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.

How the Front Line Affects the Bottom Line

James Kasberg, Senior Manager, Progressive Companies

1 Billion Dollars in 30 days was not a new offering from Bernie Madhoff Investments, but rather it was the title of the presentation by Jim Kasberg of Progressive Insurance. In our second breakout session of our track on ‘Developing Customer Focus in Service Operations’, Jim Kasberg showed the audience what made the Progressive Companies true believers in customer delight.

We heard throughout the conference about the importance of the economics surrounding NPS. Jim explained the title of his presentation very simply. Customer retention is a primary goal at Progressive and keeping customers for just 30 additional days translates into 1 Billion dollars of additional value. That would certainly get my attention and apparently it has done the same for the CEO  of the Progressive Companies. As we have seen over and over, getting C-suite buy-in is one of the key success factors. The correlation between higher NPS scores and the 30-60-90 day retention rates were impressive. If 30 days was good, 90 days was even better and the higher the NPS score, the more likely the customer would be retained after 90 days.

Progressive asks the “Ultimate Question” to get a numerical score but then also asks an open ended question and uses the verbatim comments from the customers to create new or improved products as well as improving day to day operations. This helped with the employee buy-in as people feel more connected to their customers. Clearly they have driven a passion for their customers throughout the organization.

It was also clear from Jim’s presentation that Progressive has used extensive technology and sophisticated analytic systems to not only evaluate tons of data but to also be able to push the data in meaningful ways to each and every employee. This is an important connection point. People can see their scores and see the direct comments associated with the data. The data displays make it easy for everyone to slice and dice the information, ensure proper follow up etc. I had to cringe a little as I hoped that those in the room did not interpret the need for extensive technology as the only way to create good results from using NPS methodologies. I work with clients who do not have these resources and success is about the process and not the technology.

The key take-aways from this presentation for me were:

• The economics behind improving customer experience are huge.  NPS is an enabler.
• Happy customers are retained and represent a valued asset to Progessive
• People at all levels in the company are best when they can connect with the customer; NPS facilitates this connection very well.
• Customer oriented cultures are a wonderful thing!
  

Again, I think that we saw the concrete results of a positive customer focus and how NPS methodology can simply and dramatically improve your business results.

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.