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Net Promoter Community > European Conference Blog 2010 > Tags > satmetrix
 

European Conference Blog 2010

4 Posts tagged with the satmetrix tag

Deborah Eastman, Chief Marketing Officer at Satmetrix, led a discussion about different methods for motivating employees to drive customer-centric culture. The dilemma…should it be about pride or money? Deborah illustrated the importance of non-financial motivation in conversation with 3 guest speakers.

Life Financial Group: the “Wow Branch” Mentality

 

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Deb started by interviewing Irina Chichmeli of Life Financial, a network of Russian retail banks. They survey about 3000 customers per month, and the feedback goes directly to the branch manager who is empowered to take action at the branch and escalate requests to the central processing groups for systematic process changes. Life Financial never tried to tie NPS to bonuses for the branch managers. Instead, their focus was to educate the branch managers on how NPS linked to long-term financial results, and short-term measures at the branch such as new customer acquisition. Making this connection was all it took to get branch level buy-in.

Irina also explained the importance of employee recognition programmes. They award branches for overall performance, including NPS, and they give out “Wow Branch” awards. Each branch who gets this award is given money that they can use for anything from teambuilding to improvements at their branch to support customer experience. It’s critical to give the branch autonomy in deciding how to spend the money, which reinforces the empowerment they want to convey for branches to find ways of succeeding with their customers.

They also have a programme called the “Wow Differentiating” programme. This programme’s goal is to engage employees in finding ways to delight customers. This is different from solving customer problems. It is focused instead on anticipating customer needs and doing things to delight them. Irina gave several examples, including one branch that purchased complimentary passport covers to give out to customers when they had to submit passports for copying. This little extra was so popular with customers that they introduced the practice in other branches across the company.

Experian: Customer Context “is” the KPI

 

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Doreen Byrnes and Jock Busuttil of Experian described how they involve all parts of their organisation in the customer promise by using a common language and a common set of goals. Accomplishing this started with a broad internal communication programme, and it shows up in all aspects of the day-to-day decision making.

Jock described how his product management team uses customer feedback to put KPIs into context. The KPIs themselves are just an outcome. It’s the feedback from the customer that clarifies what is needed to really move the KPIs in the right direction.

Jock told a story of a product upgrade that put pressure on a particular customer relationship. Most customers had moved over to the new version and the company was planning to discontinue support. While the customer was contractually obliged to move, their account manager, Ben, knew that the customer was a Promoter and didn’t want to spoil the trusted relationship that had been built up over the years.

Jock and Ben visited the customer to come up with a plan for making the transition, and they made the decision to extend support for the customer in the interest of their long-term loyalty. This is one small example of how they have been able to maintain retention rates of more than 90%.

Verizon Business: “One Team” of more than 200,000!

 

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Paul Vincent of Verizon Business described how they drive a sense of pride across more than 200,000 employees who serve their corporate and government clients worldwide. How does such a large organisation go about creating a “wow” factor?

For Verizon, it all starts with 5 service excellence imperatives:

  1. Deliver service consistently worldwide

  2. Proactive, responsive, reliable support

  3. Best-in-class service management

  4. World-class customer enablement

  5. Customer-centric continuous improvement

What really struck me was the consistent approach to employee engagement that Paul described. They have a very deliberate strategy to have the same roles and organisational structure worldwide. Paul called this their “one team” approach, which allows them to deliver consistent service to customers who, like Verizon Business, operate globally. He then elaborated on a series of employee award programmes that form the foundation for motivating their “one team” of “teams” to deliver customer delight.

The results are impactful. They have seen a 23 point improvement in their Net Promoter Score and 27% increase in sales of strategic services.

 

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Acting on NPS feedback is only worthwhile if you get an eventual return  on your investment.  Naomi Kasolowsky, Senior Director of Business Consulting at Satmetrix EMEA, spoke to a full house, sharing her expertise on how to make NPS results actionable.

  1. Think about the program ROI before you even get started - create clear program objectives linked to business objectives.  Measure the actual situation to have a baseline metric to compare against.
  2. Create a hypothesis about what drives customer loyalty and measure against it. What makes customers really angry?  What makes customers really happy?
  3. Start by measuring what matters MOST. Don't measure everything!
    Prioritize improvement based on what really drives loyalty.  Invest in the right fixes, the ones that have the biggest impact for your customers and for your business.
  4. Link NPS to business metrics:  Customer retention, Revenue growth, Word of mouth, Customer repurchase, Customer lifetime value, Customer cross-sell, Cost efficiency.
    Include NPS in the top 5 metrics of your organization.  Organizations that do this tend to have employees who are more customer-oriented, and products and services that are a better fit with their customers' wants and needs.
  5. Merge NPS with your balanced scorecard – how does NPS contribute at each level? For example, it can be measured from behaviour at individual touchpionts to customer experience to brand loyalty to financial measures such as reduced churn.
  6. Differentiate between hygiene factors and delight factors.  Hygiene factors are things you have to get right to be in the game.  If the company fails on a hygiene factor, that can create a "penalty to loyalty". At first companies have to get the important hygiene factors right...stop angering customers.  Next, you need to start thinking about creating delight and getting a reward to loyalty. This is what gets 9s and 10s and turns your customers into loyal fans of your company.  You only need a certain score on hygiene factors to avoid penalties…doing even better does not translate to increased loyalty.  Focus on those items where delight highly correlates with increased loyalty.
  7. To identify hygiene vs delight factors, look into your verbatim comments.  What do promoters talk about?  Those are your delight factors.  What do detractors talk about?  Those are your hygiene factors.
    Think about al of this before the feedback starts coming in, not after!
  8. Analyze against your hypothesis, measure against your baseline metric to compare to to see if you improved.
  9. Don't stop there, keep measuring and improving as you go!

 

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Frank McCusker, Director Client Management for Satmetrix EMEA, set us straight on the basics of running a successful NPS program. If NPS isn’t built on a solid foundation, it usually doesn’t lead to the desired results.

 

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The first foundation is Program Design. 

  • Be clear about the results you want out of improving your customer loyalty. Typically, customer retention, more repurchases, and generating customer referrals. 
  • Be clear about the kinds of actions you are going to take to get those results – which are incremental operational improvements, and which are more radical strategic improvements.
  • What infrastructure do you need to support customer centricity?  Do you lack processes to align internal activities to customer value creation, or do your existing processes force people to focus inward and ignore the customer?  Do your ICT systems support the customer?  Processes and tools are only enablers, but having the right ones makes the overall goal of creating net promoters much easier.
  • Does your executive team fully understand and support NPS?  Is it fully integrated into your strategy and operations, across functions or is it a bolt-on activity that just sits in one department?  This seems like common sense, but it’s easy for organizations to compartmentalize NPS …and then they think it doesn’t work because no improvements happen in the organization and there is no change in customer perceptions, or the bottom line….
  • And finally you can worry about the questionnaire design.  Short and relevant, reflecting  the key pain points of your key stakeholders.   Typically questionnaires are designed by committee and they end up to be too long and redundant.  Here is the acid test for every question:  what action can you take internally based on the answers to that question?  If you’re not going to act on it, don’t ask it.  

 

The second foundation is Sample Strategy.
  • Get the right customers.  Don’t just go and ask finance or sales which are the right customers.  Dig everywhere and get a healthy sample from these segments:  end users, influencers, decision-makers. Again the acid test for whether a stakeholder or customer should be included in the sample:  Are you willing to make business decisions based on the data that comes from this group? 
  • B2C companies should take a representative sample of their targeted segments and extrapolate from there.
  • B2B companies, you need to measure every single one of your key clients who drive 80% of your sales and profitability….because each one matters.
  • Timing is also important – measuring at a logical time for the customer, but also at a time when you are prepared to quickly analyse the data, get back to customers and start acting on the data.

 

The third foundation is closing the loop.
  • You have to follow up with your customers.  Decide which situations require which kind of follow-up.
  • Who internally should conduct the follow-up?  Ideally, someone the customers believe has the power to make changes.
  • When will the follow-up be done?  (Best practice - within 48 hours if practical…whatever, stick to it and monitor it and make sure people do it).
  • What should happen afterward?  How should it be handled?  For example, will you include in your annual report a section about customer feedback and what you’re doing to address it?

 

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Richard tried to shake us from our corporate slumber by challenging us to exceed customer expectations in some unique way.

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Entire industries tend to do things a certain way out of inertia, and find it hard to break out of these standard operating procedures. Why is that? Is it feasible to build massive competitive advantage by doing things differently? Richard suggests that companies can’t create this "game changing" type of innovation from day-to-day executional improvements based on customer feedback. It's a broader strategy about transforming what customers expect in your industry.

As we are in London, Richard used a London Tube analogy…how can you “mind the gap” between what customers expect, and what they want. Most companies operate around the level of expectation. Very few successfully get to what customers want, and even fewer figure out how to exceed that high bar.

Richard illustrated this with some examples.

He started by describing several companies that had changed their industry by creating “great innovations” in customer experience to exceed not only what customers expect, but what they can envision on their own as “something I want.”

But I thought the most intriguing example he offered was that of RyanAir. RyanAir CEO Michael O’Leary is, on the one hand, the poster child for bad customer experience. Richard quoted one of his extreme statements about the airline’s cancellation policy:

“Say my Granny fell ill. What part of ‘no refund’ don’t you understand?”

Richard asked, “Is he really the villain of customer experience?” Expectations can be shifted not only upward based on innovations in service or product, but downward by lowering price.  Richard argued that RyanAir has been able to exceed expectations in a very unconventional way…by setting the expectations SO LOW based on rock bottom prices that customers are happy to get there safely and at a good value.

Then Richard turned to the UK banking industry. Most UK banks have negative Net Promoter Scores. It’s to the point where the government is discussing how they might legislate improved customer service. Has it really come to this? There are some notable exceptions, including First Direct, which has an NPS in the range of 40%, considerably higher than most other major UK banks. What is it that a company like First Direct can get right that is so difficult for much of this industry?

What’s the “industry standard” in your business? Richard gave these parting thoughts on how you might break away from the pack:

  1. Understand your existing “zone of tolerance” and develop ideas outside of it.
  2. Avoid Standard Operating Procedures that are based on industry practice, and instead focus on customer experience as a guide.
  3. Think like an entrepreneur trying to attack and remake your industry through experience innovation.

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