San Francisco Conference Blog 2009

Lasting Impressions from the San Francisco Net Promoter Conference

info@netpromoter.com — Tue, 27 Jan 2009 23:30:19 GMT

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.

Driving Product Innovation at Logitech Using Net Promoter

info@netpromoter.com — Tue, 27 Jan 2009 23:30:18 GMT

David Henry, Chief Marketing and Customer Experience Officer; Rory Dooley, General Manager, Control Devices; Glenn Rogers, Director of Customer Experience; Moderated by Fred Reichheld, Author, The Ultimate Question

Logitech closed the day and the conference with an excellent discussion of using NPS in product innovation.

CMO David Henry introduced the company and their customer experience approach to us. This is a company with strong (very strong) roots in both product development and interaction design. David summed it up for me when he said, “we are focused on the interaction between the technical platform on the one hand and the human being.”

They are using NPS as a key measure to understand how they are doing with us humans that use their products. And it seems to be working pretty well so far, 18 months into their journey.

They started by creating a new approach and organization within the company…putting together under one group the following functions: marketing, quality, customer support, and (a new one) customer experience. The common denominator is the customer, and NPS is the metric that helps them know how they are doing with each new product release.

As David described the Customer Experience (CX) vision, I jotted down a few words on a scribble sheet…

…attitude…promoters…love…share…long-term relationship

For a company focused on making great product, they certainly seem to know what emotions they want to engender from their product users. But how do they plan to get there?

One very practical, and meaningful, process change stood out. They have introduced a new step in their product development and release process, called “Gate X”. Gate X happens when the product is basically done, but not yet approved for mass production. And they couple Gate X with final consumer acceptance testing. They ask consumers for feedback using the recommend question and have threshold Net Promoter Scores as part of this signoff process.

What’s a good score in the Logitech world? They would like to see all products one day scoring in the range of 75% NPS. But the relative scores also tell them something. They showed for major product categories and explained that the products ranked #1 by NPS in each category were also #1 in revenue for each category.

David told the story of their first product that didn’t pass. It was a multi-million dollar delay to get it right, but the entire panel was in agreement that the additional investment was worth the delay. And, perhaps more important, it sent a signal to the organization that customer experience was truly important, and management was prepared to act on it in major decisions like this.

It was clear to me as we went through the discussion that customer feedback was not the only source of innovation. The company’s engineers and product teams also play a critical role. Rory Dooley, who runs the Control Devices group, elaborated on the importance of using the customer feedback to overcome strong, often differing, internal perspectives. That’s the best of both worlds from my perspective…leveraging your internal creativity and ingenuity, with the voice of the customer front and center to focus the discussion.

The good news is that most of their products pass Gate X and hit the mark with consumers. But I don’t think these guys are ready to rest on their laurels.

Footnote: I’d like to personally thank our audience member who requested free giveaways of Logitech products on the Oprah show. Feel free to write in to Oprah and suggest she have Logitech on the show to talk about their cool stuff and NPS. My personal vote goes for the illuminated keyboard (cool idea, I work late all the time!). While you’re at it, let’s ask Oprah if she uses Logitech webcams for her Skype interviews? Maybe the eBay folks in attendance (thank you eBay for your involvement!) can get us an in there!

That’s my final post for the conference. I learned more than ever this year, and want to thank Logitech and all the great speakers for being part of it.

B2B and NPS: A Match Made in Heaven

info@netpromoter.com — Tue, 27 Jan 2009 23:04:38 GMT

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.

Where Are You On Your Journey?

info@netpromoter.com — Tue, 27 Jan 2009 22:36:33 GMT

The Five Levels of Customer Experience Maturity

Bruce Temkin, Vice President & Principal Analyst, Forrester Research

Where are you on your customer experience journey? Do you believe it’s a journey or a destination?

….definitely NOT a destination. But, you can make progress along your journey to a point where customer centricity is “embedded” in your culture.

Bruce began with a great story of how ‘build it and they will come’ does NOT work! Implosions will result!! The right customer experience is attained from direct customer input and engagement with your company.

I was fascinated by Bruce’s research showing that while nearly 90% of companies responded that customer experience is ‘very important’ to ‘critical’, far fewer actually have a clear strategy or commitment to improve it. And more than 1/3rd of respondents haven’t even started on the journey.

Where is your company on the customer experience journey?

Bruce took us through the five critical stages:

In additional research to be published in 2009, Bruce also found a high correlation between customer experience and likelihood to recommend across many industries. But, the reality of the experience in most industries is far below creating promoters. Why? Companies focus “inside-out” instead of “outside-in”. The trend has to be reversed!

Ok, so how can companies reverse the trend? ….. “Experience Based Differentiation”.

Bruce shared the three principles of “experience based differentiation” that allow us to “Interact with target customers in a manner that consistently builds loyalty”.

Key principles:

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

Maturity along the customer experience journey takes HARD WORK and it takes time! No quick fix can be sustainable!

When will you get started?

Join in the conversation on Bruce’s customer experience blog!

Stop Training Your Employees…

info@netpromoter.com — Tue, 27 Jan 2009 22:30:17 GMT

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:

Humor
Empathy
Reduction of client effort
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.

1 Billion Dollars in 30 Days

info@netpromoter.com — Tue, 27 Jan 2009 21:38:23 GMT

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.

Improving Your NPS in B2B Relationships 2

info@netpromoter.com — Tue, 27 Jan 2009 21:30:23 GMT

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

It’s about relationships, not surveys (engage customers in a partnership)
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)
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.

Customer Love in Tough Economic Times

info@netpromoter.com — Tue, 27 Jan 2009 21:30:21 GMT

Jeanne Bliss, Author and President of Customer Bliss

A tough economy like the current one we’re experiencing brings lots of stresses on customer relationships. We can all relate to our own stresses as consumers, which, honestly, are tough to ‘leave at home’. We also know well the stresses of our professional responsibilities to increase profitability when revenue is down. In an engaging participant Q&A and discussion, Jeanne Bliss shared strategies for making sure our customers feel less of the stress and more LOVE. Why is this so important? When the economy begins to recover, customers will remember those companies that brought creative solutions to help them survive the downturn. Here are some of the ideas Jeanne discussed: 1. Love your front-line employees…..they have the greatest opportunity to influence customer relationships every day. Empower them to take care of customers as they feel is appropriate given the situation. Host roundtables with cross-functional teams and leaders that give front-line employees a chance to share their frustrations and allow other departments to hear what the customer is experiencing. 2. Listen and empathize – Given the challenges during these times, customers may spend more time than usual telling you about their concerns and frustrations. Listen, repeat what you heard and empathize. Then, don’t just let that information go in one ear and out the other, DO SOMETHING ABOUT IT! What can you do to help weaken some of those concerns? Encouraging even small heroic acts of kindness can make a difference.

3. Love your best customers – Proactively reach out to customers before they call you. Make sure you understand each others’ challenges and how your resource alignment might change. Proactively offer solutions that can help your customers bridge through a tough time. Be creative…. Think of the things you can do to better serve customers that don’t cost anything. You’ll be surprised how many ideas you come up with.

4. Demonstrate the value of “Customer Love” to your leadership - Partner with the VP of Sales / CMO / CFO to understand how ‘customer love’ influences the movement of your customer base and the increased value in revenue and profitability that can be realized.

You’ll want to visit www.customerbliss.com and pick up Jeanne’s books to learn more.

Remember, so many ways that you can ‘love your customers’ cost nothing or very little. CUSTOMERS WILL REMEMBER AND REWARD YOU! I dare you to try it and see!!

Turning Transactions and Interactions Into Personal Relationships

info@netpromoter.com — Tue, 27 Jan 2009 19:15:47 GMT

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:

Potential reasons for gaps	Potential opportunities to close the gaps
Not surveying the most critical touchpoints	Ensure you are truly measuring at the ‘moments of truth’
Front-line staff do a great job delighting customers	Shift focus to identifying the other broken parts of the value proposition
Not enough substantive, wow-creating interactions are happening	Find more opportunities for substantive interactions; get creative

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.

The 80% You Almost Forgot: Relationship Follow-up with Executive Buyers

info@netpromoter.com — Tue, 27 Jan 2009 19:15:45 GMT

Joseph Schlosser, Partner, PricewaterhouseCoopers

There is certainly a difference between B2C and B2B, but even within B2B there is a wide diversity among companies, as well as within one B2B company. Despite this, however, some challenges transcend where you are in your company, or where you are in your program.

At PricewaterhouseCoopers, the context around the survey is the emphasis. We speak of the "PwC experience" -- can we create an experience that will differentiate us from our competitors. We know that all the companies in the Big 4 have technical expertise, a client-focused culture, and a global reach, so the question remains "Can the way we deliver the experience and build on our relationships differentiate us?"

PwC has a top-down commitment to deliver this unique client experience -- not just from our leadership, but down through every member of our staff. We emphasize our Behaviors: listening, providing value (not just to their company, but to their executives and staff), understanding their concerns, creating trusting relationships. Very often we have to have difficult relationships about complex subjects, and we have those conversations in a trusting way, recognizing and respecting our clients' point of view.

NPS is one way to measure how we are doing.

How do we train how to have these interactions?
We formalize the process. On an annual basis, we communicate the value proposition, we solicit feedback, and we communicate the value delivered. The feedback portion is 20% of the process, and the survey is 20% of the feedback. The survey consists of 3 questions, and there are 2 versions based on the services we provide to the client. We survey Fortune 1000 companies and we require 8 roles be surveyed in our audit clients; in our other clients, key executives and decision makers are the majority of the individuals surveyed.

Our Senior Relationship Partner program involves a senior partner in the Firm -- one who is not involved in the service delivery to the client, visiting the client at least once annually to assess the health of the relationship with the Firm. The visit is typically conducted after the survey has been completed.

The unique challenges of operating in a B2B professional services environment:

survey fatigue
survey is perceived as a B2C tool
small sample of surveys, approximately 50% response rate -- using NPS at the client-level hinders true analysis because one respondent can have a huge impact (and skew) the NPS score
one executive can have enormous (multi-million dollar) decision-making effect; therefore, we must reach these key executives, even if it isn't through the survey

Response Rates are critical.

firm level survey communications
account level survey communications
non-respondents = "silence is deadly"; these individuals may have significant decision making capability

Early Results

We have completed two years of surveys, and we show an improvement in NPS scores. We attribute this to:

follow-up with detractors
reaching out to non-respondents
one more year has passed following difficult legislation
improved consistency; the same issues that "wow" our clients are the ones that dissatisfy other clients. When we execute well, it has a significant impact on the relationship (and the scores).

While it is not about the score….

we do not use NPS for individual performance metrics
we do use NPS for firm level performance metrics

Questions:

1. Who follows up with the non-respondents?
The Senior Relationship Partner, the Global Engagement Partner (directly related to the service being provided), or a member of the client team.

2. Do you account for cultural bias?
We only survey in the United States. Firmwide we have other groups like ours in different global territories.

3. What about competition? Do you benchmark?
Statistically, there is not much difference. There does not appear to be much differentiation between the four firms.

4. Where is the Client Experience Team located within PwC?
Senior Leadership drove this from its inception. We work across all leadership.

5. Is the survey electronic or print?
The survey is delivered through an email, as a link to a website.

6. How often do you survey?
Each client is typically surveyed annually, although we administer the survey quarterly, to balance the workload. Our heaviest surveys are at the end of our fiscal year (the first half of the calendar year), which follows the year-end of the majority of our clients.

7. Do you offer incentives [to complete the survey]?
No. We are prevented because of being in a regulated business from providing incentives.

8. How do you recognize those who are closing the loop?
We track the follow-up activities by Partner, and this is incorporated into their annual review.

Improving your NPS Through Online Customer Engagement

info@netpromoter.com — Tue, 27 Jan 2009 19:15:06 GMT

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.

Join the Conversation – Earning Trust and Credibility in a Rapidly Changing World Through the Power of Community, Dialogue and Partnership

info@netpromoter.com — Tue, 27 Jan 2009 18:00:13 GMT

Joseph Jaffee, Author, Join the Conversation and Life After the 30-Second Spot

Joseph Jaffee has opinions. And you can’t help but get engaged by the bold statements he makes.

Our second keynote for the morning shook up the room, and I understood why my colleague, Deborah Eastman, had recommended him so highly as a speaker for the conference. I also understood why he uses the job title, “Chief Interruptor.” You can’t get change without shocking the system. Hard.

I had started the day by asking everyone what functional area they worked in. I’d say about 20% of the room were from marketing, and Joseph asked them to throw out much of what they had learned about marketing in business school. Gone are the 4 P’s of Product, Price, Placement, and Promotion. Instead, he offered a different framework that more accurately reflects the two-way dialogue between “the people” who work at companies, and “the people” that buy their products and services And yes, it is all about REAL people, not just marketing messages and ad campaigns. But it’s also about how people express themselves in the digital and virtual world online. And he challenged us all to strip away the corporate persona, and join the conversation with our customers…one on one. What about Net Promoter? Joseph shared several points that tied his approach to the core concepts of Net Promoter: "You have to LISTEN and HEAR long enough to be INVITED IN to HELP the customer," he said. Combine that statement with the idea of REAL PEOPLE communicating with REAL PEOPLE…and you have some key elements of the Net Promoter discipline…like closing the loop with customers after they provide you with feedback, and striving to get more promoters in your business so they will share your message with others honestly and organically.

My final big takeaway from Joseph’s talk was that you can’t control the conversation. You can only participate in it and contribute to it, as honestly and openly as possible. Companies that try to control the message will either render it stale, or turn the judgment against them.

Having described every marketer’s worst fears in full video and graphic detail (including the infamous Comcast Technician video, and Dell Hell website), Joseph ended with some glimmers of hope. Both Comcast and Dell have come around, and are effectively responding to the feedback leveled against them by disgruntled consumers. And companies like Panasonic are reaching out to influential bloggers to involve them in the innovation process.

Being that open may not be easy, but who ever said running a business was easy.

Thanks, Joseph, for interrupting us for an hour or so today! I’ll look forward to hearing what our audience thought on Episode 122 of your podcast series at Jaffejuice.

Panel: Making a Habit of Customer-Focused Behaviors

info@netpromoter.com — Tue, 27 Jan 2009 17:06:51 GMT

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.

How Zappos.com is Transforming Online Shopping by Creating a Culture Powered by Service

info@netpromoter.com — Tue, 27 Jan 2009 07:18:01 GMT

Tony Hsieh - CEO Zappos.com

Building a Brand that Matters

How many people have bought from Zappos? That’s a good question. According to the Net Promoter® Conference audience, a lot.

And the reason is because Zappos is focused on providing the best customer service and creating the most loyal customers. It is a mantra that is the corner stone of its corporate culture.

Word of Mouth is Key

This is a business based on customer focus, creating repeat customers and driving Word of Mouth. They tried a large advertising campaign once but found they saw little rewards. Now the company takes the money that it would have been spent on advertising and puts it back into the customer experience.

Where a lot of companies are trying to lessen the amount of contact/calls from customers, Zappos wants to speak to the customers. They take about 5000 calls a day plus live chat, twitter, and emails. They want to create a complete word of mouth experience. One thing they’ve noticed is that when they do a random survey their Net Promoter Score (NPS) is 83, but when they do the survey via phone their score raises to NPS 90. So Zappos is going to keep speaking with its customers as much as possible with the goal to build long term customer relationships.

To this end, everyone in the company goes through the same training as customer service, plus 2 weeks on the phone and training on twitter. Zappos believes that if the company is going to focus on customer service then everyone needs to be focused on customer service. Culture fit is key to the organization and every employee needs to believe in the core values.

Four things to building long term brand:

Vision- chase the vision not the money. Their vision be about the very best customer service.
Repeat customers- choose and focus on great product and great service
Transparency - Be real and you have nothing to fear
Culture - Committable core values:

10. Be humble
    9. Be passionate
    8. Do more with less
    7. Build a positive team and family spirit
    6. Build open and honest relationship with commendations
    5. Pursue growth and learning
    4. Be adventurous, creative, and open minded
    3. Create fun and a little weirdness
    2. Embrace and drive change
    1. Deliver WOM through service

Zappos is owning the 3C - Clothing, Customer Service, and Culture and Zappos is all about delivering happiness to the customers and its employees.

Reviving Customer Relationships and Growth by Focusing on Loyalty

info@netpromoter.com — Tue, 27 Jan 2009 06:05:01 GMT

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.