose control

Getting out there means that good, but also bad things can happen to your brand, and the content you share. This is also the case for the W.E.F. where those opposing the Davos Summit, defame the event and its participants online. In the view of Matthias, this is however something to “live with”, and by countering it with lot’s of positive information, you can “drown out” most of the negative comments.

Create Communities

While you cannot control, you “can” influence. That is why as a final piece of advice, Matthias advised to actively reach out to online relationships and create special communities which received privileged information in return for an open dialogue (in this Davos created a special mini-community of journalists who receive information still under embargo.

For the rest Matthias shared some real gems online, of which my personal favourite was the effort by Queen Rania of Jordania, who actively reaches out to the country through her own blog and website. Also he showed examples of how the W.E.F. gave people on the internet the opportunity to directly ask questions to the speakers at the Davos event.

All in all, this was an inspiring session, which left many of those present with an appetite for more information and action in the areas of digital and social media.

Symantec: Product Development that Gets the Best of Both Worlds

info@netpromoter.com — Fri, 05 Jun 2009 18:45:24 GMT

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.

Orange Business Services: Building Strong and More Efficient Client Relationships, One Customer at a Time

info@netpromoter.com — Fri, 05 Jun 2009 17:45:29 GMT

Marc Anné, Vice President, Customer Insight & Advocacy, Orange Business Services

While some of you may now Orange as one of the 50 most recognized brands in the world, perhaps you didn’t know the breadth and depth of Orange Business Services (OBS).

Marc began the presentation highlighting the complexity of Orange Business Services (global telecommunication services) serving over 3750 multinational companies around the globe.

Starting in 2006, one of the benefits that OBS has was a CEO who was a great visionary, who also believed that outstanding customer experience should be central to everything they did. As well, Marc highlighted that they focused on other core cornerstones such as profitable growth, people development and competitive advantage.

One are that Marc noted that OBS performed extremely well at was its agility in times of change. He noted as a telecommunications company, change was something they expected which had made them an extremely flexible organization. This undoubtedly makes Orange a nimble organization for any time and place.

Marc then detailed their customer journey. When they started, he said they did not have a deep understanding of the customer experience. This was in part due to the mergers, which lost some of the “heart of the customer”. This phenomenon does not seem unique to OBS as organizations sometimes lose sight the customer at this very crucial time. In addition, due to the complexity of the relationships with the customers, there was a lack of understanding of who owned the customer relationship -- they had silos of ownership. He also noted that there was a lack of executive ownership at the time, and there were more spectators than doers. As well, there was little link between the customer data and core operations of the business.

So why change? One of the reasons was that they saw a clear difference in revenue growth between loyal vs. non loyal accounts so they realized that customer intimacy was critical to their growth strategy. So they launched a program called “Outstanding Customer Experience” as a transformational program for the business, not a quick fix.

Some of the core tenets of the program were that it helped them improve weak areas, yet also build on their strengths. In addition, it was a pragmatic prioritization – allowing them to focus their actions on areas that were customer priorities.

Marc also outlined two areas that the customer feedback was used for:

To focus at the individual customer level – addressing very specific customer issues – by business unit managers, end users etc. This focus was therefore at the account level. He noted that now more than ever in the recession, customers want reassurance and security. Therefore, it was very important to integrate the feedback into the account management rhythm and review process. In addition, OBS monitors this closed loop process very closely, making sure that the service improvement plans get the right people involved. Marc also mentioned the importance of understanding and measuring feedback from various account relationships – decision maker, end user etc – how important it was to get a “representative voice”. OBS also launched a series of initiatives around customer teaming – meaning how a global team can better serve the customer. They found by training employees on these skills, they were able to therefore have better focus on the customer, and hence improved loyalty compared to those teams that had not received this training.
A second area OBS is working on is improving overall end to end customer experience. In this area they are taking a broader view incorporating industry analysts, customer boards, as well as loyalty surveys. Through this focus they are making process improvements that will become part of the “natural life” of the company. By increasing efficiency, Marc emphasized that this allowed service managers more time to spend with the customer, which had an impact on customer intimacy.

Finally, Marc also showed some industry benchmarking noting that they are very good against the competition but are part of a “bad industry.” Therefore their comparison should be against ICT providers like IBM, HP, etc.

In summing up, Marc said that the key to an outstanding customer experience requires the following:

Long term vision
A structured approach
Operational buy-in and focus
Clear communication to employees to help mobilize them
A focus on continued improvement

In terms of key takeaways, I think OBS has been able to be very focused on their customer intimacy strategy, despite complicated B2B relationships, mergers, economic changes. The story is a great one for all B2B businesses.

Negative Isn't Necessarily Bad - In Fact it Could Be Best in Class

info@netpromoter.com — Fri, 05 Jun 2009 17:45:26 GMT

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.

Bain & Company: Powering Market Share Gains in a Downturn

info@netpromoter.com — Fri, 05 Jun 2009 16:45:33 GMT

Rob started off with a painful Bad Profits story about his experience with a car rental company. In addition to the refueling fee (on a car that was returned full!), he recounted the painful process they put him through to “try” to give feedback, and then to reclaim the charges.

Despite laughter in the room, you couldn’t help but marvel at the amount of time and effort that errors like this (combined with inflexible and bureaucratic processes) cause to customers. And all for a $25 fee.

Rob made the point that the $25 is like junk food: a way for companies to fill their hunger for cash in the short term, even though it can kill you in the long run. And this addiction is even more widespread when the economy contracts.

Loyalty Leaders avoid Bad Profits

Loyalty leaders find ways to avoid Bad Profits, and this gives them some long-term advantages.

They not only grow faster (2.2-2.6x faster), but they also have costs 15% below that of the competition.

One such company is Vanguard Group, a leading mutual fund company. 2008 was a terrible year for the mutual fund industry. The industry overall had net outflows of 225 billion in the US, while Vanguard had net in-flows of 71 billion.

How do they do this?

They give good value for all investors, but give even better value for their best customers, including those who are long-term investors. Because of this business model, they end up with a cost advantage that gives them stability in a downturn and helps them acquire new customers when others are scrambling for more “junk food” fees.

How many companies offer their long-term customers the best deals? Very often, the opposite is true…companies offer incentives to get new customers in the door, and often the tried and true customer gets a worse deal. Vanguard turns this idea on its head, which helps in down markets.

3 Common Traps to Avoid in a Downturn

When companies come under pressure economically, they need to be careful to avoid three common traps that can destroy long-term performance:

1. Chasing customers indiscriminately.

2. Cutting costs across the board, without regard to what is important for the best customers.

3. Cutting innovation budgets

On the last point of innovation, Rob pointed out that companies who innovate when others are distracted can get huge benefits as the economy rebounds. Two examples he offered were the iPod and the X Box, both new products that were launched in late 2001, in the middle of the high-tech meltdown.

How Do You Think of the “Design Target” Segment

Be picky, and choose the target customer segments you want to do business with and focus even more intensively on them when you are in a tight market. How do you try to identify these customers?

Your design target should have three key characteristics:

1. Has attractive economics

2. Loves what you can do best

3. Is representative of other attractive segments

Once you can clearly identify the design target, go about designing experiences to delight them. First of all, make sure you fix any problems that may be creating Detractors within this segment. Then, identify ways to delight them at the moments of truth that matter most, so you can create Promoters at every opportunity. Because most companies will find that they actually save money by creating more Promoters.

Virgin Media: Neil Berkett Puts Customers at the Heart of Things

info@netpromoter.com — Fri, 05 Jun 2009 16:00:20 GMT

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."

Why a 10 isn't perfection - its just a measure of surprise!

info@netpromoter.com — Fri, 05 Jun 2009 06:34:22 GMT

One of the things that comes back time and again at this year's Net Promoter Conference in London is the advice that the Net Promoter scale isn't an absolute measure of achievement but rather an encouragement to delight once more.

You see numbers are finite but experiences are not.

Clients sometimes ask 'what's next once you reach a 10?' After all 10 is perfection right?

Wrong? Virgin Media, ING, Philips, BUPA, Fiat - all say the same thing - a 10 on the NPS scale is just the recognition of delight - positive surprise if you like. In fact I would encourage everyone to see the NPS scale as a 'Surprisometer'.

So the challenge then become how you positively surprise next time. And that's the reality of Net Promoter. If you see it as just a metric then a 10 is job done - the Ultimate Answer to the Ultimate Question. But if you see it as a Discipline then 10 is just an the Ultimate Encouragement to delight next time and every time. And because you can't surprise with exactly the same experience a second time, then you need to find small ways to surprise once more. So use Net Promoter as your own Surprisometer and rise to the challenege of delighting customers on every occasion.

Misys: Using Customer Advocacy to Turn the Ship

info@netpromoter.com — Fri, 05 Jun 2009 01:45:10 GMT

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:

Client focus
Leadership
Excellence
Aspiration
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.

ING: Making it "Easier" and Getting Buy-In

info@netpromoter.com — Thu, 04 Jun 2009 23:49:24 GMT

Isabelle Conner, head of global marketing for ING, started by recounting the woes of the financial services sector. Customers' opinion of the entire industry was weak even before the financial crisis, and now the challenge is greater than ever.

How is ING planning to recover and stand above the crowd? She described her strategy for making the customer experience "Easier." ING's Easier strategy is all about building trust with customers. It has five pillars:

1. Easy to Contact

2. Fast and Efficient

3. Clear Overview

4. Transparent

5. Professional Advice

As she described it, these 5 pillars represent elements of both "service" and "trust" in the brand. The goal is create experiences that follow these 5 key elements, which come up time and again when customers describe the experience they want to get from ING.

Where are they on their Net Promoter journey?

ING has chosen NPS as the customer outcome measure for progress on the Easier strategy. INGs own consumer research shows that customers trust friends and family first for advice, followed by social networks and opinions of other consumers. Advertising comes at the end of the list. Based on this, it is clear that Word of Mouth based on real customer experience is the path to take, and NPS is a good fit for this.

Their initial push is to launch and tune the process in two key countries/markets. She selected the markets to include one key market in their insurance business, and one in banking. What the two have in common is strong leadership, who are ready and eager to make change happen. The goal of the pilot is to develop internal Promoters, to support the next phase of change throughout an organisation with over 100,000 employees around the world.

Her presentation led to a question from the audience about how to effectively drive adoption of change in highly concensus-driven companies. Isabelle came back to the question of leadership first. The CEOs of the two pilot countries have a reputation for successful change. She described them as "revolutionaries." Secondly, she added that it is important to invest time behind the scenes with leaders around the organisation. She has already run 47 workshops around the "Easier" strategy with management teams within ING globally. And her work has just begun.