Net Promoter Community: San Francisco Conference Blog 2012 : 2012 : February : 2

Rob Markey of Bain & Company discusses Loyalty and Growth

Posted by aisling Feb 2, 2012

Rob started by asking the audience whether their companies have world class NPS scores…better than Apple? The reality is that there is a lot of noise around NPS with executives demanding scores or asking how to treat NPS.

There are 4 ways to help leaders understand NPS...Take them back to first principles, work out the loyalty economics for your business, link NPS to growth and take action. Most companies aspire to grow and promise that to shareholders, sometimes up to twice the market in revenue and 4 times the market in profitability. But Bain’s research shows that less than 10% achieve profitable, sustainable growth over 10 years. Those companies in the 10% tend to be loyalty leaders. About 80% of execs think they deliver a superior experience, but only 8% of their customers agree. This delivery gap is what a lot of the Net Promoter work is focused on closing.

Rob reminded us how promoters drive growth and lower cost. You need to quantify the value or cost of your promoters and detractors for your business.

There are two lenses for NPS...Top down and Bottom up. Top down is more an anonymous view of the marketplace and competition. Whereas bottom up is from measuring the experience your actual customers are having with your brand. The scores can be different, and some companies like Philips are using top-down NPS to set business goals for each business unit. This can allow for an apples- to-apples comparison with competitors. Some tricks to help top-down NPS are to define the relevant competitive set, decide how deep to go, develop organizational involvement and link it to growth. As part of the analysis of the data it is important to compare your results against your competitors to understand the relative gaps. Bain has redone its original analysis that linked NPS to organic growth.It is based on 135 companies and over 225,000 customer responses. The data showed that loyalty leaders outgrow competitors by over 2X. The linkage between NPS and growth is stronger where there is real choice, a mature industry, low switching costs and revenue driven by customer decisions.

In summary, to be successful in building a Net Promoter system, you need to have a reliable outcome metric, have a closed loop feedback system and a strategic priority to earn loyalty.

803 Views 1 Comments Permalink Tags: promoter, markey, net, bain, sfo2012

Tom Feeney of Safelite AutoGlass discusses NPS

Posted by aisling Feb 2, 2012

Tom is a 24-year veteran of Safelite, and is still as excited today as when he joined. Tom shared several customer letters with us which showed how Safelite employees go above and beyond for customers. NPS has been the catalyst for a cultural transformation at Safelite in the journey to being a customer-centric company. Safelite is 65 years old and serves 5 million customers a year in the US, with 10,000 employees. In 2007 the company was acquired and Tom was made CEO in 2008. That was a very tough year..,sales and profits plummeted. That caused some internal review and they realized there were a number of things that the company was not doing well. They had a customer service index of 98.7%, but they realized that the score was masking the reality of what their service delivery was like. Autoglass is a low need, low involvement, low awareness industry. The #1 brand in the industry is “I don’t know”. Awareness of the Safelite brand was less than 5%. It is also a *negative* service category…no-one really wants the service…like funeral parlors, and root-canal dentists! Also, there was little differentiation with Safelite competitors. The management team decided they had to change and become the *natural choice* for autoglass repair in the US. This would allow them to quadruple their business. They used a few key strategies...build the brand, create the customer experience, and getting employees on board. They also started advertising…which also helped educate employees about what was expected of them.

Their journey was to move from satisfaction to delight...through changing perspective and behavior, changing the DNA (processes and systems), and changing the rules of the game (innovation). They had to rally the team. They chose the Net Promoter Score and embedded it into the culture. They talked about customer “delight” with associates. Their vision was based on two pillars...People First and Customer Delight. People First has leadership, focus, talent and caring as the four cornerstones. These were based on 6 core competencies that defined the *how*. Live our values, Think People First, Have Passion for creating Customer Delight, Understand the business, Be innovative, and Drive for extraordinary results. They gave customer service reps and technicians specific, 5-pointer sheets (B’s and T’s) to help them know how to deliver service. They used a pocket of excellence in Orlando to serve as an example to other areas and act as peer-to-peer training. They also used Boot Camps—>Boost Camps—>Boot Camps. Being invited to the second boot camp is not a good thing! The other most important tool is measurement and communication….it is not just communicating to leadership, but down to the *atomic* level (technicians and CSR’s), unfiltered and in a timely way. They took a look at their service recovery and found they had a post recovery NPS of 19%! The survey data pointed to key areas of improvement, which they acted quickly upon. They improved the score to 60%...the challenge is that they have not been able to get to 100%...the key lesson is that you can’t make promoters always from service recovery...you have to focus on getting it right the first time.

Tom says recognition is key to these transformative programs. This includes compensation aligned with the behaviors you want from associates.

Over the period from 2007, the company’s NPS has grown from 73% to 85%. Over the same period, sales has grown 78% (mostly organic) and profit has grown 114%. Engagement scores have also grown.

Safelite is now on the second phase of its transformation. Tom shared a grid showing how they are thinking of the future…Disciplines of Operational Excellence, Product Leadership, and Customer Service. The Values are Shareholders, Associates, and Customers. In the past Safelite has focused on Operational Excellence and Shareholders. They want to move to a company that focuses on Customer Service and Associates. It will be a lot of work, but Tom is optimistic. We look forward to hearing more on this next year!

1582 Views 1 Comments Permalink Tags: safelite, feeney, customer, experience, sfo2012, autoglass

Stephanie Comfort of CenturyLink discusses a customer-focused brand

Posted by aisling Feb 2, 2012

CenturyLink is a great example of a small rural provider growing into a major national brand. CenturyLink is the result of the combination of four companies…CenturyTel, Savvis, Embarq, and Qwest. The telco industry has changed radically over a very short period of time. Wireless and cable have steadily encroached on the core line business. Broadband is also highly penetrated, so low growth. With these competitive pressures, CenturyL ink started thinking of what their vision was going to be. They explored three ways to achieve their vision by looking at the Treacy model of Product Leadership, Customer Intimacy, and Operational Excellence. They netted out that customer intimacy was core to them. As a result, customer experience (CX) was determined to be central to sustainable revenue growth. They defined CX as including “perceptions of the brand and its promise, its relevance to users, and behaviors that deliver the promise”. They determined that the most important loyalty drivers were customer experience and trust.

Overall the communications industry has poor Net Promoter Scores on average...negative actually! CenturyLink actually viewed this as an opportunity. They started to use NPS insights as a means to determine how to both improve their service delivery and also how they innovate. They wanted to drive action from the data...so they did a lot of work to define segmentation, drivers, principles and the customer journey. The goal was to reorient the company around the customer in a fact-based way. By connecting business problems with the customer insights, they found they discovered some great opportunities. One was around small business, where the problem was a low share of wallet (25%). The customer data showed that small businesses were struggling with IT complexity. As a result the business owner tackled the problem in a completely different way with a new product comprising one core bundle. Another example was the customer bill—where the business problem was high call volume around billing questions, and customer insight showed customer confusion over the bill.

CenturyLink is on a migration to superior customer experience that is differentiated by market segment. They measure NPS across the entire customer lifecycle at key touchpoints. Stephanie feels the lessons learned from their customer journey are that 1) strong leadership commitment is needed 2) there needs to be operational focus 3) there needs to be a link to business outcomes 4) CX needs to be central to strategy and 5) the company needs to be willing to take action.

In summary, it takes a singular focus to align a complex organization, but NPS can be a valuable tool to accomplish this.

607 Views 0 Comments Permalink Tags: comfort, brand, sfo2012, centurylink, experience, customer, telecommunications

Richard Owen of Satmetrix discusses Net Promoter in the Social Era

Posted by aisling Feb 2, 2012

Richard took us through a history of Net Promoter. Net Promoter was a revolution when it appeared. It took off because it was a metric that mattered and was tied to financials. More than a metric, it was an action-oriented philosophy…going beyond historical measurement techniques. It was a tool that engaged employees and got them excited. We sometimes forget it was also a great tool for getting insights about the business…when we mined the data from detractors and promoters. We got all this from Net Promoter, and it was a great success.

But there were lots of changes--the technology wave started to happen…mass usage of email, huge quantities of data, cloud became a buzzword, CRM came of age, and closed loop processes were implemented on a massive scale. Management started holding employees accountable for customer experience. But 10 years is a long time, and a lot has changed. We are in an interesting age today...

LinkedIn, Facebook, Twitter, YouTube, etc all scale massively every 60 seconds. But customers in this social environment have a different attitude…they have a manifesto. They want a say, they want to connect with others, they want to communicate openly with you, and they want to do business with ethical companies. Customers are online and mobile...mobile social networking penetration is around 20-35% globally. The power of customer input has grown and is more immediate due to tweeting. The influencers have also changed…they are now people who are followed vs just *rich*. There is also an age divide...youth are uber-connected. There is a rich-poor divide. Now customers shop around and have a higher tendency to switch. Cultural norms are all out of order also. 50% of CRM projects fail. Still only 4% internet commerce. 50% Facebook customers less likely to buy if businesses don’t respond on their Facebook page. So, major disconnect...customers with demands and companies struggling to keep up. There are also lots of ethical problems—example of Tripadvisor with the fixing of ratings, so cannot claim to be independent any more. Now companies need to move to move to a *participation* model of 2-way communication. Social media can be a mechanism for sharing value. There has to be 2 significant mindshifts...NPS has to be faster, in a mobile world. We need to reorient ourselves. We have historically built our internal NPS processes with a Ptolemaic view...the company is driving the agenda and is at the center of all the engagement. But customers want to be the center of the universe...companies need to revolve around customers.

Companies are not in control...just like a Fisher Price steering wheel. We need to put customers in the driving seat. Activated promoters will mean we will look at who is actually promoting. These promoters are now an incredible asset...they bring higher lifetime value and more profitable customers. We are going to have to listen to customers when and how they want. We won’t be just concerned about detractors, we need to mobilize promoters. We need to move from structured data to a universe of vast, crazy unstructured data. Structured data must live with the unstructured. Think of structured as the backbone and unstructured as the flesh around the backbone. There has been a lot of work done over the past year figuring out how to link standard NPS with social NPS. Richard thinks this is the best of times for CX professionals. We should be giddy with excitement...there will be a wave of innovation around the field of customer loyalty. We need to all get on board with Net Promoter 2.0!