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Net Promoter Day Paris Blog 2008

3 Posts tagged with the nespresso tag
JohnAbraham
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Arnaud Pochebonne — Weber Shandwick

 

Arnaud gave us a fresh view of NPS, from the standpoint of public relations and PR. How does advocacy fit in with NPS when it comes to marketing and PR strategy?

 

Not that many years ago, the PR profession really thought about word-of-mouth in a hierarchical sense. Strategies were focused on the opinion leaders in a space, with the idea that this would trickle down through various press and communication channels to the general public. But this top-down model has basically been turned "upside down"...or at least sideways! Now, you can find consumers with lots of influence almost anywhere in the pyramid.

 

He used a new term for me in French called "info-consommateur"... which is his translation for the word "advocate." Evidently, advocate doesn't really have a direct translation into French. These advocates can have a bigger impact than ever, by sharing their opinions and stories online which basically amplifies their voice...and keep in mind that they can be promoters or detractors of your brand!

 

He also discussed a study they conducted with 4000 European consumers, covering NPS and word of mouth in 4 countries: UK, Germany, Spain, and Italy. The study included 5 different sectors: TV, cellular phones, personal PCs, autos, and liquor brands. What they noticed is that within the population of promoters, about 60% of these consumers are actively involved in recommending.

 

Let's stop for a second here, because I get this question a lot... Do all promoters really "promote" and spread the word for you? Well, they certainly are a lot more likely to exhibit these behaviors than passives or detractors. But as Arnaud points out, Net Promoter is based on understanding someone's likelihood of recommending. It's slightly different from asking whether a person has actually made a recommendation. So you need to create those promoters first, then you can try to activate as many of them as practical.

 

So what can you do to help a consumer "promote" your brand? One key point they found in their research is that the more you inform and educate your customer, the more likely the will be to actively share information with others. So if you're not sure about where to start to "activate" promoters... think about educating them.

 

He also showed some very interesting data linking NPS to whether or not the consumer had been "positively surprised." What they found was that NPS was very much correlated with this "customer delight" experience. And he stressed how critical it is to align marketing and advertising messages with actual experience design and delivery. When these things are in alignment, then the level of engagement and brand attachment increases, and word-of-mouth from the consumer serves to amplify your message and, ultimately, your business growth.

 

And yes, as I mentioned this morning, he told us more about Nespresso, which is his client. Check out my notes from earlier in the day if you want to find out a bit about the Nespresso WOM that was going on during our Net Promoter Day in Paris!

 

To summarize, if the old marketing and PR model was focused on Experts and Opinion Leaders, the new model is focused also on Social Networks as well as Family and Friends. Hierarchy in PR strategy is a thing of the past. Thanks, Arnaud.

 

Click here to download the presentation.

1122 Views 0 Comments Permalink Tags: benchmark, nespresso, correlation, weber, pr, pochebonne, arnaud, w-o-m, advocacy, shandwick
JohnAbraham
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Domenico Azzarello, Bain & Company

 

Domenico, partner in Bain's Paris office, kicked off the afternoon with a discussion about the importance of Net Promoter economics, and approaching it as a transformation program. He highlighted the important connection of Net Promoter with key economic factors including:

 

1. customer tenure
2. level of spend
3. recommendations
4. price premium

 

We had some discussion earlier in the day about how companies can figure out how much impact word-of-mouth has in their business. Domenico showed a good example of positive and negative word of mouth economics, which led to some good questions about how you go about quantifying the WOM factor in your business.

 

Domenico did a great job of de-mystifying the whole exercise. When someone asked, "How do you go about figuring this out," he said, "You just ask them!" My colleague at Satmetrix, Vince Nowinski, has recently published some WOM economics studies for personal computers, credit cards, and cell phone providers in the US (available in white paper format), and we are planning some related presentations for our next major conference in San Francisco also.

 

Next, Domenico turned to several excellent pieces of advice that we should all consider. I'll summarize a few of them here.

 

One key idea was to define a clear "client promise" or "value proposition." How do you figure this out when you have so many different needs within your customer base? He highlighted the importance of understanding customer segmentation. If you start by segmenting, and focusing in on those customers who represent the majority of your profitability (the 80/20 rule), then you can put a much more focused lens on the type of value proposition that you should target. Once this is done, you can zoom in on the key moments of truth that matter for this well defined segment, and make the promise come to life in the way your employees deliver the customer experience.

 

Next he came back to the idea of separating hygiene or satisfaction factors (those things that will create detractors if they break) from WOW factors that have the potential to delight the customer and create a promoter. These WOW factors are things that really will surprise the customer if you do them well. He showed a great 2x2 matrix, contrasting interactions that can create a detractor, versus those that have the potential to WOW the customer. Where do your various touch points fall within this 2x2?  And how frequently do the touch points happen (the ones that are more frequent give you a better chance of touching more customers, making a bigger impact with one investment in the customer experience).

 

Now here's an example that struck me. Domenico discussed how companies like Four Seasons make a huge difference, just by the way they welcome customers personally on arrival (in fact, when I was headed out to dinner last night, I walked right by the Four Seasons in Paris, which is just next door to the Prince de Galles where we are today). Four Seasons has spoken before at our Net Promoter conference in Miami last year, and I bet you've heard about their amazing personalized service. It's almost legendary, and when you hear how their general managers run each hotel and how they hire and train employees, it's no surprise that they stand out!

 

So here's a question for you...how many KPI's do you use in your company? Domenico made the important point that you can't have too many targets. They basically will get washed out if you are trying to hold people accountable for too many things. So if you start to consider how to hold people responsible for the client experience, you need to skinny down the number of metrics...and you probably only need one key metric to keep focused on the client.

 

What I hear many successful companies do is to choose one key metric to know how they are doing financially (something like EBIT -- earnings before interest and taxes), one key metric to know how they are doing with the customer (this could be NPS), and one for the employee (lots of people are starting to experiment with employee NPS for this).

 

If you read my blogs from this morning's sessions, you might just guess what company just came up (yet again) as a great example of loyal customers! I think Nespresso has got something amazing going on when it comes to word-of-mouth in France! This is the third speaker of the day who mentioned them, and I know that our speaker this afternoon from Weber Shandwick is going to tell us more about it... I'll watch out for that later today. And thanks to Domenico for starting off our afternoon on such a rich note!

 

Click here to download the presentation

1358 Views 0 Comments Permalink Tags: domenico, whitepaper, w-o-m, bain, b2e, nespresso, wow, four, seasons, azzarello
JohnAbraham
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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!

2114 Views 0 Comments Permalink Tags: hababou, nespresso, service, wow, experience, gagnant, sony, customer