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.

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.

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.

Joanna Couture, Director, Sales Effectiveness UK&I & EMEA and Nic Seller, Client Loyalty Programme Manager UK&I & EMEA

Given Experian operate in 38 countries the odds are stacked that your own credit rating can be easily derived from their vast consumer and commercial databases. Experian have a clear vision "For our people, data and technology to become a necessary part of every major consumer economy around the world”. More importantly is the desire for clients to view Experian as the supplier of choice. Become raving fans beyond the level of Manchester United!

The loyalty challenge – Implement a client loyalty programme across many disparate businesses and overlapping client relationships. Cater for multi-cultural influences emerged as a critical success factor to ensure Net Promoter results are credible with the many internal geographic stakeholders.

Who gets surveyed? Decision makers, professional buyers through a full census on complex large accounts (80%+ of high value B2B accounts). Lower sample for simpler small accounts.

The survey is based on a typical client journey and uses a simple process. The Satmetrix platform enables results to be made available very quickly (closed on May 22 results available next week). Account loyalty is at the core and cultural validity is a fundamental requirement. Triggers (dissatisfied client survey responses) drive immediate action.

Key success criteria – Focus on cultural credibility – Deploy in multiple languages and enable clients to take the survey in their chosen language. E.g. a US national living in Spain can take the survey in English survey version.

Use cross cultural benchmarking – An independent Benchmark from Satmetrix provided a valid benchmark, representative of our markets. Benchmarking data from 26 large leading companies. B2B customer relationship surveys, international in scope.

Creating an integrated NPS strategy: Oliver White, Director, Customer & innovation, Aviva

Oliver proudly states this is his favourite mantra right now, having recently joined Aviva. The phrase is not a headline taken from “Farming weekly”. “You Don’t Fatten the Pig by Weighing it” refers to the ubiquitous cross border challenge of helping countries to go beyond the Net Promoter score and implement the Net Promoter disciplines that we know drive improvements to the Customer Experience.

So who is Aviva? – Many of you will have seen the “One Aviva” brand campaign recently in the run up to One Aviva go live on June 1^st. The heritage of multiple brands going back over 200 years have come together under the One Aviva brand. Aviva’s ambition is to be the most recommend brand or choice. Clearly NPS is the deal KPI to measure progress towards achieving that ambition and not only within the Insurance industry.

Operating in 28 markets and a diverse mix of distribution channels from direct sales to 91 bankassurance partner agreements brings its own cross border NPS challenges.

The journey so far - Back in 2005 the executive team took the leap of faith to link remuneration to a single balanced scorecard approach with a consistent customer measure and employee measure. NPS, was selected as the customer measure. Countries had the freedom in how they implemented their Net Promoter programme. Consequently not everyone implemented exactly the same NPS question, scale or methodology. In 2007 Group guidelines were created to bring greater consistency and NPS targets were put in place based on absolute scores. The phrase “herding” now springs to mind. In 2008 tighter guidelines were issued and NPS targets set “relative to an industry benchmark”. To support countries adopt best practices brought some consulting expertise to produce a “NPS blueprint” and made this available online to all parts of Aviva. This “Advocacy & Growth loyalty house” is being constantly added to. To assist country practitioners bring these key building blocks to life regular Webex sessions are held to showcase an internal best practice and support broader adoption across borders. The central team also invested in a global reporting platform to support all markets view and disseminate Net Promoter results and insight.

Some countries are further along the implementation journey than others. In Asia, India is a Net Promoter best practice market now into their 3rd year of rapid progress. In Europe Poland are strong believers in the Net Promoter discipline. Acting on Voice of Customer feedback they reduced the claims process from 30 days to 10 days with instant impact to the Customer Experience. UK Healthcare – have done a marvelous job of mapping the Customer Experience journey with the key moments of truth across the customer life-cycle.

In these markets the pig is clearly getting fatter and to Gloucester Old spot proportions!

You have to pity the presenter who gets the post-lunch spot, especially when the subject is the somewhat dry matter of process - rather than an exceptional case study or claim to NPS fame! But what James Young, EMEA Director of Consulting, outlined was that without the right approach and process all you'll get is "Infamy! Infamy! They all have it in for me!"

Interestingly, in the UK at least, there are reports appearing about an uplift in Service industry performance. Designing the service and support journey was the subject so this was a good place to start. In today's economic climate, the service provided to customers along their journey with you becomes a top driver of loyalty and is even more important where sales are in decline.

James outlined that you need to:

• Add value to the relationship through services
• Fulfil the promises you make
• Be aware that recession spending puts more focus on the service units of your organisation
• Engage your employees
• And, most importantly, be loyal to YOUR customers

To understand pain or pleasure points in the customer journey, you need to ensure that

• You design the right tools to solicit customer feedback
• You apply the right "diagnostics"
• You focus on turning insight into action, not navel-gazing analysis
• You drive a positive service culture

James did treat us to a couple of mini case studies, using Virgin and E.on to show the importance of mapping the journey correctly but mainly focused on the key requirements for gathering customer feedback, ascertain your drivers, understand your verbatims, apply your business knowledge and combine this to make a positive impact on the customer experience.

Get the process right, get the tools right, get the action focus right - you'll get the program right.

Definitely a dry subject, but fundamental to your success.