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Fred Reichheld's Blog

2 Posts tagged with the travel tag

During the recent London NPS Conference, a number of companies reported creative methods of delivering “Wow!” experiences to customers in an economically responsible fashion.

 

David Speakman of Travel Counsellors, for instance, described the “Golden Habits” that his most effective agents employ—inexpensive but thoughtful acts of kindness such as thank-you notes and welcome-home phone calls. By building these frugal wows into its IT systems, the company makes it easy for all of its counsellors to remember and implement the practices. Where a typical travel agent touches a customer several times each year, the Golden Habits help Travel Counsellors’ agents touch their customers far more frequently, and in ways that bring delight.

 

Rackspace does some similar things. One Racker described the company’s practice of sending a mini-Racker T-shirt to customers who are welcoming a new baby into the family. Another Racker said that, when a customer is pulling an all-nighter, someone from Rackspace will call a local restaurant and have a pizza delivered, so that the night is a little less arduous.

 

Listening to these creative ideas for wowing customers, I got to thinking about my daughter Jenny’s recent experience when she moved to a new city. We had long been loyal Lexus customers, and I advised her to stop into the local Lexus dealer whenever she had problems with her car. It turned out that the first problem she faced was the transfer of license plates. One of the screws that our own Lexus dealer had used to attach the old Massachusetts plate would not budge.

 

The new dealer told her that fixing it would be no problem, but that the cost would be $200. Jenny gave me a call because she was astonished—think negative wow—by the price. I agreed that it seemed outrageous, and advised her to grab her new plates and get out of there. She then drove to the corner garage that her new roommate had recommended. When the mechanic saw the situation, he assured her that there was a simple fix. He drilled out the old screw and had the new plates installed in a matter of minutes. When she offered to pay him, he refused to accept any money. He told her that he just wanted to welcome her to the neighborhood.

 

She was so pleasantly surprised that she has told this story dozens of times to friends and neighbors.  And you can imagine how much of her business—and how much of her friends’ and neighbors’ business—will be going to that garage compared to the Lexus dealership. In fact, after buying six Lexus autos in a row over the past decade, we recently defected to Audi. That distant bad experience may have been the last straw for us.

 

Anyway, back to my daughter. By investing just a few moments with her, that mechanic created a memorable and welcoming wow experience. And he built the foundation for a long and profitable relationship.

 

The question that I hope more business leaders will be pondering is this: How can we ensure that front-line employees are constantly looking for innovative ways to wow customers without spending too much money? When they do that, it energizes a company’s growth. Frugal wows are not only highly profitable, they are also inspirational, for customers and employees alike.

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Excited About London

Posted by FredReichheld May 19, 2009

Yes, I am excited about the upcoming Net Promoter Conference in London, and I will tell you why.

 

Sure, it’s partly the gardens. During that first week of June, British gardens are breathtaking. The horticultural world is preened to perfection for the late May Chelsea Flower Show—and by early June the crowds have diminished and we can stroll through those incomparably beautiful garden spaces in relative solitude. Those Brits really know how to make things grow. (The secret, they say, is not just the wet weather; it is the voluminous quantities of manure they bury in the soil!)

 

Oh, and the other reason for my excitement—at each of the previous London NPS conferences I have discovered a new Net Promoter success story of startling originality. Last year it was Travel Counsellors, an entrepreneurial company that followed the principles of NPS and has now grown to more than 1000 travel agents in an otherwise moribund industry. Travel Counsellors will play a major role in my next book. The company’s successful application of NPS has already influenced dozens of Bain and Satmetrix clients.

 

Of particular interest at the upcoming conference will be the presentation by Virgin Media CEO Neil Berkett, who will explain how his company managed to increase its Net Promoter Score by 20 points, resulting in a 30% decrease in customer churn rates. One step that Virgin took to enable this progress was to begin ridding themselves of bad profits. Unfair fees and charges run rampant in the phone/internet/TV industry, and I will be very curious to know how Virgin managed to kick the historic addiction to these unseemly practices (referred to by many customers by various names for cow, horse, and chicken manure).

 

On a personal note, I suspect I will be sending a synopsis of the Virgin story to my own cable TV provider, because this is one company that desperately needs help in building customer loyalty. Despite major investments designed to improve customer service, it continues to wallow in bad-profit practices.  For example, it charges ridiculously high “list” prices to customers unless they are sufficiently diligent to request whatever package price is in their best interest. I noticed not long ago that my bill had increased by 35%, but I was too busy at the time to dig into the reasons. When I finally got around to calling customer service, the rep explained that my package rate had expired. All I had to do was ask for the current package rate and I would reduce my fees by over 40% this time (but no, the amount I had been overcharged during the previous past six months would not be refunded—sorry).

 

The frustrating part of this story is that my cable provider seems genuinely interested in improving its tarnished reputation. The company is hiring good people, training them, and providing them with sophisticated tools. But then it puts those employees in humiliating situations, where they have to explain and justify pricing policies that are abusive, manipulative, and dishonest. As you might expect, the company’s strategy to improve customer loyalty is not working. It remains mired at the bottom of the most-respected company rankings.

 

Virgin Media will be explaining in London how it managed to eradicate historic industry practices designed to extract maximum value from customers whatever the cost in diminished goodwill (of both customers and employees). Virgin’s NPS program absorbed feedback from customers and front line employees, identified the policies that most frequently inspired manure metaphors, and buried them.  Maybe that explains why Virgin has risen to the top of the growth charts.

 

Find out more by joining me in London.

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