We were lucky to have David Speakman, chairman of Travel Counsellors, with us today to share his humor and his thoughts on how to succeed through trusted relationships.

Before I summarize some of David’s key points, it’s worth highlighting that his team of independent work-from-home travel counsellors earn some of the highest Net Promoter Scores in the world at more than 90% (94% based on their most recent data post-travel). At this level of performance, they have the travel counsellors call up any customers with a score of 8 or below, and their standard for excellence is the perfect 10.

David’s entertaining speech gave us a glimpse of how they accomplish this.

The Business Concept for Travel Counsellors

A serial entrepreneur, David started his career as a grocer, opened a couple of restaurants (one a great success, one not), and started another travel agency, all before the concept for Travel Counsellors was born.

When he decided to get back into the travel agency business, he designed the business model for Travel Counsellors from scratch. He didn’t want a big staff or lots of overhead and phone bills, but he DID want to inspire people and he wanted people to be their own bosses.

Their unique formula creates that autonomy for their independent travel counsellors to be successful, by getting the core support they need from a central team in the UK that provides training, systems, processes, and the other key business needs.

The company has grown from a start-up to a network of more than 700 independent counsellors that generate more than £310 million of sales turnover.

Hiring for the Right Traits

An opening video told the story of one travel counsellor who recounted her sense of pride in serving her clients. As David put it, “You have to spend the time to get the right people into the business.”

They have found that the best travel consultants are team players, they want to belong, and they are family-oriented. They learned through trial and error that the right profile was not someone who wanted to start their own business, but instead someone who is passionate about service and making a personal connection with the customer. What Travel Counsellors did was to remove all of the hassles of running a small business, and handle this overhead so that counsellors could do what they like best: build relationships.

Relationships Are More than Service – It’s about Emotion

David describing his philosophy for creating emotional connections that go beyond “transactional service” to the heart of what makes for a trusted relationship with the customer. In the age of our technology economy, David pointed out some of his favorite quotes, including:

“Emotion is the one human ability that cannot be automated.”

“Companies need to understand that their products are less important than their stories.”

They analysed what really makes the difference between the most successful travel counsellors and the average ones. From this, they developed a list of 13 Golden Habits. They have made these Golden habits part of the management software that is provided to every work-from-home counsellor, reinforcing behaviours that help them build and sustain strong relationships. The company also compiles a book of stories about the good work of its counsellors to further reinforce the Golden Habits.

But it’s not just about culture. Their management software also embeds and tracks the value of referrals. For each travel counsellor they keep track not only of the number of referrals they get, but also who those referred customers are, and the value of travel bookings from referred customers over time. This helps them to truly understand the network effect of word-of-mouth recommendations and referrals for their bottom line and for the travel counsellor’s personal business.

How to Differentiate: “Don’t super-transact, super-relate!”

David illustrated the difference between transactional vs. relational models of interaction with these comparisons:

• Shopper vs. Customer
• Demands customer service vs. Looks to trust someone
• Short-term customer vs. Long-term customer
• Fear of not getting the lowest price vs. Fear of making the wrong choice
• Looks for price vs. Looks for expertise
• Does not value your service vs. Pays what you are worth
• Does not want a relationship vs. Wants a trusted friend

The bottom line: you want to create a relationship so that people trust you. “It’s not about the money” was David’s big message. If you do the right thing, then the money comes to you. If you get the relationship right, then you will get the money right.

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Marc Berendes, head of Enterprise Solutions at Abbott Diagnostics in Europe, explained their journey rolling out Net Promoter in a business-to-business setting.

Abbott has 72,000 employees worldwide, with a broad range of healthcare related products from diagnostic instruments to pharmaceuticals. The company started its Net Promoter programme in Germany and the UK and has expanded it to 36 countries within the diagnostic division during the last 2 years, and now is using it globally.

Marc explained the process for building internal confidence and buy-in around Net Promoter. Getting key executives to buy-in was the first step. “I know my customers,” was often the first reaction. But they were able to overcome this by illustrating the importance of using NPS to motivate change throughout the organization. Each country’s General Manager selected an NPS co-ordinator from their team, and a network across the division was built up over the course of 8 months.

Then it was time to get to work. They started with a pilot programme focused on the service experience, but they quickly expanded to get a more complete view of the overall customer experience. They also put in place a follow up process for Detractors that engaged front line managers and process leaders. The country co-ordinators also stepped forward to work on systematic improvement opportunities and present to country leadership teams on improvement actions.

Abbott Diagnostics also found that sharing success stories internally was a key motivator. They built momentum by communicating about small, relatively easy changes that made a meaningful impact on the customer’s experience. For example, they implemented a simple change to their packing materials to make it easier for the customer to open the package. Customers also said that the product shelf-life was too short. But on further investigation, they learned that the real issue was delivering the right amount on a more frequent basis to ensure that products would not expire before the need for use.

Communicating effectively with customers during times of change was another key learning. When Abbott Diagnostics undertook a sales force reorganization, the first unit to implement it saw a drop in NPS of nearly 30 points. As they followed up, they learned that the real issue was not the organizational changes per se. Those changes were sound and were the right business strategy. The missing piece of the puzzle was communication. Customers were not adequately informed of the changes, and in many cases they had developed trusted relationships with their account contact and were concerned about what might happen next. They took this learning from the first country and used it to implement the reorganization in a more proactive fashion in other markets, with successful results.

Christophe De Vusser, partner in Bain & Company’s Brussels office, kicked off the afternoon today with a fresh new angle on why delighting customers can delight investors too.

He gave us a view of how to use NPS to accelerate sales, in the context of private equity firms post-acquisition. The first half of his talk was a great introduction to the mindset of private-equity investors, and how NPS can fit as a strategic tool to build value based on operating fundamentals.

Christophe described the 3 main ways for private equity firms to make money from their investments.

1. Increasing leverage
2. Improving P to E multiples
3. Increasing earnings (either through top line growth, margin improvement, working capital management, or a combination of these)

For the past several years, while money was cheap, most private equity firms were making money using leverage and expansion of P to E multiples. But in the current environment, with debt being harder to come by and multiples being lower, this has focused investors instead back on the core business. Today, they need to demonstrate increased operating value based on the underlying business fundamentals.

This third strategy is not easy to accomplish, but it is now the critical driver for making a return on investments in private equity. Cutting costs is tempting, but this doesn’t typically give the level of returns that investors are looking for. The key, instead, is to demonstrate sustained relative market share growth, and to demonstrate that you have a repeatable growth model to sustain this.

NPS is an excellent tool to accomplish this according to Christophe. It usually starts by demonstrating how a change in NPS (by shifting more customers into the Promoter category), will link to underlying growth, share of wallet, and market share.

Christophe showed several examples of companies that have made this link between NPS and market share growth.  One example he gave was of a company that was losing market share relative to its main competitor each year. By implementing an NPS turnaround programme the trend shifted back in favor of the company. They did this by understanding the criticality of showroom design in driving NPS and sales volume. Based on this insight, they invested in re-vamping over 1000 showrooms around the country, allowing them to turn around market share growth relative to their main competitor.

NPS also helps companies decide where to invest internally to get the improvements. If a company wants to invest in sales acceleration, is the right answer to add sales people, to expand advertising, or to take a different approach? What will drive the fastest improvement in NPS and business outcomes?

Christophe showed a compelling analysis of “visit frequency” in a sales environment. They looked at how often sales people had visited each customer and found a very interesting relationship between frequency of visits and the customer’s NPS. Not surprisingly, the salespeople who did not visit got customer NPS values of -35% on average. At one visit this increased to 20% NPS, and with 4 visits the NPS increased further to 56%. Interestingly, when they reached 9 visits, the NPS dropped back to 38%. This insight helped them understand how much additional investment was needed in sales capacity, but also, how to balance frequency of visit and account loads across the sales team.

Knowing the drivers of NPS is key to accomplishing these turnarounds in performance. Private equity investors love this because it is about re-allocating spending within the company instead of having to make additional investments. Christophe stressed the importance of analyzing drivers, not in a vacuum, but relative to competitors.

How do these changes relate to investor returns? As Christophe explained, these fundamental trends in customer buying patterns and relative market position change the assumptions future owners will make when valuing the company. And there’s nothing like that to put a smile on an investor’s face.

Thank you, Christophe, for this fresh new angle on NPS economics.

All Belron does is replace broken glass on vehicles. And they do it more than 10 million times a year -once every 3 seconds. We heard from Gary Lubner, CEO of the world’s largest vehicle glass replacement company, about their Customer Delight Acceleration Programme and how NPS fits with that framework.

Belron operates in more than 30 countries worldwide, under well known national brands such as Carglass, AutoGlass, SafeLite, and many others. More than 25,000 employees, including thousands of front-line technicians, an on the go every day at the behest of consumers and their insurance companies.

Replacing a windscreen or a side window, or some other piece of glass on a car is not a simple matter. The company has to start by identifying the right piece of glass. Gary gave one example of a new Mercedes that has 84 different pieces of glass. And that’s just one brand, one particular car! Beyond that, they must get the technician to the right place to do the work, then accurately handle billing coordinating payments from the insurance company and the consumer.

How does Belron get this complicated service right time and again? By having a singular focus on doing this specific type of work, and by focusing on service excellence.

When Gary asked how many of us had had a windscreen replaced in the past 5 years, I was shocked by the number of hands that went up. It looked like more than 50 percent of the audience! Are we just an unlucky bunch? Not really. Gary next asked how many had had a replacement twice or three times. Only 3 hands remained up when he got to 3 purchases over a 5 year period.

Why does a company that knows you probably won’t need the service again for several years bother focusing so passionately on customer service excellence? Why not just drive the costs down??

• Most of their business is done in partnership with insurance companies. For the insurers, they are dealing with the policyholders thousands of times each day, not just once every several years.
• Secondly, customers talk. Having your glass break is stressful and unplanned, so people talk about the service, both when it’s great, and when it is poor. They share this with their friends and family, and that’s why Belron uses NPS as their measure of service outcomes.
• Their company values are also a critical reason. They want all of their employees to be committed to delivering great service time and again.
• But ultimately, they make this investment because it helps them make money and grow the business.

The company’s Customer Delight Acceleration Programme has 3 key parts: the NPS programme, their “Smile” programme which includes both training and recognition, and service recovery to effectively respond when things go wrong.

They chose NPS globally as their measure of customer delight after being introduced to it by one of their business units. Why NPS? Gary likes the fact that it’s a consistent measure globally, it is simple to understand for all of their employees, and it gives and accurate picture of the voice of the customer enabling deep insights for the business.

They contact 50,000 customers per week in 17 languages, and provide the feedback weekly to all of their teams worldwide, down to the level of the individual technician. If you go into any branch, you will see their NPS scores up on the walls. It has created a “buzz” within the company. By reviewing the verbatims, each technician knows exactly why they are doing well or not. The verbatim also allows both the front line technician and their managers to share feedback with the call centre or billing group if that was the source of their reaction.

Gary showed a video of employees form their Manchester region, describing how NPS has helped them be effective in their daily work. One employee commented on his learnings from speaking with the customers who score 7 or 8. While the customer may think the service is quite good, there are sometimes small things that they could do to get a 9 or a 10. This small additional insight is the difference between good and great service. And Belron has its employees focused on uncovering this higher level of service.

Belron reinforces this through employee recognition. They set up the Belron Exceptional Customer Service Award. To be nominated for it, you have to first win the top prize in your own country. He told the story of one winner, Grant Hunter, who is a technician in Christchurch in New Zealand. In his first 6 months with the company, they got 48 customer letters praising him, and he had an NPS score of 97%.

But no service can be perfect. That’s why they also focus on service recovery. How do they deal with Detractors when something has gone wrong? This is an area where they have transformed results in the past couple of years. Gary described a turnaround in their way of thinking about service recovery, and their NPS for customers who had a complaint. At the beginning, it was mostly about controlling costs and they had too many people involved in the process to make it customer friendly. They have completely turned this around. They now speak in a different way, they assume the customer is always right to create an environment of trust, and they have one owner to ensure this goes right. They have moved their NPS for customers who had a complaint from 19 to 67%.

Overall, Belron’s NPS across the more than 20 countries where they have implemented it is at 72%. They don’t compare country to country, but have a huge focus on improving and comparing operations within each country, which has allowed them to improve scores significantly over the last 2 years since they started using NPS.

The company’s service excellence strategy is paying off. In a market that is growing between 1% and 1.5% per year, Belron has achieved compound annual growth of 12%, reaching over 2.5 billion Euros in revenue in 2009. Gary attributes this gain in market share to the fact that they are able to delight their customers. With those results, I’d be delighted too!

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