The conference wrapped up with a "fireside" chat with Fred Reichheld, author of The Ultimate Question, with moderation by Dr. Ralph Oliva, Executive Director of the Institute for the Study of Business Markets at Penn State University. His passion for the importance of NPS as a key business metric is clear, and it's hard to argue with the facts. Fred offers some practical advise for those embarking on the NPS journey.
The focus on Net Promoter started because he saw a fundamental disconnect in the world. Business had come to the conclusion that loyalty was irrelevant, yet the best businesses were living up to the highest standard, the golden rule. He set on quest to prove that loyalty is driving market leadership.
"You can't grow business unless you treat people so they want to come back and bring their friends," Fred states several times during his discussion.
When asked what he found most surprising, he indicated that while he worked hard to simplify, he is surprised at how others have oversimplified. Organizations seem to be skipping the fact that NPS is a discipline, not a score. It's not a marketing thing, it's a people thing. People want to be treated in a specific way and when you want to grow, customers come first.
The other area Fred stressed is not to average NPS, which provided a nice link to Rob's segmentation discussion earlier today (see my notes to that talk). Specific customers drive profitable growth, and it's important you look at NPS based on your customer segmentation. Breakthrough innovations come from understanding the most valuable customers across the organization.
An area Fred stressed several times was the cross-functional nature of the NPS discipline. The most successful businesses that have embarked on NPS have not delegated to marketing or research, but kept it at a senior level and started with a few dozen of their most important customers. Senior executives have to drive the change across the organization and get involved directly in following up with customers.
When asked about NPS skeptics, Fred suggests that organizations start by looking at the facts in their own business. You have to know how much to invest for each type of customer.
If NPS is to be integrated into the key performance indicators of business success, we must engage the CFO. For those getting started, get your CFO aboard. Until the CFO is onboard you won't get too far. You need them to see that loyalty and the financial metrics work hand in glove.
For those that have existing satisfaction systems, Fred suggests that if it is working great, keep it and don't change it. However, he goes on to point out that 95% of businesses don't have the right system and putting in an NPS framework allows you to step it up to a strategic level and "re-brand" your process to engage your customers.
When asked about response rate targets, he has set the bar at 95%. Today's best in class companies are finding 60% or more on their relationship surveys and expect to see that increase. Intuit earlier shared their success of 95% response rates for their Personal Pro Response rates, demonstrating the success you can achieve when you build customer feedback into your products and processes. Closing the loop with the customer and demonstrating that you are listening is key to driving higher responses rates.
In an interesting moment, Fred asked himself a question of who has impressed him the most and turned him into a Promoter, clearly demonstrating his desire to show off his brand advocacy. Not surprisingly he noted Apple. After sharing his personal experiences he went on to explain that when Apple launched their stores they were designed not to sell more product, but to create Promoters. Clearly a strategy that is working for many as I'm currently typing this blog on my new MacBook Pro as a result of several Promoters that had shared their experiences with me!
For those of you starting on the NPS journey, Fred offers some practical advice. Get your senior leadership in a room and ask yourself:
- What is the true objective?
- What is wrong with the current process?
- Who is going to close the loop?
Get your customers involved in designing a program that will engage them and drive the right changes in your business to increase loyalty and drive growth.
And finally, when asked about his vision for the future, Fred sees NPS as a new metric system for measuring business success. He hopes to see more people across the enterprise engaged in using the NPS discipline and attending conferences such as this one. This level of adoption will likely lead to the need to audit scores. Once you tie to compensation, funny things will happen.
As the conference wraps up we all have a lot to take home and think about. Thank you to the Satmetrix team that created this opportunity to learn more about how to transform our business and truly adopt the NPS discipline.
Prior to NPS, we had a system that measured one thing, accounting. Business has shifted from the need to treat customers properly to the need to make my profits. While integrating NPS into core business metrics is a journey, we have made great strides in the past couple of years.
