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."