Alexandre Murat — Sony Style Europe

Alexandre helped us tie together many of the ideas we explored today, by telling us how Sony is integrating NPS into their DNA. How they have moved from a product-focused company, to one that is more and more focused on customer experience.

Why use NPS? They wanted to find a metric that would link their business activities to innovative experiences (combining product with overall experience).

They have done this by focusing on 4 steps:

1. Understanding and interpreting customer needs, using feedback as the central point for this. And on this point, he separated "process improvement" from "innovation," pointing out that the first is great at removing defects, and must be paired with the latter to get to really excellent experiences.
2. Engaging on strategic improvements. What they have found in analyzing detractor comments is that operational improvements are linked primarily to having products in stock and at a competitive price. By contrast, the more strategic and impactful factors that lie beneath detractor ratings are linked to the range of products available, and the convenience of dealing with Sony. When I hear "convenience," I think "end-to-end" experience. I get it!
3. A big focus on service interactions and service "amplification". Operationally, they track this closely with NPS, receiving about 2000 responses per month based on surveying online buyers. And they close the loop with all detractors, because to them, complaints are a huge opportunity to improve.
4. Using customer feedback to find totally new value propositions, and integrate this into their product line. Sony Style in the has already established about 200 stores in the US, and they are starting to do this in Europe now also. In fact, one of their flagship stores is opening about a block from where we are today in Paris, on Avenue Georges V, just off the Champs Elysees.

By the way, Alexandre admitted he was pleasantly surprised earlier in the day when Ralph Hababou, told his story about the WOW experience he had when dealing with Sony for a repair on his Vaio. Kudos to the Sony customer service department! If they can delight Ralph, who is an expert on the topic, they must be doing something right.

Alexandre concluded by talking about the importance of the Golden Rule. Clearly, they are committed to doing the right thing by the customer, and they are investing in several major initiatives...but many of them are still undercover. So watch for more new things from Sony in the near future!

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Marc Annè -- Orange Business Services

Orange Business Services offered an excellent B2B case study to balance out the day. OBS is one of the world's largest B2B telecom companies with a network covering 220 countries and territories, and customer service centers in 166 countries. If you are from Europe, you probably know of Orange as either a consumer or a business telecom provider.

When Marc started to describe the complexity and size of their business, it was obvious that they had really started cracking the code on using customer feedback in a B2B setting. He described the difficulties they had 6 years ago when they started their customer experience journey...and how this has changed into a more streamlined focus through their "Outstanding Customer Experience" program. It has 4 big focus areas:

1. Transforming the company around customer "pain points" as well as pushing the envelope on "differentiation factors."
2. A centralized and coordinated client approach, with priorities set quarterly across the organization.
3. Pragmatic prioritization, based on understanding key levers.
4. And linking to operational KPIs that underlie the outcomes they want to achieve.

Next, Marc described how they have integrated NPS within their complex B2B environment. They approach Net Promoter as a discipline, and do consider the importance of promoters and detractors in strategic account planning. But in addition to the likelihood of recommendation, they also track 3 other important relationship factors within their customer loyalty index (CLI), including repurchase intention, whether the customer would choose them again, and overall satisfaction.

What they have found in using the CLI for many years (actually, OBS was working with Satmetrix using the CLI before Net Promoter existed!), is that 40-45% of the index is influenced by issues related to brand image. But the rest of the index is basically controlled by the direct interactions they have with their clients. And they have made great strides in this area, as represented by their leading position in recent third-party benchmarks published for telecom companies in Europe.

So what happens deep within the company to get account teams to engage with customers and make sure that they are closing the loop effectively? It all starts and ends with direct customer conversations. They communicate directly to the client the role of the feedback survey in their business process. Then they solicit the feedback electronically, review it internally, make individual account plans and take these into 1:1 client meetings to discuss how they can move the relationship forward. And it's a true dialogue...often, these follow up meetings result in new ideas and revisions to account plans to ensure that the feedback was heard correctly and to spur account level action plans.

Next Marc shared a great with us. Great for us...but obviously not something that was fun internally! They had a major customer, and they thought that everything was looking good. But suddenly, they lost this major account to a competitor. What was up? It turned out that the account teams had not included all of the potential decision makers in the feedback process. So when the buying decision moved to a new group, they were taken by surprise. This issue is HUGE in the B2B setting. And it's all about relationships and data quality. Did you ever wonder what is going on with non-responders? Well, guess what... it's not just the non-responders that can get you. It might be people that aren't even on your contact list! This highlighted for them the importance of having account teams get back to basics, and map out everything they know about the client organization and potential people they should be in contact with, not just via the survey, but in the day-to-day interactions with the client.

Thanks, Marc, for reminding us that a customer feedback survey is just one way that we need to communicate with our customers. It's a tool that you can use to improve, but don't think for a second that it can replace doing the basics right when it comes to account management!

Finally, Marc shared with us some NPS statistics from their business since January of this year, comparing NPS with their sales pipeline. What we saw was that NPS was tracking very closely with pipeline health. It reminded me of many conversations I have had with sales leaders over the years. They have often said, "John, if there are problems in the account and they are not happy, then they aren't going to let me come in and sell something new until we address whatever the issues are first."

I don't want to put words into Marc's mouth, but I certainly saw something along these lines when I looked at the monthly NPS data, and how that tracks to their changes in pipeline... And he points out that if you are in a business (like they are) where customers often are operating under multi-year contracts, then the linkage from NPS to results may show up much more quickly in new pipeline opportunities (since these are customers who are making an incremental purchase decision), versus overall revenue data, which has a multi-year renewal cycle attached to it.

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Ralph has been writing about great service since his first best seller book in 1986. He started with an old Chinese proverb...that says that someone who doesn't smile should not open a store. This one really woke up the crowd...he challenged the crowd about France's reputation as a country that is not particularly service focused. Wow, this guy knows how to spin a funny story. He made our own experience better for the day (now that's customer experience!) with his humor and his passion for customer service.

So what's new with Ralph? He recently decided to go back to businesses in France, and find out what has changed since 1986 when his first book came out. The big message was about just how much more choice the consumer has today...the level of competition has gone through the roof. But unfortunately, the way companies operate when it comes to service hasn't really changed.

Ralph's philosophy fits right in with the Net Promoter principles. He talked about the importance of operating at a totally new level...of thinking about service experiences that will truly "WOW" your customers. And it takes a lot of creativity to do this in an environment where consumers have access to more information and choices than ever.

But the best companies are figuring out how to do this. Ralph told a story about his Sony computer that died the other day. We had two clients from Sony in the room (including Alexandre Murat who was presenting later in the day), and I was a bit worried what he was going to say. But his answer was "WOW". The support person was great, and what's really amazing is that when the line dropped, he had the pleasant surprise to get a call back from the Sony rep while he was trying to re-dial. That tiny bit of personal service made a huge difference. See guys, it's not that hard to delight a customer!

Ralph shared some great themes from his new book, Service Gagnant (which means "Winning Service" in French). Here were some of his thoughts (and he illustrated them beautifully with examples from well known companies like Avis):

• The customer has gone from "king" to "dictator."
• Life expectancies have never been higher, but our perception of time is shorter than ever...we expect things immediately.
• We've moved from customer service to customer care...it's about making the customer feel unique and special.
• It's all about customer lifetime value, which means you need to think long term.
• The client is becoming your most important salesperson...and here he linked directly to the importance of having a holistic measure to know if you are creating happy customers, like Net Promoter.
• What used to be "excellent," is now considered "good enough". So the bar is always being raised when it comes to customer expectations.
• Finally, he stressed the importance of looking at complaints as a gold mine.

Ralph shared some data showing that only 9% of customers who had a complaint and said nothing actually continued as a customer. On the other end of the spectrum, when they complained and had their problem resolved, 80% remained as customers. So you are better off getting the complaint, because at least those customers are engaged and are giving you a chance to recover!

In fact, nothing is more valuable than having your clients express themselves, and when you can figure out how to truly listen and use this feedback, it can turn detractors into promoters, and help your company improve in ways you hadn't imagined.

What about price? Ralph made a great point here...the companies who win figure out how to innovate around service, rather than having to cut price. I couldn't agree more! Clients often ask me what they should do when their customers complain about price, and I always tell them, "Well, you may have go there. But first, ask the question about value...and figure out if there is some way to use your team's creativity to deliver better value at the price that will make you profitable." Cutting price rarely leads to a good place...

One company came up time and again today, and if you don't know it, you should check it out. Maya mentioned it in her opening remarks, Ralph mentioned it, and our presenter this afternoon told me about it during the break (because his company, Weber Shandwick, works with them on PR and marketing). The company is Nespresso, and they have created an entire business model (online and offline) that gathers coffee enthusiasts into a membership service that offers an end-to-end experience around coffee. Everything from top tier technology and products for coffee making at home, through to unique coffees to purchase, and coffee shops where you are recognized personally as a member of the community. Nespresso must be doing something pretty amazing, so I'm going to check out their megastore on the Champs Èlysèes tomorrow. Here's their web site if you want to take a peek.

Ralph had to dash after lunch, but I had the pleasure of chatting with him over lunch. His English is impeccable, and he uses a lot of well known American brands in his talk. I'm looking forward to checking out his book, which gives me another way to brush up on my rusty French. Plus, I now have a signed copy! Merci monsieur Hababou!

Philippe Danielski shared with us AIG's approach to Net Promoter in a very decentralized, multi-cultural setting, and how important it is for them to have an approach that convinces the different operating units of the value of new ideas and processes. I have to give Philippe credit for his very honest and straightforward introduction around the current situation at AIG, which has been in the press a lot lately because of the financial crisis. What Philippe helped me understand is the size and scope of AIG's underlying insurance business, which has served clients around the world well for years, and continues to do so despite the unfortunate realities of the current financial crisis.

AIG has created an office of the customer, and he deals with the B2C and B2B2C businesses in that capacity. What they are looking to accomplish is to move the business model from one focused primarily on new client acquisition to a more active relationship with existing clients, to create a promotional spiral based on additional contact and activation of loyal clients.

One of Philippe's points was the importance of getting started with making some quick changes based on your business judgment. Then he described their roadmap for taking this to a higher level. At the base is a set of good products and services, combined with some basic information about your customer base. To this, you start to add layers of details... starting with cross sell and retention, then adding a deeper understanding of the client via NPS... which drives a capability for creating new experiences. The end point is more loyal clients.

One of their big points of focus in terms of experience design is to really focus on the main moments of truth, and to make specific changes to reflect what they know about personal events happening in the customer's life. Such as special communications and offers that are linked to events like birthdays, family changes, moving house, or other things that are, actually, a pretty big deal in peoples' lives! And when they get personalized communications, it's a great way to make them know that your company cares about them personally. These types of programs and changes, have allowed them to double revenues in some cases.

Philippe also made the point that by making small changes in retention rates, you can have a huge impact on growth rates, as well as long-term customer profitability as studies by Bain & Company have shown. He also confirmed that AIG has looked at many markets around the world, and have found that clients who are "satisfied" sometimes still leave (again, consistent with Fred Reichheld's published work). In one study in Singapore, they looked at customers who had resigned, and over 50% of them said they would return as a customer if AIG could offer better service.

I thought he summarized all of this nicely by highlighting the fact that they have focused on moving from a "push" model, that is about marketing and selling to clients, to a "pull" model where excellent customer experience generates a natural positive image and word-of-mouth to bring in new customers. And ultimately, this all comes down to demonstrating every day to their clients that they are listening.

The act of listening, and responding to the client, is right at the center of developing deeper relationships.

What about "telling" the customer what you are doing for them? In their US auto business, they made 75 specific changes to improve benefits for customers. The problem was that they hadn't done anything to tell clients about it! They thought that clients would eventually notice... which they might. But I have to say that I agree totally with Philippe. It's so important to find a way to reinforce what you're doing in your communications. What it does is speed up the customer's realization of the actions you are taking... so they give you credit faster (that is, if their experience is in line with your communication of course!).

And Philippe pointed out strongly that if you spend your time doing long surveys, and are not prepared to respond to what the client has to say, it's better not to ask at all! So they want to ask about NPS in a way that is closely linked to key moments of truth, to ensure they can easily link it to actions. Whether that is following a win or loss, or a service or claims experience, they want to make sure the feedback is timely so they are able to recover quickly if there is a problem. They also want to link the feedback to the front-line employees who have touched the client directly, to use this for coaching and improvement... whether it is a sales person or a claims representative.

Philippe shared with us some interesting data about their auto customers in the US and Spain, and he made the point that as their NPS has increased, they have also been able to track the number of recommendations that are happening. And both trends are very positive. Another example was from AIG Direct (my auto insurer in fact!), and they found that just by calling back detractors, they got much lower lapse rate in their coverage, and a strong ROI on the investment of time and resources. And guess what, the changes they are making are helping them retain employees too. Thank you, Philippe, for sharing so much rich detail about your findings around NPS. The audience really appreciated it.

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Bienvenue à Paris!

After 2 years of Net Promoter conferences, we are thrilled to hold our first one in the city of lights, in French. And my team finally convinced me to try my hand at blogging! So for those of you who couldn't make to Paris, or who decided not to attend because your French just isn't up to the task...you have here a summary in English of the day's highlights from well known brands including like Expedia, Orange Business Services, Sony Style, and AIG, as well as our guest speakers for the day who consult and write about customer experience, customer service, and marketing.

Yours truly, John Abraham, and Maya-Coralie Blanc, Satmetrix

We started the day with an introduction from Martin Green, head of EMEA for Satmetrix. Martin and I have both spent the week practicing our French, and it was great to finally get past the nerves and share our thoughts with the audience! Martin introduced the day's agenda, which was conceived as a balance of practitioner case studies, and expert points of view.