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Net Promoter Community > Miami Conference Blog 2008 > Authors > EmiliaB
 

Miami Conference Blog 2008

4 Posts authored by: EmiliaB

Dr. Laura Brooks, VP of Methodology and Consulting for Satmetrix, presented on the topic of customer value, highlighting the value of Word-of-Mouth (WOM) advertising and the importance of employee engagement to foster customer loyalty.

 

With the increasing amount of advertising messages in the marketplace, people often turn to their friends and colleagues for referrals. Dr. Brooks provided research findings that link customer loyalty to positive referrals for multiple industries. Unlocking the full potential value of WOM is yet to be realized in a variety of industries. Quantifying WOM includes studying the actual positive referrals of Promoters and negative referrals of Detractors. For example, Promoters may provide up to 9 positive referrals while Detractors may provide up to 5 negative referrals.

 

The concept of WOM has an interesting implication for employee engagement and loyalty. Positive word-of-mouth must also be propagated by employees of a given company — a negative message delivered by an employee may have an even greater impact than a Detractor. The challenge for management teams is to foster a culture where employees are driven to focus on customer needs and can take pride in their company's product and customer policies — another reason to consider Fred Reichheld's notion of bad profits.

 

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How do you grow at double the rate of your industry with a $0 Marketing spend? Diana Dykstra, CEO of the San Francisco Fire Credit Union, shared her story of driving growth through a focus on customer loyalty and employee engagement.

 

The underlying theme was a fundamental belief that "people are good" — front-line employees want to do the right thing and management's job is to empower them to delight the customer.  Ms. Dykstra talked about the measures implemented at the credit union that allow and reward employees for going above and beyond to address customer needs. It's this culture of customer-focus that has resulted in the impressive Word-of-Mouth results.

 

Another ingredient of success was an understanding of loyalty drivers — in this case convenience — and making investment decisions using NPS results. For example, instead of investing in branch offices at an estimated annual cost of $500K - $750K, the credit union decided to waive ATM fees no matter where the customer withdrew funds. The result was that customers received the "convenience" factor for a much reduced investment. Other examples include providing all customers pre-approved loans at any time, eliminating the traditional direct marketing campaign, i.e., junk mail, and eliminating bad profits — non-punitive fees.

 

This was a dynamic presentation and inspirational message about unleashing the creativity of the front-line and creating a working environment where customer delight is top priority — with impressive business results.

 

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Rob Markey, Partner and Head of Global Customer Strategy Practice with Bain & Company, spoke about using NPS to drive organizational learning at three levels:

 

  1. Executive or strategic
  2. Management or process
  3. Front-line employee

 

At the Executive or Strategic level, NPS results can be used for strategic segmentation to help pin-point a target market. Mapping customer segments by NPS and profitability, one can see which segments are profitable and loyal and which may warrant additional investment. The example was a top accounting and consultancy firm, which mapped clients on the NPS / Profitability grid and found that clients with complex business models were more loyal than simple businesses. This company used this data to focus resources on a more attractive target market.

 

At the Management or Process level, NPS results can be used to identify those touch-points along the customer corridor that have most impact on loyalty. Investments in these loyalty drivers can create a competitively differentiated experience. A frequently cited example is the "card-replacement" process for a credit card. This example also showcases the need for multiple functional areas to act in concert, ensuring the process is seamless for the customer.

 

The third is the Front-line Employee level. Here NPS results can be used to monitor and improve performance by reinforcing the feedback received through the NPS survey and the closed-loop follow-up process. NPS results at the granular level are a key coaching tool.

 

The overarching theme is that customer feedback can and should be used at multiple levels in an organization to improve performance -- at each level, employees can take action within their span of control.

 

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Peggy Kurusz and Mary Ellen Griffin of Ascension Health, the nation's largest Catholic nonprofit health system, discussed how NPS is used by their organization to focus attention on the patient experience. Specifically, the presentation described how St. Joseph Hospital, one of the top performing member hospitals, uses the Adaptive Design technique to drive process improvements.

 

 

The challenge - increase the time nurses spend with patients. Ascension Health found that on average, only 20 minutes of every hour were spent on patient care while the majority of time was consumed by administrative and teaching activities.

 

 

The Adaptive Design technique was modeled on Toyota's production line process improvement methodology. It is different from other approaches because it focuses on problem solving at the front-line. It involves watching a process, understanding triggers and interactions, and engaging the front-line to determine root cause and potential improvements.

 

 

As an example, Mary Ellen talked about the re-stocking process that was too complex for new employees, caused nurses to hunt for supplies, and generated inventory inefficiencies. Using Adaptive Design, the team eliminated inventory outages and reduced total time spent re-stocking by 50%.  Additional benefit -- increased nursing time for patients.

 

 

The key takeaway for me was the importance of really understanding the impact to patients and front-line workers of poor processes -- the concept of "humble learning" and engaging the front-line in problem-solving. Front-line employee engagement and linkage to customer loyalty is a theme that was prevalent in many of the Miami Net Promoter Conference presentations.

 

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