Net Promoter Community

For those that missed the Net Promoter Conference in San Francisco I wanted to follow up my pre conference blog with some random thoughts and lasting impressions that I have. In my blog before the conference, I asked the question:

What part of Customer don't we understand?"

In our Customer Experience consulting practice, we have encountered way too many customers who do survey their customers but do not or cannot use the feedback effectively. So, it was gratifying and impressive to see such a large turnout of customer zealots, especially in this business climate. I have opined in my blogs before that this is actually a great time to invest in improving your customer experience as your customer base is the path to future growth.

It was good to see the large turnout and that Richard Owen ( CEO of Satmetrix ) led off the conference talking about the importance of retaining customers as the cost of retention is far below that of acquisition of new customers. Save money, grow your business at the same time, how good is that? Equally impressive was the lineup of key executives from leading companies reiterating the same core principles. More importantly, we heard story after story that the Net Promoter score was not the goal; it was the fundamental business improvement that was facilitated by NPS programs that was the key. There were great examples of the Net Promoter economics as people had matured in their programs.

Some other themes were repeated by various speakers and attendees talking off to the side. Here are a few that I noted and whole heartedly endorse:

• NPS and customer experience requires the focus and endorsements of the C-suite executives to really be effective and enduring. Those that do embrace NPS have seen the results.
• Net Promoter Score is not the goal, fixating on great customer experience will give you a good score. The process is what helps you get better.
• NPS can be sponsored by the C-suite but still not be effective if you do not get engage your employee in the process
• NPS is about a journey and not a destination. It is not a program of the day. It requires commitment to the long term and lots of hard work to get the largest gains.
• Your customers are kind enough to give you the gift of feedback when you survey, you better darn well return the favors by ensuring diligent follow up.
• The C-suite cannot dictate good customer experience, it must be a part of the DNA, in must be nurtured and it needs to be a core part of the corporate values and operating principles.
• Survey may be a bad word. NPS is trying to encourage customer conversations. It is about how you listen to your customer and how you respond.

In the research that we have done around adaptive organizations and how companies survive for 50-100 years, the same factors emerge. While innovation is important, innovation does not happen without first listening to your customers. The more global that you are, the more that we use new media channels to connect with customers, the more diligent we need to be in listening to our customers. Like we heard many times during the conference, quite often the employee is the key channel from which we can gain customer insight and best influence the customer experience. Customer experience is not one job or one function; it is role of everyone in the company to drive positive, value added experiences.

The lasting impression that I took away from the conference is that interest in customer experience is growing, especially in B to B companies, and more companies are starting to understand the word “Customer” when it comes to their success.

Deborah Eastman, Chief Marketing Officer, Satmetrix

It was nice to see some focus on B2B business models. As the owner of a company that serves other businesses, this session was especially attractive to me – plus Deborah Eastman is always has the inside track on B2B and NPS. Eastman started off outlining the keys to success in using Net Promoter in a B2B environment:

• NP can be leveraged to improve relationships
• Make sure Net Promoter is integrated with the core business operations
• Insure that action is taken on any feedback

Eastman also suggested that the request for Net Promoter feedback be built into client engagement contracts to make sure projects don’t end without getting the feedback needed. The average NPS for a B2B company is 24%.

A key takeaway from this session was the best practice of only surveying twice per year and the response rates should be 60% or higher. Eastman cautioned against accepting high Net Promoter Scores without also looking at your response rates. High NPS’s without high response rates render high Net Promoter Scores almost meaningless and probably means that the data is not trustworthy. In fact, non-respondents should be viewed as detractors with the assumption that the individual doesn’t care about the relationship enough to take 5 minutes to complete the survey. Eastman recommends dealing with detractors in a very direct way – by responding IMMEDIATELY to detractors. In general, it’s a good idea to not let detractors feelings to fester. She says that she’s seen conversations with detractors result in upsells quite often. A session participant noted that many companies are quickly tiring of survey taking so many companies are creating their own survey evaluations for their top vendors and releasing the survey results to the vendors – a different spin on Net Promoter for sure.

At the close, Eastman recommended closing surveys on time and getting the results – along with action steps – out the door within 30 days. The potential debate is, whom should you return that survey data? Just to the respondents or to everyone regardless of whether they responded or not?

If you chose the former, you risk not engaging potential detractors (the people who didn’t respond) and filling them in on your company’s improvement plans. However, if you inform everyone, you air laundry and may point out areas of weakness that many people may not have otherwise known about. As with everything, there is a trade-off and you need to do what’s right in your specific scenario. Yet another reason to get certified – to help address pesky dilemmas like this one.

Click here to download the presentation.

Coaching Employees for the Ultimate Customer Experience

“Stop training your employees, instead provide them the opportunity to learn” was, in my opinion, a profound statement from Dr. Natalia Preiss who heads an education team at GE Healthcare. Natalia was the third presenter in our track series on ‘Developing Customer Focus in Service Operations’ at the San Francisco NPS conference. This presentation was right on track with the theme of the conference around ‘Driving Customer Focused Behavior’.

As one might expect from a great company like GE, Natalia showed a sophisticated approach to influencing employee behavior and how NPS helped to drive improved customer focused behaviors in her company. Dr. Preiss talked about the shock that the company went through when they implemented the NPS scores and methodology. Like many organizations her teams was used to high customer satisfaction scores based on the surveys that they used but were shocked by much lower scoring by using NPS. The natural reaction is always that the NPS score must be wrong, but in my experience with many client companies, the opposite is usually true. Over time, organizations with seemingly high customer sat scores tend to get complacent and ignore the hidden truths. Getting a more direct voice of the customer, and one that clearly shows future intention rather than individual past experiences, will yield greater benefit for both you and your customers.

Once GE set out on the path of driving better customer experience they took an interesting approach. They noted that employees that had typically higher NPS scoring exhibited distinctly different behaviors. They set about working on how to change behaviors that would drive NPS improvement. They identified four key behaviors that contributed to better customer outcomes. They were:

1. Humor
2. Empathy
3. Reduction of client effort
4. Setting of correct expectations in the mind of the customers

As you can see, these are things not easily taught, especially through formal training. Through coaching and process improvement, change can occur as you allow employees the opportunity to learn.
The four behaviors broke down to two dimensions with human emotional triggers like humor and empathy on one dimension and process triggers around reduction of client effort and setting of expectations on the other dimension. Using tools for which GE is famous, process triggers could be improved systematically. The emotional triggers required a deeper understanding of human characteristics. The employees needed to understand their own characteristics and how to recognize those with in the customer with whom they were interacting. The humor for one person may not work for another and the same is true for empathy. Coaching employees to not only recognize their own traits, helped them understand and recognize the customers key traits and how the individual clients might best be served. NPS certainly provided key feedback on the success of their programs.

Natalia spoke about how understanding human behavior and traits, both physical and cultural, are needed to connect with customers appropriately. Again, it was about learning, not training. She explained also that people can use the excuse that “ I am not trained for…” but cannot deny the opportunity to learn.

As we listen to our customers, as we connect with humans in connection with driving customer experience, we have some new challenges. What was once a face to face connection now might be one that is now facilitated electronically. Teams are virtual, values are changing and a new workforce is coming. GE understands that these challenges can be helped with the input received by the NPS process to drive employee coaching. Recognizing human behavior and understanding the customer help GE Healthcare drive customer focused behavior.

Deborah Eastman, CMO at Satmetrix, talked about improving NPS in B2B relationships. She focused on three themes:

1. It’s about relationships, not surveys (engage customers in a partnership)
2. integrate the program in the business (don’t rely on an independent NP team and demonstrate the value account teams receive which include protecting their key business assets: customers, and a better understanding of the customer relationship)
3. ensure action.

Deborah emphasized how a NPS program helps understand the strength of your customer relationships, be proactive in improving and leveraging relationships and avoid surprises in account churn and lost business. There are many customer relationships across the enterprise and the health of the relationships have traditionally been determined by the account teams. But, these can be very biased. While the team may believe all is good, the NP scorecard shows the real story.

Deb then reviewed best practices for creating and managing a successful NP program. She began with creating a continuous process where account teams are involved in all steps of the process from contact participation to account planning based on the results. Next, Deborah talked about the sampling strategy by understanding client revenue segments and roles (decision makers, influencers and end-users). Her experience has shown that NPS varies by role and revenue tier. She said that many companies conduct a pulse survey once a year. She suggested segmenting the customer base and surveying a segment per quarter. Twice a year per account is best. The first time should be a short (pulse) survey and the second a more detailed diagnostic approach. This is a good balance for the company and its customers and provides a good read on differences per quarter before it’s too late to act. Next she talked about defining and publishing timelines and synching with the business operations. For example, don’t require closed-loop follow-up at the end of a quarter when sales teams are trying to close deals.  She then talked a little about the importance of a governance structure for the program. With regard to survey design she said it needs to be focused, role-based (different survey for Execs versus End-users) and the importance of delivering surveys in the respondent’s native language.

Deb talked about actively recruiting for participation where the account teams need to engage clients by positioning the intent and benefits and setting expectations. She said if done right, you should have response rates of 60% or higher (the audience gasped). Deborah stressed the importance of immediate response since this creates opportunities. In one example she said that for one Satmetrix client immediate follow-up after a trigger saved an $8M account AND resulted in a $2M up sell. She talked about incorporating program results in account planning using account influence charts (NPS by role) and linking to business metrics (revenue by NPS).

The last best practice she shared was about closed loop processes where broad communication to all customers about actions taken will serve to increase response rates. She suggested doing this within 30 days of the survey close, but realized this can take a little longer in many cases.

Finally, Deborah warned not to tie compensation to NPS right away or it will surely kill the program – account teams will try to game the system. In closing, she shared a few case-studies on successful NP programs including a Business Telco company that experienced a 150% increase in orders and an IT product supplier who identified new opportunities in 39% of their follow-up meetings.

Aaron Cheris, Partner, Bain & Company
Troy Stevenson, Vice President, Client Loyalty, Charles Schwab

Many of us can appreciate the challenges of ensuring the customer experience at each touchpoint is building positive relationships. Treating those interactions as just ‘transactions’ erodes our ability to retain customers over time. Aaron & Troy demonstrated that “while relationship strength / loyalty is connected to touchpoint performance, it is rarely the sum of the touchpoints.”

It’s most effective to measure day-to-day interactions with satisfaction type questions to understand improvement opportunities in these areas. The longer-term effect on customer relationships is best measured using the ‘likelihood to recommend’ question. Sometimes we see much higher-level transactional scores in comparison, which creates confusion and too much focus on the numbers.

Aaron and Troy shared reasons why differences in interaction vs. relationship performance may arise and identified potential opportunities to close the gap. These include:

Don’t try to directly compare the score levels of the transactional and relationship measurements. Instead, understand how day-to-day interactions influence the relationship and apply resources to making those interactions promoter experiences.

Tom Kehler, Vice President and GM Community Solutions, Satmetrix

Stephen Blundell, Senior Manager Vendor Partner Relations, Intuit

Tom Kehler, VP and GM of Community Solutions at Satmetrix and Steve Blundell, Customer Advocate at Intuit, talked about improving NPS through online customer engagement. About one half of the audience said they had an online community initiative underway. Tom presented a strong case for ‘continuous customer engagement’, especially in B2C and B2SMB. For example he asked, “Do you have the ability to contact your Promoters in the next 24 hours?” Promoters can be activated to support other customers, help in a marketing campaign, defend or back a corporate position, etc. In support of this Tom referenced a recent HBR article written by the cofounder of Intuit, Scott Cook called “The Contribution Revolution”. He talked about the need to create a Return on Engagement through better products (the best innovators are users of the product), better marketing (get Promoters to help form the message), and better word of mouth (comes from a trusted relationship and starts with listening). The customer’s return is the ability to influence the company and product direction and to play a role in creating a better customer experience – for themselves.

Tom stressed that the primary goal in a customer engagement program is to demonstrate that you are listening. He then shared a case-study on the Intuit TurboTax Inner Circle program, a micro-site for customers to have conversations with Intuit. Tom walked through an innovative technology (Adaptive Conversation) for identifying the best ideas from a large customer group. He also explained how the system is able to build robust customer profiles that leads to better CRM and support a closed-loop process. When combined, these capabilities allow a company to demonstrate that they know their customers, know their needs and are able to actively help improve the customer experience.

Steve then showed how the ProSeries and TurboTax product teams were able to use the Satmetrix platform to engage customers in product improvement. Customers provide ideas in their own words, vote on statements provided by others and then rank ideas by importance. The process extracts ‘wisdom from the crowd’ by turning qualitative feedback into quantitative results. Intuit is able to take action on this data since it identifies what’s important to the most number of customers. Steve shared other best practices for listening to customers including a customer council where customers are asked how Intuit can improve its products and services. These customers spend two days at Intuit’s offices paid for by Intuit. Steve found that if they involve customers in the beginning of the development process then they get a better product in the end. He referred to the successful launch of a payroll product due to this method of customer engagement. In another example, he shared a situation where Intuit thought the customer priority was to have a faster, easier TurboTax experience. After using the Satmetrix Customer Engagement platform Intuit realized this not to be the case and instead, to their surprise, found that the #1 problem was with rebates. This caused a significant shift in focus that eventually led to the elimination of rebates.

Tom concluded by stating that engaged customers create measurable results including increased loyalty, WOM and repeat purchases.

Laura DeSoto, Experian; Dr. Laura Brooks, Satmetrix; Desirree Madison-Biggs, Symantec; Diana Dykstra, San Francisco Fire Credit Union

“The customer is always right.”

Wrong, according to this panel. That’s how our first session of conference day 2 began. Our panelists did not agree on all topics, but on this one they seemed united on the idea that a much better mantra would be “Do the right thing for the customer.”

Seems like a subtle distinction, but it’s not. As Diana Dykstra pointed out, you can certainly have customers with unreasonable demands. What matters is that the employee does the right thing for the customer.

The panel discussed several different topics, but I’ll highlight a few of the big ones here:

First: Break the shackles of corporate policies.

Desirree Madison-Biggs of Symantec talked about how Symantec had created a “Myth Busters” website to help employees let go of old policies and corporate myths about what was and was not acceptable. From my perspective, it’s sort of like cleaning up your desktop. When you are driving change into an organization, make sure you don’t just hit “delete” on the obsolete files, but also be sure to “empty trash” and then restart the computer.

Diana Dykstra agreed. Get rid of the policy book. Her policy for employees is to do the right thing for the customer. They have 4 core values: Creating Elationships; Be the Member; Done in One; and Listen, Learn, and Innovate.

Laura Brooks commented on how action oriented and descriptive those value statements are, and I wholeheartedly agree. Don’t underestimate the power of good, descriptive language…especially when they see leaders and other team members also living it out in their actions.

Second: Hire or Train for Customer Focus, but Do It

Hire or train? We had different opinions on that. Laura DeSoto of Experian rightfully pointed out that “you’d better hope you can train for it,” because most organizations already have a lot of great employees on board, and you want to leverage their knowledge and expertise. Diana Dykstra took the other angle. At her company, they hire for it. And she admitted that when they were changing the culture, a lot of employees who didn’t fit with the new values left over time…which allowed them to bring in new people who were more naturally inclined to customer-focused behavior.

Whatever your strategy, be sure to do it. You won’t get change if you don’t invest in different hiring practices, training, or both.

Third: Get Leadership Commitment

Employee behavior follows cues from company leadership, especially when you are trying to make change happen. An audience member asked, “What do you do if you don’t have leadership on board.” And Desirree Madison-Biggs summed it up nicely in her response: you’re hosed! I couldn’t have put it better than that. Companies try to dance around this topic, especially passionate customer experience advocates at mid-management level who really want to make Net Promoter work in their organization. But ultimately, long-term success is intimately tied to having your top management on board.

Desirree made the point that showing execs the economics of promoters and detractors can sometimes help to sway opinion. But ultimately, most executives either have a belief system that lends itself to believing in customer first, or they are likely to remain skeptics. Find the right exec to spearhead this.

Fourth: Tell Stories

All the panelists agreed that stories were an extremely effective way to drive home the importance of customer-focused behaviors, both to make change happen and to reinforce behavior and culture.

Laura DeSoto told a story about Experian’s CEO, Kerry Williams, who personally followed up with a disgruntled detractor. The purpose of his call was simply to confirm that the account manager had closed the loop already, but when the customer said “no,” the next call was a personal one to the account manager. What drives change faster…a couple of stories like that, or a corporate email memo advising account managers to close the loop with detractors? You get the point. Stories matter….a lot. As do actions from top management.

Desirree Madison-Biggs explained how Symantec uses peer awards to get the stories out there. Not necessarily for “grand” heroics, but for the day-to-day heroics that represent a regular rhythm of customer focus in the operations.

For Diana Dykstra, the employees at San Francisco Fire Credit Union evaluate great customer-focus stories, and how they fit with the organization’s core values. Moreover, their entire performance review process is based on the core values, which drives home the importance of these stories to the company’s culture.

Fifth: Compensate, At the Right Time

Laura Brooks closed the session with a hot topic of debate: should you link compensation to NPS or not? We got three very different answers…from “yes, I did it right away” to “it took us 6 years,” and one smack dab in the middle.

I was waiting for Laura Brooks to chime in and break the tie…but we ran out of time. What was obvious from the discussion, and what we teach in the Net Promoter Certification, is to make sure you have trustworthy data and buy-in before taking this big step. Tying compensation too early introduces a lot of risks, including gaming, an overly strong focus on “the score” instead of changing customer experience, and the potential for a major crash and burn if the underlying response rates and data quality are not representing the customers or segments who matter most to the business.

Walter Bettinger II - President and CEO Charles Schwab

Charles Schwab is a great example of a turn around story based on core vales and a belief in customers. For Charles Schwab Net Promoter® is the best way to measure that you are running your business on a core set of values.

Walt related that the bad business practices at Charles Schwab started with charging account fees to their customers. Because they were chasing bad profits they soon saw their Net Promoter score drop to -34%.

How did Charles Schwab turn the business around?
It began with a leadership change when Chuck rejoined the company.  From here the company defined core principles based on what they truly believed as a business and these principles were focused on the customer.

As they continued to change their business model, the company expanded who had authority to make decisions and empowered those leaders.
Walt did his own research as well.  One of his first actions was to call the last 100 clients  that left and the last 100 employees that left to learn the answers to the problems Charles Schwab faced.

Based on these findings they developed a strategy based on values they believed in. This resulted in the four core pillars for the company:

• Pricing values
• Client success
• Personalized relationship
• Help and guidance

Because customers were key and employees were now empowered at the front lines to ensure positive customer experiences, they held these principles as key to the process:

• Listening
• Simplicity
• Innovation
• Service
• Trusted relationships
• Value
• Honor
• People

With these changes in place Charles Schwab has seen large growth in its Net Promoter ® Scores. To ensure employees were putting the customer first, they took the additional steps of taking compensation based on Net Promoter Scores off the table and have in place a zero tolerance for gaming the process.  This ensures that the employee doesn’t do anything that isn’t in the customer’s best interest.

Brad Smith, President & CEO, Intuit

Brad Smith of Intuit gave us a preview of what a mature Net Promoter Discipline can look like in a company…and how it can be an underpinning of transformative work that is focused on delighting the customer. He opened by explaining that 81% of new sales for Intuit are attributable to Word of Mouth…so this isn’t just a nice to have. Having more promoters is central to their growth strategy. How did Intuit get to this point? It was clear from hearing Brad’s talk that he personally, and Intuit as a whole, had been using NPS and the core concepts of Net Promoter since the early days. He gave a compelling and concrete description of the phases of NPS adoption that they had passed through since starting with it in 2003. These phases may sound familiar to many companies who have been using Net Promoter: Phase 1: focused on the score. This is the ideas that most companies here about first…the Net Promoter Score. It’s obviously just a tiny part of what the concept is about, but it is the starting point for most companies who hear about Net Promoter. Phase 2: the verbatims. Brad pointed out that the next thing they did was dig into the verbatim comments. The big takeaway from this was that the customer experience was not just about the product. It was about the end-to-end experience for the customer. That’s the view from the outside in.

Phase 3: process mapping. Fix those detractors! That’s what happens next in nearly all companies. They see the feedback, and the squeaky wheels obviously need grease. In Intuit’s case, Brad described major investments they made to map out processes, improve them, and drive down the number of detractors. Nothing bad here, but it’s not the end of the story.

Phase 4: how to get more promoters. This is a big shift, and it requires a different mind set. Employees need to think about the things they can do to delight customers and generate more promoters. It’s usually hard for companies to focus on this until they have detractors under control. But it is crucial.

So, at this point, I would have thought the story was over. These are the four phases most companies talk to me about. But I think Brad appropriately added a fifth phase of adoption, which is critical to getting things right out of the gate (rather than going back to diagnose, fix, and improve)…

Phase 5: innovating with customers. Intuit focuses today on getting customers and employees to participate together in innovation. What’s interesting about this is not only the outcome you get in terms of the product and the customer experience, but also the fact that you can build more promoters by having them involved with your company in this process. They know they have a voice. It can also be a huge motivator for employees.

As a takeaway, Brad stressed three things to consider. The importance of leadership, the power of harnessing employee creativity, and the impact that co-innovation can have on word of mouth. Where is your company on this adoption path?

Click here to download the presentation.

Steven Bernstein, Solutions Consultant, Satmetrix

Steve began his session on improving your NPS in Service and Support by asking the packed room who was able to show ROI on their systems. Very few hands went up. Steve went on to explain how these departments can evolve from cost to profit-center status by focusing on the economic value created by an increase in loyalty. He shared a Satmetrix client example showing that a 3% increase in satisfaction led to a 1% increase in loyalty. By quantifying the value of loyalty, Support and Service can gain recognition as a revenue generator in the organization. Steve then shared best practices for increasing loyalty in the areas of 1) operationalizing feedback and 2) changing employee behaviors. On the first point, he shared another client example (Virgin) where key loyalty drivers first were identified based on learning from transaction feedback. In the example customers were satisfied with their purchase, but seemed to be disgruntled when they received their first bill. Virgin therefore believed they had a billing department problem. However, when they looked across the customer experience, rather than simply evaluating the transaction level feedback, it turned out that there wasn't a billing problem at all. The billing event was only a trigger for a broader problem -- it was the moment that the buyer realized a missed expectation from what they were sold. It ended up being a sales problem. Steve stressed the importance of understanding the entire customer journey to identify the right drivers to focus on.

Steve then talked about how to take action at three levels: front-line employees, management and executives. Front-line employees need to see the impact of their interactions and decisions on the customer experience. A great way to do this is by sharing areas for them to focus on, sharing supporting verbatim comments and being sure to celebrate success. Steve talked about the importance of communications from executives supporting the program and assigning internal champions. He also discussed how to enable action through a process that identifies which customers to engage, when they should be contacted, who is conducting the contact and what happens after the follow-up.

Steve ended his presentation on the subject of targets, especially as they relate to compensation. Steve emphasized the importance of score stability before creating a compensation program, aligning operational and structural goals, ensuring trustworthy data and the understanding the relevancy of NP impact at the right touch-points. In summary, Steve suggested reading the Satmetrix white paper "Can Support Drive Profitable Growth?"

Melissa Namiot-Mader, Director, Business Systems Analysis and Loyalty Programs, Veritude

John Abraham, General Manager, Net Promoter Programs, Satmetrix

Melissa Namiot-Mader and Satmetrix’ own John Abraham had a bit of a ‘fireside chat’ session about how Veritude has leveraged Net Promoter processes to double their NPS inside 6 months and all but leave their competitors in the dust. Vertitude decided to use the NPS for several reasons:

What got them to measurable improvement was a combination of a number of carefully thought out, consistent action-steps:

• Veritude’s CEO walks the floor and takes a high-touch/open-door approach to dealing with employees.
• They conduct surveys twice per year without fail
• They conduct Net Promoter workshops and weave Net Promoter concepts into employee meetings
• Net Promoter Scores are tied to compensation
• All new hires are introduced to Net Promoter
• All new executive officers are given a copy of “The Ultimate Question” and are debriefed on what role Net Promoter plays in the company
• Each of their sites is required to do an annual Net Promoter action plan based on the verbatim feedback from the previous year. Only until they have created their action plan are they given their NPS from the previous year and then the scores are published publicly.
• NPS questions have been randomly built into their online time recording software via a pop-up questionnaire. Employees answer questions like:
• • Have you heard from your staffing consultant recently?
  • Would you recommend this staffing consultant to a friend or colleague?

• They’ve also kept it light by creating personas for promoters (a cheerleader), detractors (a devil with horns and pitchfork) and passives (the “Pat” character from Saturday Night Live)

When I asked Namiot-Mader what she would recommend for Net Promoter newbies, she advised that those interested in Net Promoter should make sure the Net Promoter approach is a good fit for their company and industry. She also suggested getting an executive sponsor or advocate. But, most of all she stressed DOING something with the data you collect. She cautioned not to try to address all the weak points at once, but to instead break the list down into manageable chunks – business line by business line if need be. As someone who has earned her Net Promoter Certification, Namiot-Mader encouraged the session participants to opt for certification because it’s good to go through implementing Net Promoter concepts with a group of people who are in the same position as you and whom you can bounce ideas off. Veritude has been effectively using Net Promoter in closed-loop for the past 2 years, but have been keeping track of their scores for the past 3 years and the results speak for themselves:

• In 2007, their NPS doubled from 2006
• In 2008, they exceeded their goals by 13 points
• They have created a new standardized resume template and implemented a consistent resume submission process so that their customers are able to see the quality of their candidates
• They implemented a new internal communication plan
• And, more importantly, they were able to answer the tell-tale question: “What should we NOT be doing?”

NPS: the Transition from Survey to Discipline

Tammy Gallegos and Denise Wymore

“Companies don’t have values, people do.  What a company measures to manage their business shows what they truly value.”   Denise Wymore, a culture consultant who works with the credit union industry, provocatively began a lively overview of the ‘state of the credit union’, cultural trends, and economic times.   Tammy Gallegos, VP of Service Quality for America First Credit Union then shared how her organization is meeting the challenge head on.

Unlike the Baby Boomer generation whose values of consumerism and mantra of ‘spend more and get the best’, today’s Gen Y values echo those of the ‘Great Generation’;   the generation that came of age during the depression and triumphed during WWII:  patriotism, collaboration, and thrift.  This cultural trend and recent loss of confidence in banks in general have created an unprecedented opportunity for growth in an industry which garners only of 6% overall consumer banking.  But how can it be captured?

Fortunately, research was done several years ago by a consortium of credit unions that has positioned them to better understand what drives or inhibits loyalty in their members.   NPS was at the core of the research.  In a nutshell, what they learned was that a trip to the credit union was akin to a trip to the doctor’s office.  At best it needed to be done and at worst, it was just as painful.  Clearly steps need to be taken.

Enter America First Credit Union, represented by Tammy Gallegos, VP of Service Quality.  “It takes seven miles for a ship to turn around at sea and likewise, it’s taken many years to get to the point where NPS has been fully adopted.”   In other words, in a tradition-bound industry the journey can be a slog.  Their journey began in 2002 with their first measurement of satisfaction factors at the branch level.  From that feedback they began to implement changes.   Once those were in place, a Mystery Shopper program began enabling visibility into the impact of those changes.  What became apparent was that while these programs were effective, a forward looking approach was needed to round out the program.   Enter NPS.

To add the Net Promoter methodology to their bag of tools, management had to buy-in. Once they realized there was a solid approach, the buy-in was not difficult.  The ‘past, present, future’ theme resonated well and they had feedback from over 20,000 members to back up recommended changes.

To introduce and gain the engagement of all employees, theyrolled out mandatory training which:

• Enabled the sharing of experiences
• Provided a forum for learning from mistakes
• Goal setting
• Send and reinforce a consistent message
• Focusing on behaviors and not the score

Tammy cited several key changes that have increased member retention and improved teller accuracy:

• Professionalism (adherence to a professional code policy that had been ignored until management began to read the impact of sloppy dressing had on perceptions).
• Hours of operation are now standardized across all branches
• Meet and greet interactions – consistently treating members as guests

From the sound of things, the progress won’t stop there.  The team now has goals to increase NPS to 85% and to increase members during this economic downturn.  Detractors will all be reached out to and a strategy is being developed to move Passives to Promoters by continuing to up-level their service standards according to their core values.    With this continued focus on the customer, they may just be able to buck the decades of stagnant growth for their industry and provide great value for their members.

Ryan Magnon, Vice President Quality, The West Paces Hotel Group

When the founder of your hotel is a former Ritz Carlton executive and when you have a super-sized mission statement (“to be the global leader in the service business”), you’ve got some pretty big shoes to fill. And, it looks like the folks at West Paces are up for the challenge.

Magnon shared a story about switching into casual attire while visiting one of their properties and talking with a guest in the bar. As a veritable undercover customer loyalty agent, Magnon sidled up to a guest and asked matter-of-factly, “So, what do you think of this place?” As the conversation went on, the guest informed him that he would pay almost 30% more NOT to stay at another hotel. Of course, eventually, Magnon revealed who he was, but that’s the kind of dedication and focus needed to drive Net Promoter Scores through the coffered ceilings at their exclusive resorts.

All West Paces employees carry around a 25-point service cannon card to remind them of their commitment to Net Promoter-level service. (Magnon was kind enough to bring some of the cards to the conference as samples.)

West Paces has been innovative in their approach to Net Promoter. They have created a “learning lab” where the latest and greatest West Paces ideas are tested on a closed “road” before hitting reality highway.

Tony Hsieh, CEO, Zappos.com

Tony Hsieh has been speaking a lot lately at conferences. And when you hear the story of Zappos.com and it’s rise from $1.6 million in revenues in 2000 to $1 billion in revenues at the end of 2008, you can understand why people want to hear about it.

What was refreshing for me was the amazing level of openness that Tony conveyed in his talk. They are so confident that they are building a great company, that they are not afraid to open the kimono.

I introduced Tony by sharing two personal stories that point out the power of Word of Mouth for the Zappos.com brand. I’ve actually never bought anything from Zappos personally, but my house is full of empty Zappos boxes, as my wife is a big promoter of their selection and service. I also shared a photo that one of our Satmetrix employees gave to me from his first visit to their facility in Henderson, Nevada, outside Las Vegas. The company gives tours of the facility, and ends the tour with a nice surprise. I won’t spoil it for those of you who have yet to visit there. I may check it out next time I’m in Vegas.

The brand simply inspired storytelling, and Tony explained that this is not entirely by accident. They focus deeply on the company culture (which is all about being the very best at customer service). And as Tony said, if you get the culture right, all the other good stuff follows…including good Word of Mouth and high Net Promoter Scores. Their NPS as measured internally has been running between 80-90%...which is pretty remarkable. But the balance of the discussion made it clear that they do a lot of specific things differently to generate so many promoters.

Tony talked about how “everyone is a little bit weird.” I personally identified with this a lot. I’ve got my quirks, and most of the people I know and love do to. People who don’t have quirks, or who mask them, are honestly not that interesting to me. That’s a big part of what makes us real and human…and I think it’s a bit of secret sauce in how Zappos is connecting emotionally with their customers.

They embrace this “differentness” in everything they do.

First of all with employees. Employees are encouraged to be themselves. They spend a lot of time selecting the right employees, making sure their values are customer service oriented. Then they put them all (everyone) through the same 5 week hands-on training program. They even offer to pay employees a sort of “departure bonus” after the first week of training if they don’t believe Zappos.com is the place for them. Tony explained that these practices help to get really committed individuals who are wired to fit with the company’s service-oriented culture. And it also allows them to unleash that creative energy at every point of customer interaction (without lots of complex policies and procedures). Now that’s different!

Process was next. They obviously do have processes…but again they seem to think of it differently. For example, they call their customer service team the “customer loyalty team.” That’s the ultimate goal right? You may service an automobile, but with people your goal is to make them loyal. How to do this? Well, their support team doesn’t “upsell,” they don’t measure call time, and if they don’t have the product in stock, the members of the loyalty team are encouraged to check 3 competitor websites to help the customer get what they want. Different, right?

Marketing and branding is different too. I loved it when Tony said that they have their 800 number at the top of every web page on their site. This contrasts radically with companies who are thinking of customer service as a cost, and try to make it hard to figure out how to call in for service. As Tony put it, the telephone is the best marketing tool out there. You get your customer’s undivided attention for 5 or 10 minutes to make a connection with them, and to establish who you are and what your brand is all about. Different again!

He wrapped up by reinforcing the 4 core things that he thinks companies need to get right to have a successful strategy:

1. Vision: theirs is to deliver the best customer service. That’s it.
2. Repeat Customers (not advertising): This is a big connection to the Net Promoter philosophy. Tony explained that they were forced to focus on repeat customers early on because of the dot com bust, but it has turned into one of their core metrics. They have gone from 20% repeat customers in the first 12 months, to over 50% today.
3. Transparency: They are committed to being open and honest about who they are, and you can get a copy of the Zappos.com culture book (with messages from every employee), or connect directly with Tony online in blogs on twitter, you name it. They are committed to being open and honest.
4. Culture: Their culture is their brand, and so it is for every company. Tony believes they are just 2 sides of the same coin.

Well put, Tony. Thanks for an inspiring and different view of how a company can operate.

Use the link below to download the presentation from our Case Study Library:

http://www.netpromoter.com/netpromoter_community/docs/DOC-1041

(view case studies requires brief registration)

Walt Bettinger, President & CEO, Charles Schwab

Walt’s talk struck me as incredibly honest and inspiring. He was candid about the fact that Schwab had some major problems back in 2004 that forced them to make a major shift in management. He was also candid in admitting that companies don’t like to stand up and speak about their failures.

In this case, we got the benefit of hearing the story at the right point in time. Schwab HAS managed to make an amazing turnaround, and are in a position today that allows them to reflect back on what they were able to accomplish and share some great learnings and advice with us. Before Walt got started, he mentioned that he was proud to be running a financial institution that has NOT participated in TARP (the Troubled Assets Relief Program), and the crowd broke into spontaneous applause (yes, most of us in the room are taxpayers!). So I think he connected with our hearts (and our wallets) from the start. Let’s hear about how they set themselves up for the relatively strong position they are in today. The story starts in a familiar but not so friendly place for many companies, especially in the financial services industry. It was 2004, and they were plagued with major problems (especially in their retail division): bad profits in the form of nuisance fees, processes that made it hard for customers to deal with the same human being on multiple calls, tumbling net new assets (their key financial performance measure), and NPS of -34%. Chuck Schwab, founder of the company, stepped back in as CEO, and brought in a new management team (including Walt) from parts of the company that were performing better. And the changes began.

I noted in Walt’s bio that he started his career as an entrepreneur at the age of 22. And you could see that entrepreneurial style in the story he shared with us. He didn’t spend time focusing internally at first. Instead, he went straight to the customers and employees who had left Schwab in the previous 12 months, and talked to them himself. This listening process painted the picture he needed to reset the retail division’s strategy...not based on spreadsheets and new value propositions, but instead based on a set of values.

Walt went on to describe how he filtered these values into the new management team and the organization. Their core framework drew on two key pieces of work: the NPS framework, and Forrester’s work on customer benevolence. They coupled the closed loop feedback of Net Promoter with a LOT more direct customer interaction for all the retail division’s employees. In fact, today 9 out of 10 of their employees in the division deal directly with customers.

They also made a commitment to the idea that every customer matters. He told a compelling story of one customer who left Schwab, not because he himself was being charged lots of nuisance fees (the individual was affluent and receiving a different level of service), but the problem was that he noticed the companies policies at the time for entry level investors, and felt they were inconsistent with what he believed in. I wonder what that customer would have said about recommending to a friend or a colleague…

Over the course of the next 3-4 years, the retail business turned around its fortunes completely. As they changed their relationships with clients and invested in providing a lot more help and guidance (for free), those customers rewarded the company by staying with Schwab and referring friends and family members. Net Promoter Scores improved by 60 points, net transfers of assets quadrupled while competitors were mostly negative or flat, and the stock price more than doubled. Today, Schwab gets 55% of new retail clients from referrals.

Overall, this was an inspiring story with an amazing ending. It will be very interesting to see how all of this investment in culture and customer helps Schwab withstand the current turmoil of the financial markets. I think they are quite fortunate to have done this work over the past 4 years. So don’t  be surprised if Schwab continues to surprise us with great stuff.

Aman Verjee- CFO, eBay

Kellie Cobaugh - Senior Manager Loyalty Insights- eBay

Why Net Promoter® and what are the benefits?

When ebay first began looking at their customers they started with measuring customer satisfaction but the data was not actionable and not intuitive for the customer. Today, eBay is using the Net Promoter Score (NPS) which they see as pivotal to linking the customers, and their experience to financials. They believe future company growth will migrate from their traditional customer acquisition model to customer retention through a deepening of customer relationships.

As many of the sessions covered, eBay has found that having a cross functional team dedicated to driving the Net Promoter program and support from senior management has really made the program successful, and has help to get engagement from the whole organization. eBay also has spent a great deal of time looking at the economics of the program and from this developed the Net Promoter Economic (NPE) program

Using predictive modeling - these analytics let you predict the score someone would give you based on others like them. They look at core data like dollars spent each month, churn rate, etc. in each case Promoters had better numbers. In some cases while you may not see spend increase with top promoters, you may see churn reduce. The largest lifts come from moving Detractors towards Promoters, for eBay it means moving Detractors to Passive will bring the greatest results. The critical thing is to look at customers that are detracting and really focus on why

eBay’s Advice

• The NPE program - If I knew then what I know now
• Bring in NPE efforts as soon as you start an NPS program
• Be clean about how long it takes to get these programs really working
• Have a consistent data gathering process

The 2009 Net Promoter Conference is just 3 weeks away, and I wanted to highlight a couple of the sessions that were added during December.

With all the recent news of corporate restructuring and expense controls, many employees and managers feel pretty beaten up. These sessions provide a dose of good medicine for what ails us...they are about keeping your employees engaged and motivated in the task of delivering excellent customer experiences.

For those of you in the telecommunications sector, we are pleased to have Lindsay Notwell of Verizon Wireless joining us. Lindsay is responsible for NPS at Verizon, and when I discussed his session with him, he was passionate about the impact Net Promoter has had on their employees. He pointed out that when customers start to describe why they love a particular service rep, and that feedback actually makes it back to the employee, it has a huge motivational impact. I'm sure Lindsay will have many more suggestions to share about how they are making this work at Verizon.

Verizon has earned a reputation in its industry as a loyalty leader. Dr. Vince Nowinski will touch on Verizon's strong performance in his presentation about WOM economics. Vince and his team are completing a whitepaper that will be available soon on WOM in the cellular phone industry, to add to their recent publications on the same topic for computer hardware and credit cards.

Another session I'm looking forward to is the panel discussion on Day 2 on "Making a Habit of Customer-Focused Behaviors." Dr. Laura Brooks will host this discussion with three companies that are pushing the envelope in the area of cultural transformation. The companies are from different industries, but all are highlighted as case studies in Dr. Brook's new book with Richard Owen called Answering the Ultimate Question.

Laura will be joined by Aisling Hassell of Symantec, who has been using Net Promoter for several years now across a global organization with both B2B and B2C customer relationships. Symantec is now actively measuring employee NPS and using a broad range of engagement strategies with its employees and management team. We will also hear from Diana Dykstra of San Francisco Fire Credit Union, whose focus on service and culture change has earned them Net Promoter Scores in the 75%+ range. The panel is rounded out by Laura DeSoto of Experian, who delivered the opening keynote at our first Net Promoter Conference in New York back in January of 2007. Experian has used many innovative engagement and training strategies to improve the employees' "line of sight" to the customer in their daily work.

Finally, I should remind everyone that Fred Reichheld will answer questions from the audience on Day 1. If you are registered, watch for an email this week to submit your questions for Fred.