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Net Promoter Community > San Francisco Conference Blog 2009 > 2008 > December
 

I spend a lot of time with my clients in the B to B world discussing Customer Experience as a strategy platform for growth. While customer experience in the consumer space has been well understood; how it might apply in complex business to business services is not. Regardless of whether or not you sell tangible products or more intangible services, customer experience counts.

 

The term “Customer Experience” means a lot of things to different people. I define the term as the sum of all experiences that a customer has with an organization over time, and how that influences future behavior. Of course the particular behavior that we are concerned about is whether the customer will buy from us again and also be an advocate for others to purchase from us. By a strange coincidence (or not so strange) this sounds similar to the goals of Net Promoter.

 

Net Promoter, for me , is a great tool to measure Customer Experience at a macro level. But once you have the measurement, what happens? If the measurement goes up or down do you know why? What are the operant factors that drive NPS in your particular environment? Most of my clients don’t really have good answers. The traditional operating metrics in B to B organizations are meant to drive quality improvements, focused on efficiency, cost reduction, etc. Few if any quantitatively measure the elements that affect customer experience. Few understand how customer touch points, business process, business systems, company policy, culture, HR practices, regulatory compliance and other factors affect Customer Experience and NPS.

 

The issue is that companies and employees want to care about the customer, it is in the mission statements, it is on company slogans, but then they measure their operations around models put together by the likes of Demming or Adam Smith who were focused on the industrial revolution. If you want to measure and drive efficiency and quality programs then you need to know how that will affect customer experience.

 

The world is a service based economy. The GDP of the world is driven by service. In the US alone, 75% of the GDP is from the services sector. We need new models to measure and monitor success. Using the customer as the ultimate measure and arbiter of that success has to be the way of the future.

 

If you are working on these issues for your business, I look forward to exchanging ideas with you at the upcoming Net Promoter Conference in San Francisco.

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How is this economic downturn affecting your business? More importantly, how is your company responding?

 

No matter what industry you're in, your company is feeling the impact from the credit crunch, commodity inflation, and increasing unemployment. With declining sales & margin, it's easy for leaders to focus on the short-term cost containment efforts that help us make the current quarter. What we fail to realize is the tremendous opportunity we have to leverage the greatest asset in our portfolio... our customers!

 

When you have fewer dollars to spend on customer acquisition, one of the most important areas of focus is on maintaining and growing your current customer base. But, customers will often look for a better price in this type of environment. So, how do you create customer "stickiness"? Improve the "value" you bring in helping your customers grow and the "experience" they have in working with you. Create promoters! (Net Promoter is one of the key strategies we at GE are benefiting from to do just that!)

 

Why is this really important and what actions do you take to realize greater "value" and to create a better "experience" for your customers?

 

Learn from the Experts

 

We are fortunate to have three experts in this area to share their strategies and best practices with you. You'll also have a chance to ask questions about the tough issues you're facing.

 

Aaron Cheris, a partner with Bain & Company, will share his perspective on how to leverage specific interactions with your customers to shape their overall opinion of the relationship with your company.

 

Jeanne Bliss, Managing Partner, CustomerBLISS, will share "ideas that will bring you dividends in rising above the fray and in soothing the frayed nerves during this time of spending woe." I attended Jeanne's awesome session last year and am honored to work with her as chair of this year's track.

 

Bruce Temkin, VP & Principal Analyst, Forrester Research, brings years of experience in the area of customer experience and will bring insights from his research and work with other companies. I know you'll find his work fascinating and will have lots of questions for Bruce.

 

As "Point of View Q&A" track chair, I promise you three engaging and useful sessions! I look forward to meeting you at the conference!

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I know travel budgets are tight, but if I were you I wouldn't miss the opportunity to join us in San Francisco the last week of January for the 2009 NPS Conference. After all, referral from loyal customers may be the only way many companies can grow in this difficult economy. So NPS is more timely than ever, and the San Francisco conference should be a great investment.

 

 

Walt Bettinger, CEO of Charles Schwab, will kick off the meeting with the story of Schwab's remarkable NPS-powered turnaround. You may have noticed Schwab's full-page advertisements in the Wall Street Journal, New York Times, and elsewhere showing how the company is outstripping the competition in terms of growth. Walt will take you behind the scenes and explain how his firm improved its Net Promoter Score by 50 points and so revitalized its growth.

 

Tony Hsieh, CEO of Zappos.com will be reviewing his successful strategy for growing this internet shoe retailer to more than $1 billion in sales by earning superior customer loyalty. One doesn't often hear the terms internet retailing and superior service in the same breath, but Zappos has shown that this formula does work, even in today's tough economic environment. Hsieh doesn't even measure average customer hold time for his phone reps because that might distract the reps from their primary mission: providing such outstanding customer service that customers become promoters for life. Instead of devoting large amounts to marketing and advertising, Zappos gets better revenue results by spending that money on delivering superior service.

 

David Henry, CMO of Logitech, will also be joining us in San Francisco to explain how he has integrated NPS into the engineering and product-focused culture of this computer peripherals superstar. Brand management at Logitech really boils down to figuring out how to ensure that the vast majority of customers for their various brands actively recommend to friends. You will learn how Logitech is dealing with the challenges of channel management, product development, and customer support--all with the help of the Net Promoter management framework.

 

And before I run out of space, I have to mention that Brad Smith, CEO of Intuit will be describing his firm's progress with NPS. Since Intuit was one of the first firms in the world to adopt NPS, Brad's presentation will be particularly enlightening to those who are only one or two years into their Net Promoter journey. Incidentally, if you're wondering whether NPS can be helpful to your career, Brad ran the division at Intuit that most effectively embraced the Net Promoter tools and framework--and his rise through the ranks has been meteoric.

 

Now I have run out of space, so I can't fully comment on the more than a dozen other speakers from firms like eBay, Swiss Reinsurance, GE Healthcare, MARS, PWC, Bain...the list goes on. This group represents the strongest lineup of any NPS conference since our first conference two years ago. And with the exponential expansion in the experience from the Net Promoter community to be shared at breakout sessions, over meals, and in the halls, you just can't afford to miss out. If you believe customer loyalty is the most efficient way to grow, particularly now, don't make the mistake of missing this event. Hope to see you there!

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Yes.

 

I do think that the answer is that straight forward: Customer experience is critical in an economic downturn. But in this environment, there are a lot of questions.

 

When I surveyed executives from large North American firms earlier in the year about the impact of a potential economic downturn, only 15% of respondents felt that customer experience would become less important and 42% thought it would become more important.

 

And when we asked about spending changes, 35% of respondents said that their firm would cut spending on customer experience at a lower rate than other areas. Only 10% of respondents thought that they'd be cutting customer experience spending at a higher rate than other areas.

 

I think that it's reasonable to ask: Why should customer experience be more resilient than other activities? Those of you that read my research or read my by blog (Customer Experience Matters) know that I often write about a concept called Experience-Based Differentiation (EBD). It's a blueprint for customer experience excellence which is built on three principles:

 

  1. Obsess about customer needs, not product features.
  2. Reinforce the brand with every interaction, not just communications.
  3. Treat customer experience as a competence, not a function.

 

To understand why customer experience should be resilient, let's look at how each of these principles of EBD plays out in an economic downturn.

 

1. Obsess About Customer Needs

 

Rather than racing to bring new product features to market, companies need to refocus on the needs of their customers — who might even want fewer features. While most firms have invested in customer analytics, even the largest data warehouse and most sophisticated software can't model the nuances of human likes and needs. That's why firms should augment data crunching with some old-fashioned techniques like getting feedback directly from customers.

 

In a changing economy, customers re-evaluate everything. Their basic needs may not disappear, but their priorities shift and they look for creative ways to satisfy those core needs. So it's more important than ever to understand what's going on in the lives of your most important customers; deciphering their shifting requirements. With credit markets tightening, for instance, it's shouldn't be a surprise if layaway programs (like those at Kmart) become popular again with consumers.

 

2. Reinforce The Brand With Every Interaction

 

Advertising can still get some consumers to buy. But marketing messages can't overcome the reality of a bad experience. That's because customers are much more interested in what a firm does than in what a firm says that it will do. To tap into the power of a company's brand, marketing messages need to match the actual experiences that customers get when they interact with a company.

 

In a down economy, many companies are developing contingency plans and cutting budgets. With such a push for cost cuts, it's easy to lose site of your brand's core tenets. If companies let this happen, they'll quickly lose their differentiation; losing even more customers. To avoid this downward spiral, make sure to use your brand as a framework for setting priorities and keep reinforcing the importance of your brand with employees.

 

3. Treat Customer Experience As A Competence

 

Delivering great customer experiences isn't something that a small group of people can do on their own — everyone in the company needs to be fully engaged in the effort. It all starts at the top; the CEO and his executive team need to be fully engaged in the effort. To keep a companywide focus on customers, companies need a systematic and continuous approach for incorporating customer insights into all of their efforts.

 

When times get tough, employee morale can drop rapidly. If this happens, then customer experience will drop as well. One of the laws of customer experience is that unengaged employees don't create engaged customers. Left unchecked, firms will lose the loyalty of their two most precious assets: customers and employees.

 

Hopefully I've answered the question about why customer experience should be more resilient in a downturn. But you might be wondering: why did Bruce write this post on the Net Promoter blog? It's because I'm speaking at the upcoming Net Promoter Conference in San Francisco. The topic of the event, Driving Customer-Focused Behavior, is directly aligned with my research and consulting efforts. My session will focus on recent research about the five stages of customer experience maturity.

 

I'll end this post with one last question for you to think about: What path will you take with customer experience? One thing is true about all economic downturns: They all come to an end. So you have to decide whether you want to manage your way through it or lead your way out of it.

 

Good luck navigating these difficult times!

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We are trying something new this year to give you more opportunities to learn and interact with experts during the conference. On day 2 we will offer a breakout track called Point of View Q&A. The track is designed to give you an opportunity to hear from individuals with unique points of view on Net Promoter and customer experience. And it's a unique opportunity to get Q&A time with these folks. I'd like to introduce them to you in this blog post, because I have had the pleasure of meeting each of them.

 

The track will lead off with Aaron Cheris of Bain & Company. Aaron is a partner in Bain's San Francisco office, and works closely with Bain clients in the customer experience area, advising them on Net Promoter and customer strategy. I had the pleasure of meeting Aaron first about a year ago at Bain's executive discussion group called the NPS Loyalty Forum, which is run by Stu Berman who I have known for many years and who will be chairing a track with us on day 1 of the conference. Aaron will share his perspective on how you should be leveraging specific interactions with your customers to shape their overall opinion of the relationship they have with your company. This article from Bain touches on the importance of using NPS with specific front line interactions, particularly in sections 1 and 3. Aaron will explore the importance of this in more detail.

 

Another speaker in this track is Jeanne Bliss, who you will probably know if you read our monthly Net Promoter newsletter. Jeanne did a Q&A session with me at our last conference in Miami, and got rave reviews. She is back this year to discuss what she calls “Customer Love” in tough economic times. Get a preview of her thoughts on this subject by checking out her October blog post. She would like the session to be very interactive, so come with your questions in hand.

 

Finally, we will be joined by Bruce Temkin of Forrester. Bruce is known for his customer experience blog, and has done extensive research on the topic. In fact, about 2 years ago I met Jeanne Bliss at a Forrester conference in Miami, where she was being interviewed by Bruce about whether companies should have a “Chief Customer Officer,” the title of Jeanne’s last book. Bruce will be discussing this issue of how companies organize to get better customer focus, as well as the broader topic of where most companies are today when it comes to the maturity of their customer experience efforts. If you want to know more about Bruce, you can check out Bruce’s Customer Experience Matters blog and download a free copy of his "book" on The 6 Laws of Customer Experience.

 

The track will be hosted by another expert from the company side. Vivian Hairston Blade is responsible for the global NPS process at GE Consumer & Industrial, and was with us last year as a guest speaker. You can read the blog about Vivian's session from last year, or watch a short video clip of it by way of introduction. This year, she will be the one blogging, and I'm sure many of you will want to track her down to discuss what she has learned about making Net Promoter work for GE.

 

So that's a snapshot of 3 sessions, among the more than 30 that we have planned for you in January. If you have questions for one of these folks, feel free to post a comment here and I'll share it with them as they plan for their session.

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