The challenge with any manufacturing organization is that the company is often one to many steps removed from the end customer.

And yet, the end customer experience is what really drives word of mouth growth.

Cummins, one of the the worlds largest engine and component manufacturers, has successfully cracked the nut.

Taking the lead from companies such as GE, Aggeko, and Atlas Copco, Cummins has gone from zero to 60 in just one year with their Net Promoter program.

Their success is fueled by 5 key elements:

1. Commitment to fit NPS into an existing Lens of the Customer Initiative

2. Driving adoption by driving business value to the distributors

3. Focusing less on the score and more on the actions that improve the score

4. Moving away from anecdotal evidence to correlation-based drivers

5. Developing global standards

Distributor engagement isn't easy. . . but the benefit to the field arm is great. Have you had success engaging your distributor organization .. . tell us how?

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Satmetrix' own, Deborah Eastman delivered a presentation that was chock-full of common sense and hard-won insight with the theme: "Increasing Retention & Repurchase through an Integrated Account Management Program".

Some highlights were:

• Account relationships are complex and traditional sales methodologies give a biased view of what's really going on in your accounts. You might want to read that again, it's not as simple as it sounds. Deborah gave the example of some sales folks saying, "I play golf with that guy all the time - he loves us!" Yet, when the NPS numbers come back, it shows an entirely different picture. The lesson here is grabbing a few brewskis and circling around the green with a key account does not a high NPS core make.
  
• Watch your language.  Deborah also hammered home that B2B account management programs should not be treated, viewed or referred to as research. An Integrated Account Management (IAM) program is not research - it's operational. They are also not surveys. Surveys are about you. Take note: if you start referring to your IAM or CX programs as surveys, so will everyone else. Refer to it as customer feedback...it might seem like a small nuance but people associate different things (and it's not always the association we want) with the word 'survey'. Stay mindful of this.
• A good benchmark for B2B response rates is at least 50% - settle for no less. And, lead with your response rates. It's a bit off-the-mark to boast an NPS score of 80% and only have a 3% response rate. Not only are you missing the picture, but you're missing the value having the complete picture provides to your organization.
• Don't forget your communication skills. Relay feedback to make sure you understood the feedback you're getting. It takes no time to pick up the phone and say, "Hey Bob, based on this last round of feedback, I understand X, Y and Z. Is that correct?" And, in fact, having conversations like this has led to more sales and repeat business. Relationships net you more diagnostic information and more information leads to better solutions.
  
• That said, don't be tempted to look at CX programs as just sales efforts - CX should affect the company structure.
• Keep in mind, too, that every person is not the same. Within one account, there are generally three types of people: decision-makers, influencers and end users. Be clear about what side of the fence you fall on with each group. End users may love your company, but if the decision makers don't, there's trouble in paradise. Look at how your NPS maps to each role.
  
• Closed loop should happen with everyone -- not just detractors. Take the time to close the loop with promoters and passives -- and even non-responders. There's value in getting to the bottom of the numbers with real, live conversations with people. Ask promoters exactly how they came to be a promoter and then don't be shy about asking for referrals. Remember, closed loop conversations can generate income!
• Link NPS to reference and referral programs. Marketing is usually looking for great case studies, PR is looking for customers/clients to talk to the media and sales is always looking for referrals - make sure these teams are cross-pollinating content.
• Don't forget to leverage your wins! Have a balance. There's nothing wrong with focusing on areas of improvement, but it's a bit demoralizing for your team if all you're doing is fixing or pointing out what's broken.
  
• When you can, map NPS goals to overall corporate goals. The idea being that the corporate goals already have energy and attention and NPS while having its own focus will benefit from the updraft.
• Don't relegate NPS to an annual cycle. NPS needs to be on a quarterly cycle right along with sales results and forecasts. Focusing on NPS annually makes it more of an 'exercise' than a way your organization does business.

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“The quicker you can drive Net Promoter data into the tools your sales people use every day, the more successful you’ll be,” advised Sandy Anderson, VP Sales Operations at Experian. Integrating customer feedback from Net Promoter surveys into regular processes has aided in engaging the sales organization at Experian.

Sales employees are able to see scores, open-ended comments – the good, the bad and everything in between. Sandy’s shared her motto “All feedback is good. It gives us the opportunity to make a change."

Once the surveys are complete, Experian shares the results broadly within the organization. Each area must create action plans based on their customers’ feedback.

They’ve even begun sharing these action plans with clients. Clients learn about the client loyalty program – what it is, why Experian is doing it, how they’re using the feedback.

They share the results with the client and don’t hold anything back good or bad. It sounds like a very candid conversation:

“Here’s the items you told us we’re failing on and here’s what we propose to do about it. Does this sound right?”

Now…I know these conversations can’t always be easy. But, I imagine that Experian is becoming a very trusted partner for these clients.

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Once a customer tells you he or she is a detractor, It's obviously important to understand why--and to find out in a reasonably efficient, cost effective way. How much of that information can be extracted from the open ended "why" answers customers provide on NPS surveys? It's a daunting challenge. Customers aren't always precise, or complete in their responses, for example.

Satmetrix Director of  Methodology Dr. Vince Nowinski provided some in-depth insights.  The Stanford PhD described how "comment intelligence analysis" methods allow you to make conceptual sense of such data, to see with greater specififity where problems are actually occuring and what the underlying issue may really be.

But users of NPS much be careful not to look at verbatim analyis as the end all.  Rather, my understanding is that it helps you formulate intelligent hypotheses about where the critical issues with detractors lie. Further analysis will typically be required, perhaps in the form of focus groups, follow on surveys to targeted groups, individual interviews etc before you actually get at root causes of the issues detractors have.

Think of it this way. Without verbatims, you could only guess as to what's bothering detractors.  With verbatims and the analytical tools described by Vince, you can formulate a very good set of hypotheses for further testing.

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Olivier Mourrieras – Customer Insight & Advocacy

Building a customer loyalty program is about business transformation. Building the right strategy, access to resources and obtaining buy-in from across the organization are just a few of the many challenges that most executives and program managers face when building out (or expanding) a customer loyalty program. This afternoon Olivier Mourrieras of Orange Business Services shared with us their journey to build stronger relationships within their strategic top accounts.

Orange Business Services is a leading global telecommunications provider. Orange employs over 30,000 within their B2B segment and service over 6,000,000 business customers. Over 90% of OBS’ annual revenues come from approximately 300 strategic accounts.

While Orange has had a customer loyalty program in place for 6 years, the first couple of years with the program were not without their challenges. Some of the initial challenges highlighted by Olivier included:

• No understanding or insight into the end-to-end customer lifecycle
• A fragmented and siloed business organization
• Fragmented and siloed approach
• Limited employee mobilization
• More “spectators” than “doers”
• Lack of executive sponsorship and leadership around the customer experience

Through Orange’s partnership with Satmetrix, they have embarked on a journey which has taken over four years to implement but has reaped considerable benefit to not only Orange customers, but to Orange’s bottom line. By using principles of the Net Promoter Operating Model (NPS model), Orange had developed a transformation program which consisted of the following themes:

1. Development of  a transformational program which has taken advantage of Orange’s global business strengths while improving upon weak areas that have had a negative impact on customer loyalty
2. Development of a customer centric approach based on a variety of satisfaction feedback surveys and other listening posts including customer loyalty boards and user groups.
3. Pragmatic prioritization which drives actions prioritized on root causes and loyalty drivers
4. The tying of customer loyalty results to variable compensation.  CLI accounts for 20% of all variable compensation!

In order to align the right level of support to spearhead these themes, Orange needed to obtain proper executive sponsorship.  With the proper positioning and diligence, the program team was successfully able to enlist the support of their CEO.  Having this level of advocacy has been critically instrumental in the adoption and growth of the Orange program.  Since Orange’s core program team consists of only 5 full time individuals, a “top-down” strategy was necessary to ensure success.

As the program has taken root and built critical mass, Orange has integrated the Net Promoter Operating model within their sales and account management organization through the development of the following key initiatives:

1. (One to One) - Development of an integrative closed loop process which includes individual customer service improvement plans to be established and reviewed periodically.  This process includes an initial internal review meeting, development of individual action plans and an account team meeting with the customer to review feedback results and agree to a documented action plan.

2. (One to Many) – Use of feedback in aggregate to analyze the varying needs across Orange’s broad base of customer segments.  Given the diversity across Orange’s business, this process mitigates from “one size fits most” approaches to improving customer experiences.  After all, not every customer or customer segment can be treated identically.

3. Development of a Customer Management Model (CMM) based on key components of the Net Promoter Operating Model.  This included the establishment of:

• A clear governance and communication structure
• Clearly defined and documented escalation paths along with effective coordination to manage the Orange/Client relationship
• To ensure trustworthy data and to mitigate against gaming, requiring the Customer’s validation of the survey sample.  This process required that all survey contacts must be validated by the most senior customer interface so that optimal penetration has occurred.

So now that Orange has spent 4+ years and considerable effort in rebuilding and strengthening their program, what’s the ROI?  The ultimate test was the development of a close linkage and positive correlation between sales pipeline and CLI trends within their top 200 strategic accounts. Through this study, Orange has identified  a 6-month lag between CLI and pipeline revenue growth. In one particular customer account the CMM process identified service management issues, dissatisfaction with delivery expectations and a lack of a strategic approach. This insight was instrumental in developing an action plan with the client which consisted of quarterly strategic reviews and more proactive expectations setting. CLI scores with this client improved from 6.5 to 8.5 in one year while pipeline revenues increase 300% in this same period.  From 1H09 to 2H09 Orange also saw 42% total revenue growth with this client. Now that’s putting money where your mouth is!

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Guy Cartwright – NEW/Asurion

Americans are more connected than ever. In the US today there are more than 296,000,000 mobile devices including cellular phones and smart phones. If you’re like most of us, your phone is a critical lifeline to your day to day existence; it’s a way of keeping in touch with family, friends, clients and co-workers.  Most of us would be lost without their devices!  That’s where Asurion comes in.

Asurion is the global leader in protection services for consumer electronics and Guy Cartwright is Asurion’s VP of Client Experience. Asurion was founded in the late 1980s and currently serves more than 170,000,000 clients across 5 countries. Asurion’s engagement model is unique as they are a B2B2C organization. Asurion contracts with major cell phone carriers (Verizon, AT&T and others), which sell Asurion’s insurance coverage services to the end customer. Customers pay a nominal monthly premium through the carrier on their phone bill and if their phone is lost, damaged or stolen the device will be replaced for a small deductible.

Guy noted that many customers have “love affairs” with their smartphones as these devices help drive an emotional need to connect with others and become more and more integral to our daily operations. This love affair with smartphones is getting very hot steamy as projections show that over 60% of all mobile devices by 2015 will be smartphones.  As more and more of us use and integrate smartphones into our daily lives, the potential risk for damage or loss becomes greater. As such, Asurion sees tremendous upside potential in their ability to scale.

Customer Experience is extremely important to Asurion so that they can retain their valued customers and grow their customer base as more individuals purchase additional devices for themselves or their family members. To ensure that Asurion is able to drive positive experiences within their client base, the decision was made to design and deploy a Net Promoter program.

The process in which Asurion deployed this program was described by Guy as “The How”.  Specific examples of operational and structural improvements made as a result of developing their NPS program was coined “The What”.

When developing Asurion’s program (“The How” ), it was imperative that Asurion understand the process and flow of each touchpoint that a customer may experience. This process of developing the “customer corridor” was integral in developing a survey instrument which would provide the organization with meaningful data which would be analyzed as drivers of customer loyalty and satisfaction. After developing this corridor, which consisted of processes within JOIN - Incident - Claim - Phone, Asurion launched their program and began to measure customer feedback to best understand which areas of the business could be optimized for efficiency and quality of service.

Asurion strongly believes that while “The How” is important, it is just as important to drive action from customer feedback and not just watch the NPS like a score of a football game. By moving Beyond The score, Asurion developed both structural and operational improvements within their business (“The What”) which has had a profound impact on customer loyalty.

Some of the improvements which have been made as a result of customer feedback include the development and launch of a unified claims management system, which allows Asurion customers to file a claim via phone, IVR or web and integrate this information so that a client can inquire on the status of their claim and replacement via any of the three mediums.  In other words, if I submit a claim over IVR, I may then check into the status of the claim by checking the web. This service reduces cost to serve a client while also providing greater flexibility and access to data from the customer’s perspective.

From a strategic perspective, Asurion has taken customer feedback to develop new products like whole-home protection plans which integrate mobile device coverage coverages for home telephony and Internet equipment, game consoles and TV & audio devices. This product segment looks to be quite promising for Asurion as more and more people rely on these devices to work, unwind and entertain.

Perhaps the most telling piece of data shared with us was that Asurion has utilized customer feedback to create a win-win-win for both their carrier and consumer clients. Among consumers who have had a documented mobile device incident over the past 12 months, the Carrier NPS of Non-Asurion customers is -13% while the Carrier NPS of Asurion customers is 6%. In other words, Asurion delivers value and increased loyalty to the carriers in which it serves.

As a consumer, do you have any stories of how a lost or damaged mobile device has impacted your life?  Please feel free to share any stories, questions or comments below.

Thanks!

Jeanne Bliss discussed “extreme” customer loyalty with three beloved companies that are featured in her new book, I Love You More Than My Dog. She opened by describing 5 key decisions that beloved companies make.

1. They decide to believe

2. They decide with clarity.

3. They decide to be real.

4. They decide to be there.

5. And they decide to say sorry.

I loved Jeanne’s discussion of how companies say “I’m sorry.” It’s not just about a hollow apology, as Jeanne said. It’s about “saying it with humility and repairing the emotional connection with the customer.”Jeanne mentioned that she did most of the research for her book before the economic crisis hit last year. So, before the book went to print, she went back to re-validate that all of the beloved companies were still prospering, since that was a core tenet of the book. What she learned was that, indeed, these companies did well through the economic downturn. If fact, they continued to grow.

Chris Zane, Zane’s Cycles

It was inspiring to hear from an entrepreneur like Chris today. He described how he teaches his employees to believe in the customer. As he said, “Our approach is to provide more service than what seems reasonable. What we’ve found is that most customers take only what they need, so he can offer it for everyone.” But it wasn’t just about believing. Chris had hard numbers too…he understood the lifetime value of his customers, and put his philosophy in the context of that. For example, he lets customers take bikes for a test ride, and they trust them. No complicated paperwork. Isn’t that risky? As Chris describes, he loses about 5 bikes a year, but sells more like 5,000. What’s the impact? They have grown 23% a year for 29 years. They have 45% margins (the industry average is 38%), and $15 million in sales from a single store.

Fred Taylor, Southwest Airlines

Next, Jeanne interviewed Fred Taylor, Jr. who manages Southwest’s proactive customer service team, which handles communications after disruptions in service. Fred described how he came to this unique role within Southwest. Colleen Barrett , back in 2001, was searching for someone to take on proactive communications, and she pulled Fred from the front lines to take on this role. Fred described the daily process…They start with a morning overview meeting, where they review a pipeline of information about service delivery across their entire system of operations. Then they have criteria to determine which customers need customized follow up communication. Each communication is unique, but they have three key things in common:

1. They acknowledge the situation

2. They apologize for the experience they have had

3. They make some gesture to help regain the customer’s trust

They want to reach the customer electronically or with a physical letter before the customer has to reach out to them to lodge a complaint. He read a blog post from a customer who received one of their communications. The customer summed it up in this way: “It’s important to be ready to respond when you are not perfect. Only then can you created devoted customers and loyal fans.”

Wayne Peacock, USAA

Wayne discussed Jeanne’s key decision called “Clarity of Purpose” and what this means for USAA. This is a company that is clear on its mission…and rightfully so. USAA is a membership organization, serving over 7 million members of the U.S. military, and they are legendary for their service, not just within the military community. Wayne shared the following quote from a 40-year member of USAA:

“USAA is the best relationship (next to my wife / she’s sitting next to me) I’ve had my entire life.”

Wayne described how they keep a relentless focus on their members by integrating the life of the military into their corporate culture. Executives and employees participate regularly in events with the military, to understand their lives. They also hire their customers…almost 1 in 5 of their employees has served in the military or had a spouse or family member who has served. This helps to reinforce what they do in new employee orientation, to extend this knowledge of military life to all employees both through training and through personal connections. By understanding what military life is all about, their employees are able to “respond with empathy.” What does this empathy and clarity of mission get for USAA?

• Over 97% of their customers stay with them each year. In their insurance business, their next best competitor is 9 points behind them on this core metric. In fact, 90% of military officers who have joined USAA have stayed with them for a lifetime.
• They also have received numerous awards for customer service from industry organizations. Net Promoter is no exception on this one…When we benchmarked NPS for different industries last year (2009), USAA had the highest scores across all of the industries studied.

Wayne ended by giving Jeanne a taste of what new employee orientation is like for USAA employees. The audience got a fun break by watching Jeanne get dressed up in infantry gear. She even had a chance to taste an MRE (Meal Ready to Eat), courtesy of USAA.

What’s Your Story?

Jeanne summarized by challenging all of the audience members to decide what their company’s story could be. As Jeanne put it, “Beloved companies have a story. If your customers can’t describe, consistently, what they get from you…then you have no story.”

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Rob Markey of Bain & Company hosted this compelling discussion of customer loyalty in the financial services sector, with three well-known companies that are actively using Net Promoter to get closer to customers and reposition for customer-led growth following the tumultuous events of the past 18 months.

Rob opened with a sobering description of the run-up to the late 2008 financial meltdown. I won’t recount the gory details, because I’m sure most of us remember it all too well. What I heard yesterday, which was new for me, was a view of the amazing pressure and challenges that was taking place within the industry.
With that “pressure cooker” context, Rob turned the discussion to the customer. What happened with customer relationships?

I have summarized below some of the key turning points and guiding principles that each of these leaders used to help their companies maintain a focus on the customer when it was perhaps the hardest environment for this.

Susan Sobbott, American Express OPEN

Susan described their step by step escalation of cost controls and credit availability, in reaction to the major shifts they were tracking in the market. Their base of customers had traditionally been very unlikely to default, but many of these customers who had a lot of assets (such as multiple homes) were suddenly in a very different credit position. So they were forced to take credit back from some of these customers.

The good news is that Amex was able to avoid cuts in customer-facing staff. They understood who their best customers were, and put a fence around them to protect them. In addition to their in-house models of creditworthiness, they also did a manual reviewed on every one of our their key customers to make sure they were being as fair as possible. We also were very protective of their rewards programs, since this is so central to their value proposition.

When it came to NPS, Susan described an interesting dilemma. Her organization had traditionally focused customer feedback and Net Promoter on the feedback of their most important target segments. But as the economy changed, more and more customers moved into the high credit risk categories, skewing their segmentation approach. Were these customers just temporarily out of their target? What they learned was that they needed to go back to this segment and understand how the relationship had changed when credit lines had to be reduced. They also improved the speed of their feedback loop…moving from quarterly to monthly surveys, which has increased the value of the feedback they are getting. They learned that these customers cared a lot about their relationship with the company, and that the customer wanted to protect that long-term relationship.

How could they work with their customers for the long-term? One interesting example Susan gave was in their outreach to help small businesses figure out how to grow in the difficult economic climate:

“We were lucky to have built a social network for small business prior to the downturn. So we were able to leverage that, since no one else was providing information for small businesses. We were able to step into that role as an information resource.”

Susan believes the actions they took to reduce risk, while painful at the time, have now put them in a better financial position to extend credit as the economy improves, especially for their best customers.

Isabelle Conner, ING

Isabelle described the far reaching nature of the recent financial events for her industry, and her company. For the first 18-and-a-half years of ING’s 20 year history they were growing and profitable. Then, almost overnight, they found themselves in a similar boat to many other financial institutions, struggling with massive changes in the market.

When it came to customer relationships, they made no changes across the board that would impact the customer negatively. Instead, they understood that as a highly decentralized organization, each unit had to make prudent decisions about extending credit. They had to balance their desire to support long-term customers with additional credit, and the financial reality of the market situation. As Isabelle put it, “Each business looked inward and had to figure out how to get through it.”

One thing that was consistent for her, throughout the financial crisis and still today, is the customer experience that they need to deliver. She summed it up nicely by saying that customers want it to be “easier” to do business. This theme of making ING easier than ever to interact with is at the core of their strategy, and their efforts with Net Promoter.

Now that the firm is looking toward the future, her main focus is on re-engaging their 120,000 employees across the business. Helping them to make “easier” part of their mindset and the way they behave every day. As Isabelle put it:

“For about a year we were in denial. But we are getting a lot of new engagement around what customers really want, which is for it to be easier to do business with us. Customers want transparency and they also want trust. And what we’ve learned is that by making things easy, you also build trust.”

John Marcante, Vanguard

John explained that, on one level, his firm was fortunate because they don’t hold investments. Therefore, the crisis caused less of a cash concern for Vanguard than for some other financial players. But there were huge challenges to manage when it came to customer loyalty and perception.

For example, when the market went down 45% in March 2009, they were faced with tons of people calling in with great concern. Their response was to invest a lot of time in increased customer outreach. The last thing they wanted was for people to overeact and make a bad short-term decision. As John put it, “If you weren’t being proactive about reaching out to customers, you were likely to lose them with portfolios moving in a negative direction.”

John explained how they experimented with one change that, ultimately, impacted customer relationships too much, and they had to reverse course. They had historically provided their most important high net worth clients with short-term coverage for check overdraws. As John explained, “we had never had someone who didn’t pay us back.” When they stopped this courtesy practice, it only took them 2 weeks to realize this was the wrong direction to go. “We saw it show up in the NPS, and realized it was an issue. The survey came back and people were saying, ‘Now that times are tight, you are running away.’” They understood quickly that they needed to stay focused on the long-term customer relationship.

Rob asked John what Vanguard is doing to position itself for success as things improve.

John described their aggressive approach to retaining customers, since it’s so much more effective to retain customers than to acquire new ones. Much of this is focused on coaching the front line on how to provide excellent service, no matter what the situation. He told an amazing story about a 2 hour call with a husband and wife couple, where the husband was getting ready to go in for brain surgery. Their goal was not to cut the call short. Instead, the entire team celebrated that call, because ultimately, it’s times like that when the way you act truly matters.

As John put it, their end goal is to activate their Promoters. “Ultimately, if we can help customers share their stories, we believe it will come back to us in good ways.”

Steven Nicks from Satmetrix helped us think of a successful program in terms of 5 key questions.

Q1 How does program design impact our ability to take action?
Foundation: organizational alignment, executive commitment
Infrastructure: technology and business process
Action: Operational and strategic improvements
Results: retention, repurchase and referral

There are traits that determine success:

-->NPS is used to drive operational changes
-->NPS is central to core strategy
-->The goal is to create promoters

You need to think how customers interact and the channels they interact through so you can design the right listening posts.

Q2 How does survey design impact your ability to take action?
Typical surveys start with questions...better approach is to start with dashboard design and all reporting needs. You should understand how your business is going to consume data.
Three things to keep in mind:

• know your stakeholders
• understand your segmentation
• let your dashboards be your guide (avoid group survey design).

Q3 How does sample strategy impact your ability to take action?

Key thing around sampling is representation. Make sure it maps to your business. You also don't want your sampling to impact your score. Trustworthy data are essential for executive support and actionability. The things that make data trustworthy are asking the right questions of the right customers at the right time.

The standard to judge data...are you willing to make decisions based on the data?

Q4 How does the closed loop process impact your ability to take action?
You need to design your closed loop process around a clear plan of action. Although 100% closed loop is ideal, that often is not feasible. You should look at:

• which customers do you want to follow up
• who does the follow up
• when it should occur (within 48 hours)
• what happens after follow up and
• how should follow up be handled.

Q5 How does technology impact your ability to take action?

Map out your program and use that map to figure out where you need technical support. Start with process design.

A general question that came up:

How do you get the right contacts?
- In B2C..billing and end user are same, so less of an issue. Sometimes need creative strategies to gather email.

- In B2B..use carrot and stick. Sales needs to be involved. As carrot, educate the organization to value the sales team by showing the info they can get. The stick is to show publicly the gaps in contacts in team meetings.

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Joyce Maroney, Senior Director, Customer Services Marketing, Kronos Incorporated, shared her insights and lessons learned as she took on the challenged of restarting their program and the business changes involved after  taking the company from public to private.  As part of the process the new investors took a branding study with the “Likelihood to Recommend” question included. The  result was that the NPS score was much lower than historical  NPS scores, forcing the company  to take a harder look at redefining their existing customer experience programs.

The major change evaluated was around how to measure NPS.  The company looked at moving away from their existing method of a 3rd party outbound phone survey  to more timely and accurate survey reporting.

While Kronos was sending alerts when customer responded with Detractor scores there was no closed looped process and the organization as a whole had little insight into the responses. Kronos adopted the “moment of truth” to help define their customer corridor. As Kronos defined the aspects for their new program they looked at a more automated format, internet based, with surveys going out quickly and feedback going to the people that need it. They define the process for trustworthy data which meant having triggers that moved transaction surveys daily and then they followed-up with an annual loyalty relationship surveys. The Satmetrix web based environment enables action to happen faster and the business rules send alerts to specific individuals in charge of taking action with their customers. Finally, to analyze win/loss deals they also call the sales people directly to gain greater insights into why deals are lost.

The company also focused on a new brand design which led to a 36pt improvement in NPS. So by improving their brand and visibility, the company has seen better customer loyalty.
What has been most important is to gain insight into the VOC and then define and assign the processes to make feedback actionable.

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Joyce Maroney from Kronos gave us some great insight on how to take over an existing customer satisfaction program and reinvent it so that it drives business action.

Kronos has over 3000 employees and operates in many customer segments in 60 countries. Its products help companies manage their workforce via software solutions. 626 of Fortune 1000 companies use Kronos.  In 2007 Kronos went private through private equity buyout. On revenue, it is currently a $700M company, with a goal to get to $1bn. After the buyout, they did a brand study and asked NPS question. The score was lower than expected, and prompted senior management to implement NPS score tracking as part of the Kronos customer satisfaction measurement program.

After some restructuring, Joyce took over the customer satisfaction program at Kronos in Jan 2009.
The old customer satisfaction program was based on phone surveys done by a third party based locally. But there was a 6-8 week lag between getting feedback and it getting to the business. They had tons of data in an unwieldy excel spreadsheet. Support used the reports to manage/comp agents, but there was limited closed loop feedback, and use of the verbatims. They had a mix of relationship and transactional surveys.

In order to restructure the program, they started with building the customer corridor for Kronos. They then did fishbone analysis on what the obstacles to referrals were. However, they were still struggling with how to prioritize the things to fix. They needed better insights...and decided a new survey architecture with automation was key.

Joyce started with the end in mind...there was an appetite to implement NPS, but no-one was suggesting a technology solution. It was key to start with trustworthy data and actionable data.
Joyce did a lot of research...talked to vendors, peers, etc. Then got executive support, even though it was more money than the company was used to spending. That was a big win given the tough economic climate.

Joyce created a a compelling "Future State" slide.

Aisling viewpoint-->This is a really great tool for everyone to consider using in their program.

Kronos is in the middle of implementation right now. The web-based delivery platform will enable true "action alerts"...ie closed loop in a timely fashion and to the right people internally.
Another goal is to harness and cultivate the promoters that may not fall into the current reference programs.

To get the program going, Joyce did an inventory of the survey goals. Then they had 12 vendors in an RFP. It is really critical to do a solid RFP and involve key stakeholders. They narrowed the potentials from 12 to 4, then to 2. It was a very long process, but worth spending the time. They selected Satmetrix in August 2009 due to their mix of technology and consulting.

• Key takeaways
  NPS is only one element of understanding the customer
• In measurement, need competitive surveys, relationship and transactional surveys, and qtrly/monthly reviews.
• Win/loss--sales perspective, customer perspective, quantitative analysis, market survey
• Knowledge and promotion--case studies, stories, social media, customer communities and on-site visits.
• Social media monitoring is key.
• Graphical, easy to digest reports are the goal.
• You need executive support, cross functional participation, communication, training, infrastructure support from IT.

Joyce used an old joke to make her point...with a fried egg and bacon breakfast, the chicken is involved, the pig is committed.. The program team has to be committed. Her key messages were:

• Start with the end in mind--visualize dashboards
• Insight is the goal--data is a means to an end
• Don't assume, ask--leverage best practices
• Drive your project--demand guidance but own the results.

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OK, I've never used that phrase in any context, but I'm in New York, and it just feels right! In any case, Beyond Philosophy's Colin Shaw followed Julia Gomez' presentation with a compelling one of his own showing how customer emotions can drive as well as destroy value.

There's an old saying from sales that logic makes prospects think, but emotion makes them buy. Colin showed how firms can understand how they are impacting their customer's emotions, which emotions drive value and which ones destroy it, and how to change the emotional dynamic with your customers. This is powerful stuff. Whether your business is selling obviously emotional experiences like entertainment or vacation travel--or the most mundane B2B widgets, a critical part of your relationship with customers is emotional, involving such factors as trust, a sense of being valued, a sense of being cared for, safety in dealing with you, and the like. We know these things are important intuitively, as human beings. Colin showed how to sort through and leverage such factors in a practical way.

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I chaired this afternoon Advanced Track: following are some of the highlights from my perspective. If you were there, please chime in!

JetBlue's Julie Gomez kicked things off by showing how her team applies NPS methodolgy to employees to keep abreast of their tendency to promote working for the firm, under the theory of course that happy employees make for promoter customers. Julia is -a former Morgan Stanley analyst with hefty research credentials, and showed not only how the firm made substantial improvements to its "employee NPS" during a period when morale had been low, but also how these increases tie to ultiimate business results, including revenue growth and shareholder value.

Some key findings:

• Emotional dimmensions had the higgest corrleations to whether someone is a promoter or detractor.
• Small improvements in leadership result in large improvements in crewmember NPS scores.
• Employees respond very well to being able to volunteer their time for worthy causes on behalf of the company, apropros of the importance of the emotional dimension.

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Michael Mendillo and Roger Thompson from FirstService Residential Management gave a great overview of the NPS program there from two perspectives--executive sponsor and program owner.

FirstService is the No 1 in property services company in North America. Approximately 85% of their business comes from long-term contracts, therefore, relationships are key. They service a million homes, up to 3 million people. Cross-sell across all divisions is critical to growth. They have different customers...developers, building owners and homeowner associations. Michael described the clientele as "tough", with every day being a street fight.Their service delivery is complex to manage, and as clients can cancel contracts with 60 days' notice, people's perception of the service has to be exceptional.

According to Michael, previous surveys depended a lot on past behavior and renewal, but the business decided they needed to have a different approach. They rolled out the new program in 2007. Now NPS is aligned with DNA. As Michael says "we eat live and sleep this". As executive, Michael led the way as he felt that NPS keeps the business true to the client.

Roger then described how the program was implemented.
Michael's division was part of the pilot group. They figured out a formal plan and focused on training the leaders. They educated employees through webinars (for leaders and general), a newsletter and a comprehensive program package. They also focused on customers...they explained that their
feedback was required. They promised to follow up, even if they couldn't resolve problems overnight. They said that honesty was critical.

According to Roger, you have to have passion throughout the organization. He hand-selected promoters throughout the org and trained them to a higher level--they became his internal advocates.

Roger made the messaging very simple...all feedback, positive or negative is important. Response rates are critical. The score does not matter (at least in the beginning). No cherry-picking, and this program is going to stay.

In the first 6-8 weeks of the program, management has a key role to play
-->to enforce the protocols, eg responding to everybody
-->to continue to educate
-->to manage the emotions
-->to support their teams

They developed an online survey platform that had automatic alerts and tracking on all feedback. All scores are available to management 24/7.They focus on the status of followup on surveys. Status needs to be close to 100%...that means that all surveys are being actioned.They review their accounts by looking at all key stakeholders in that account and whether they are a Promoter, Passive or Detractor.

Aisling viewpoint-->The really great thing about this program is the rigor around action planning and the fact they get back to EVERYONE.

They do monthly formal reports and theme reports.They also embedded in all regular meetings at all levels. Even down to individuals...but not based on score...on response rates and followup. They share best practices across divisions within FirstService.

The reports help investment decisions, process improvements, services and training. Low NPS are looked at more closely.

Key takeaways

• Get leadership buy-in
• Constantly educate everybody
• Exude passion
• Commit to it
• Report and be transparent
• Embed into regular processes
• Let it guide long term decision making.

Some general questions

How did you train the managers to be professional about feedback?

We did a pre-game...
--training
--allowed open dialog, and enabled them to address fears
--normalized the feeling
--identified who was most anxious and rallied around them

Explain sample communications?
--communicated to customers that program was starting and they would receive a survey
--made sure employees saw the letter before the board member got it.

How did you get finance on board?
--speak and think like a CFO and describe in terms that will resonate...eg leads and promoters
--Need to spend more time on economics

What are stepping stones to establishing NPS?
--start small, find a passionate leader in that area,
--if you are small enough, you should bite it all off

Your emphasis on feedback vs score was interesting...still the case?
--some BU's do now. Very tentative on scores as don't want that to be the focus
--first year is a drill down on feedback. Later scores can be a component of running the business

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Richard Watts, GM, Progressive, kicked off his session with the story of Dave an executive at Progressive and his mother.  Dave mom signed up for Progressive insurance but at the end of the process Progressive has a policy to send out another form that needed to be signed in order to activate the account, because Dave’s mom, like so many others, didn’t complete the process and sign the form Progressive canceled her policy. In fact they were canceling a lot of people in Pennsylvania. So Progressive looked at their process and  found out they didn’t need the form and didn’t need to get rid of all these new customers.

Their new motto -- “Would you do that to your mom?”

Progressive has 8% of market share = $14 billion in business so acquisition is very important to the company.

For insurance companies retention is key to their business.  For Progressive, one month retention translates to more than $1 billion in additional premiums and retention is part of their annual bonus process.

To aid employees in focusing on their customers Progressive has developed a customizable dashboard that lets the employee manage the customers.

Verbatim comments have become the treasure.  To provide additional insight they are sent directly to the employees’ dashboards at their desktops enabling them to track loyalty based on varying factors like renewal notices. Employees are rewarded for their efforts at the Annual Progressive Promoters Dinner – where employees with the highest NPS score are invite to attend.

Progressive is really listening to the customer and implementing process improvements.

Looking at additional ways to improve processes Progressive saw that they send so much paperwork and notices that customers can’t tell what is important.

Progressive is always looking for ways to give customers a little more some examples are:

• Pet Insurance - Progressive really won hearts by offering pet insurance. They tie it into a social network where people can share pictures of their dogs and be part of a community.
• Claims Process - Because of their claims process where you drive in and then you get a rental car, Progressive does everything else so those customers that have ever filed a claim are the most happy.
• Additional Special programs like:
  • Name your price
  • My rate – where you get discounts based on driving habits

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Eric Murphy discussed his journey to transform Ingenix from a product-focused to a customer-focused culture.

Eric has partnered with their COO and the CEO to get all 11,000 of their employees to change their mindset. How can you go about this? Eric offered an honest assessment of where they are 18 months into their journey: and how NPS features in this transformation strategy.

They have 11,000 employees to cover 250,000 clients. Of those clients, about 240,000 are physicians. But that still leaves them with 10,000 business clients to manage with 11,000 team members, total. How could they treat these 250,000 clients in a way to generate delight?

He described how they use NPS as the measure of success for their Client Engagement Model. What was clear was Eric’s vision of how they will redefine, purposefully, the customer experience for Ingenix customers…in a way that is targeted and differentiated. He used words like, “trusted partner” to describe how Ingenix is focusing its efforts with its most strategic clients and partners.

To accomplish this, they are stitching together over 250 unique IP assets (software, data), as well as the silos of people and expertise that were huddled around each of those areas of speciality. The challenge he described, which many B2B businesses also struggle with as they grow, is to bring that wide variety of capability into an integrated solution for a strategic client.

Words Matter

Eric is the Chief Client Officer at Ingenix…but that wasn’t his title just a few months ago. He changed his title from Chief Sales and Marketing Officer to Chief Client Officer to reinforce the client-focus that he wants to have permeate throughout the organization. They have also changed titles from “account managers” to “client managers.” As Eric put it, he wants to remove the word “accounts” from their vocabulary.

But it’s not just words. They have also redefined their team structures around these “client managers,” and have put their expertise within the business units. As soon as they did this, magic started to happen. They also changed their compensation structure, to focus more heavily on client success measures. His goal is for their most strategic clients to for all to be Promoters. It is a lofty goal, but ultimately, the bar needs to be set so high to achieve his vision of success with this key client group.

Start with Good Data

Eric admitted that the quality of their contact data when they started was not up to snuff. In the first few months alone, they were able to make incredible strides in understanding who the key decision makers were, cleaning up their data, and more effectively communicating with customers about the goals of the feedback process.

Results So Far

Their initial results, only 18 months in, are impressive: a 22 point increase in their Pharma sector, and 28 points in their employer segment.

My Favorite Quote

“I had a marketplace that wanted to buy a kitchen, and we were selling them pots and pans.”

More about Eric Murphy and Ingenix

I interviewed Eric back in December, and you can find more details on the Ingenix story by clicking on this link: Q&A, December 2009.

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Why is it that companies operate the way they do? What happens when new players enter an industry, or a major competitor changes the rules of the game?

Richard illustrated this with examples from several industries, and with a bit of economic theory too.

For example, why is it that hotels have fixed check-in and check-out times? Turns out, it’s mostly about the cleaning schedules. Yet the cost associated with cleaning is only a small fraction of the value of the customer’s stay. One company, operated by renowned hotelier Horst Schulze of West Paces Hotel Group, is innovating by doing away with fixed check-in and check-out times. Why not just organize your hotel stay based on your schedule as a guest? Now that’s an innovation.

Richard pointed out that most big changes tend to come from entrepreneurial companies and new entrants. But innovation isn’t just about products! The first three examples he chose were all, essentially, about distribution channels:

• Avon: Started by David McConnell in the late 1886, and first branded as Avon in 1928, was a major innovation in the sale and distribution of cosmetics...as Richard described the Avon model which leveraged personal networks and social relationships, I realized that social networking (just like word of mouth) is nothing new!
• Dell: Michael Dell decided that the notion of selling computers through dealers might not be the best model. This led to one of the biggest innovations in high tech distribution with Dell’s online "built to order" processes, that have changed IT purchasing and the computer industry.
• Amazon.com: Want to buy a book? If you’re my age, you remember the days where you had to call around to see which bookstores had the book you wanted in stock. Or you had to wait until they could order it from the publisher or from another bookstore. As Richard put it, "Going into a bookstore had its limitations on choice, convenience, and price." Honestly, my kids wouldn’t have a clue what the fuss is all about. Amazon has changed distribution for books, and many other categories of products, by moving the shopping experience online.

But Richard’s biggest innovator accolades went to Wal-Mart. Walton’s original idea was to be an innovator in distribution. He used to fly his plane around the US, and look for small towns with lots of homes but no large stores. As Richard put it, "He brought choice, distribution, and price efficiency to lots of cities where this simply didn’t exist."

My Own Experience at Wal-Mart

After hearing Richard's talk, I was writing this summary and reflected back on my own experience with Wal-Mart.

I was in the midst of that revolution growing up in Oklahoma, not far from Wal-Mart headquarters in Bentonville, Arkansas. What Richard failed to point out was the incredible tension this created in rural communities, where the Wal-Mart store put many small retailers out of business. But even if you had friends in small town retailing (we did!), you had to eventually accept the reality that Wal-Mart simply offered a better overall mix of choice and value…which was what the customer wanted.

In fact, I experienced it first hand, working in one of my first jobs as a cashier at Sam’s Club, Walton’s warehouse retailing giant. I was always amazed at how far people would drive from surrounding communities to buy products at the Sam's Club where I worked. This was Walton out-selling himself! What the local town Wal-Mart couldn't deliver, they could get by driving to the nearest Sam's Club (even better prices as a member).

I even had the pleasure of meeting Sam Walton himself when he stopped in at the Tulsa store on 46th and Sheridan Road, where I worked…driving up in his pickup truck, decked out in a baseball cap and jeans (yes it is true what they say about him). He was already the richest man in America in those days, thanks to his innovative approach to business, but I think he stayed true to himself. And he understood what the average person in a small town needed.

Richard Discusses Exceeding Expectations (aka The Zone of Tolerance):

As Richard noted, Walton had 10 rules for doing business, and rule number 8 was "Exceed your customer’s expectations. Give them what they want, and then give them a little more." It’s similar with Net Promoter. The only way that you can really create lots of Promoters is to redefine what people expect in your industry, or by significantly exceeding their expectations so that the customer notices.

Richard illustrated this idea of "exceeding expectations" by asking two volunteers up on stage. As research has shown, expectations are grounded at a certain level based on what consumers know from an industry, and there is also a higher level that defines what consumers really want. Researchers have called this the "zone of tolerance." But this range of expectations moves around. It moves with Price, first of all. It also moves based on what people experience from other companies.

In most industries, the players sit in the center of the zone of tolerance. But what happens periodically, is that companies completely redefine what people want by delivering a new type of experience, and this is a key factor in generating legions of promoters. This is what major innovators like Avon, Dell, Amazon, and Wal-Mart have done in their day.

Richard also went into a discussion of Game Theory, and how the interactions between companies tends to lead everyone to the "middle" of the zone, generating lots of passives. Think of this as a sort of, "lock in" with standard operating procedures, making it hard for companies to break away from the pack. Even if you try to make a big change, it can be incredibly hard to get your operations to adopt the change.

But occasionally, this balance is disrupted by an entrepreneur (from the outside) or (more rarely) by a major change from the inside. He used GM as an example of a company in crisis that has had the impetus to start major change. They are working on two major innovations right now. The first is a money-back guarantee. This is common for some smaller purchases, but it’s a big change for auto purchases. He rated this one with a thumbs up.

The second innovation they have tried is to sell cars online, using an eBay auction. They ran this experiment for 6 months recently (click here for Richard's blog about it when it was first announced), but it didn’t pan out well.

What went wrong? Richard believes this failed primarily because they didn’t complete the innovation…they just routed people into the dealership, and it was back to standard operating procedures again. This illustrates the difficulty of making change happen.

Bad Baggage

The airlines seem to be moving in the opposite direction, by charging for bags. "Is it a race to the bottom?" Richard asked. Luckily, not everyone is playing the game. As Richard pointed out, "Southwest now can create Promoters by doing absolutely nothing at all!" "Bags fly free" is now a differentiated experience, and Southwest is advertising about it.

Other great innovations Richard pointed out included:

Reed Hastings founded NetFlix because he hated the fact that Blockbuster was making money off of him by charging late fees. So he innovated in the other direction, redefining what people expect from home movie rentals. I've got some more thoughts on NetFlix in this blog post.

Online dating websites: why limit your choices to people you happen to meet through your personal network? Online dating websites have changed the paradigm for this completely.

Richard ended with a challenge for conference attendees in their own businesses. What is happening in your company and your business that relies on industry status quo? Are you a victim of living in the zone of tolerance? How will you break out of it? That’s some food for thought as we kick off the conference.

Sam Walton quotable quote (courtesy of Richard):

"Swim upstream. You should go the other way and ignore the conventional wisdom."

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