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.

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.

Richard Owen - CEO Satmetrix Co-author of Answering the Ultimate Question

Richard started us off with a view on the economy and what are the most important steps companies can take during this slow down.  I think Richard asked a good question, “Is flat the new up?” But really, the most important thing companies can focus on is their customers.

Key things companies should look at:

1. Are you focused on customer retention which is a lot easier and more cost effective then custom acquisition
2. Are companies making the right cuts, rather than cuts that will hurt customer loyalty long term
3. Do you understand the economic value of Word of Mouth (WOM) or your promoters for your business.

Let’s Look at Advertising vs. Word of Mouth: Today Can advertising really be effective for long term growth? Companies can’t advertise their way out of trouble they have to focus on the customer’s experience. You can see this hold true when you look at the US auto industry and companies like Sprint both of which spend large advertising dollars but it has not resulted in increased sales. Today, the best customer service is now online retail where companies who invest in the customer experience, not advertising, are leading the way.  For example look at companies  like Overstock, Amazon, and Zappos.Deploying a Successful Net Promoter® Strategy: One theme that is consistent among the leading companies is that Net Promoter is really about a holistic approach that is part of the entire organization, not just the score. To truly be successful implementing a Net Promoter discipline requires change across the organization. Based on our findings, companies that are able to implement change management will be successful with their Net Promoter programs. Companies need to move away from business processes that do not work for them and learn how to create a radical shift in the organization.

Click here to download the presentation.

Vince Nowinski - Net Promoter Economics - Teleco/Wireless Industry

We know that loyal customers repurchase, buy more, refer, and give constructive feedback.
Still many companies struggle to determine the value of customer loyalty.

What is the power of word of mouth (WOM) and what does that mean for your business?

Word of Mouth is accelerating across industries making the dynamics of WOM even more important. Studies have shown that word of mouth is 9X more trustworthy and that 60% of customers trust the info they get from on-line reviews.

WOM is not just an extension of your advertising program. There needs to be something compelling for people to share or you can’t get them talking about it.

Like with anything the more positive the experience the more likely that the WOM would be positive and that negative experiences will result in negative WOM.

If the customer experience aligns with the message in the marketing then there is a synergy that can drive WOM. But traditional market methods do not tend to impact WOM. So companies should be looking at the natural way to apply WOM.

• For more details on the specific methodology please download this whitepaper Exploring the Relationship Between Net Promoter and Word of Mouth in the Wirless Industry

Click here to download the presentation.

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)