Welcome, Guest Login Register
loading...
Net Promoter Community > Richard's and Laura's Blog > 2008 > October
 

Can You Hear Me Now?

Posted by RichardOwen Oct 16, 2008

Verizon gets it.

 

We all understand that the wireless telecom business (and for that matter all forms of the telecoms business) is brutally competitive. Not every firm is taking the same path to address these challenges, but it's worth reflecting on some of the lessons from Verizon's focus on NPS.

 

First, I can't comment on the other US telecom companies and their approach, I haven't seen any good information. We did see a presentation from one of Verizon's biggest domestic competitors that suggested they have been fighting an internal battle over the definition of the "perfect metric". In this instance, the evidence seemed to point to the management team voting in a metric that was less "volatile" than NPS (i.e. less risk to bonus payouts). Regardless of the merit to shareholders or customers of this approach, it has to warm the hearts of Verizon staff everywhere to believe that a rival is spending it's time focused on an internal research conflict while they have been getting on with the business of creating promoters. And they have been getting on with it.

 

A panel of front line Verizon staff made a perfect case for the Net Promoter discipline. This group, drawn from sales, customer support and local management of contact centers and retails stores, waxed lyrically about the impact Net Promoter has had on their jobs:

 

"We ARE NPS"  - it's how the company represents itself to the world.

 

"75% of issues have turned out to be resolvable on closed loop action"

 

"Customer first has become a way of life -- and NPS the essential tool"

 

"Management has demonstrated a willingness to take clear action based on customer feedback. That motivates employees and delights customers"

 

"Positive comments are shared and become a huge motivator"

 

"An effective mechanism for coaching my team and being coached"

 

The focus here has clearly been on getting front line staff engaged with the program and integrated with the culture of the organization. Now, I know the skeptics amongst you are probably thinking this was all for show, but I'm thinking otherwise. The most amazing thing about the presentation was the convincing sincerity of the staff. So what's the lesson here? In a similar fashion to what we learned in Rome, while some companies choose to fight internal battles over research metrics, others get on with creating promoters in the field -- where it matters. Judge for yourself who the winners are likely to be.

 

We asked one member of the sales team "would you fight to keep the NPS program? What part of it would you fight for?"

 

"All of it"

 

P.S. I did my friends at Bain a disservice by not mentioning this event was their NPS Loyalty Forum. It's an executive group that shares best practices around NPS programs, includes Fred Reichheld and is both unique and highly valuable.

... more >>
2 Comments Permalink

Fans of the economists Gary Becker and Richard Posner have no doubt been glued to their blog during the current banking crisis. But one set of comments caught my eye.

 

 

"The fourth [factor behind the crisis] was the difficulty of 'selling' a conservative business strategy to shareholders in a bubble environment. Borrowing more and more at low interest rates while home or other asset values are rising enables financial institutions to make higher profits, and a firm that refuses to jump on the bandwagon will as a result experience lower profits and will have difficulty convincing shareholders that they really are better off because the higher profits of the competing firms are unsustainable."

 

 

Temporal economics bites again. It's equally difficult to persuade management to ignore bad profits when "everyone else is doing it" and the short term economics are attractive. For example? In a booming economy where demand for your goods is high relative to supply, why worry about long term loyalty?

 

From a different (and perhaps obtuse) angle: would you quibble with me that earnings from inflated mortgages are bad profits? They don't look like good profits (or any kind of profits for that matter) right now. And while their NPS is not published, do you think that a firm genuinely committed to creating long term promoters from their customers would sell you a product they knew had a high risk of financial harm for you?

 

 

I would argue it's all part of a pattern of management decision making. You be the judge.

... more >>
1 Comments Permalink

Last week in Rome, the descriptively titled "2nd  Optimising the Customer Experience Forum" featured a strong lineup of around 70 customer experience directors, who promptly turned the conference into a discussion forum for NPS in Europe. The shape of the discussion was pretty interesting as it tells us something of the state of the nation for Net Promoter.

 

 

Love it or hate it, Net Promoter is ubiquitous. Remember, this wasn't a conference on NPS - but it still featured as a topic in a full three out of every four presentations. If it wasn't part of the presentation, it was almost always part of the debate in Q&A.

 

 

We had always worked on the theory that UK+ Northern Europe (I love it that we Brits have a habit of seeing ourselves as separate from northern Europe) was a faster adopter than Southern or Eastern. That's still true, but by far less of a margin than we had originally thought. Large corporations in Italy (Telecom Italia), Eastern Europe and even the Middle East (Emirates airline) were getting in on the act.

 

But what was really interesting was the nature of the debate.

 

 

The NPS debate is still about the metric. Which is a shame in many ways as it's almost certainly not going to convince anyone on either side. In addition, it misses the central point of Net Promoter which is about the process, or the discipline behind it.

 

 

Here are the arguments we heard, pro and con.

 

 

PRO-NPS folk typically focused on the outcomes they believed they were getting. "It works in our business". The degree of perfection around the metric itself seems less important to them (the debate is not relevant to their decisions) because it's secondary to other factors, such as ease of internal communication or implementation. Ultimately, getting results from their program was the deciding factor. The role of these people in their organizations were often concerned with operational improvements.

 

ANTI-NPS people throught the metric to be too simplistic, and made the case that there are better (more sophisticated) models out there. Generally they perceive "baskets" of metrics to be more stable and a better predictor of their business outcomes. Frequently, these people have roles that require them to focus on data analytics and their job is to provide insight into customer issues and strategic change.

 

Of course, this is a generalization and simplification, but you probably get the overall sense of the discussion.

 

 

So I restate my original objection: who is being convinced by this discussion? Companies are not challenged around customer experience improvement because they have not been successful designing the perfect metric. It's that very focus that is letting them down.

 

 

Choosing Net Promoter and failing to implement the broad range of process improvements required for success is misplaced energy. If choosing a simple metric like NPS enables you to focus your energy on driving adoption and creating change in your organization, then it's working for you. If you think you can accomplish the same outcomes with more complex solutions, then good for you.... stick with what's working.

... more >>
0 Comments Permalink

OK, so this title is misleading. Actually, Home Depot came out on top of the rankings for the CMO council's audit of customer experience. What's interesting is what it tells you about companies that didn't do so well.

 

 

First the good news. The study looked at "accuracy, uniformity and timeliness of information delivery across the customer touchpoints and content sources of 25 major brands selected randomly across multiple market sectors". I don't think the study aspires to be the definitive guide to customer experience given that brief, and the co-sponsor of the study was Interwoven who makes a tidy living from content management, so my usual warnings around checking who pays for the data applies. Having said all that, the study does make an interesting point or two.

 

 

The winners included Home Depot, Marriott, Southwest Airlines, American Airlines, Allstate and Dell. Less successful were DirectTV, Major League Soccer, JetBlue, Enterprise Rent-a-Car, MTV and Comcast.

 

 

The authors made the point that performance in this kind of study can significantly effect the NPS of these firms and hence long term growth prospects. No doubt. However, this is just one lens through which customer experience is influenced. Just because American is strong at providing information doesn't mean they would have good customer experience if, say, the information they were providing was about all their flights being delayed or cancelled.

 

 

However, I do think this points to the fact that being outstanding at information delivery to customers is both a valuable contributor to NPS and also relatively "low hanging fruit". It's just got to to be easier to fix your communication with customers than, say, fixing your entire business model for flying people from point A to point B. And you do get an important good guy from it.

 

 

It's interesting (to me at least) that the companies that won focused on being able to deliver their brand message (you can do it, we can help - Home Depot) through their medium consistently and clearly. Put in simple language, customers were able to resolve their informational requirements easily. Whereas, on the other end of the study, it's darn near impossible to figure out solutions to simple and obvious problems.

 

 

On a personal note, I just can't get my Dell/Vista machine to stay stable. I just can't get straightforward answers to simple questions from Microsoft's site - which has a wealth of information but never seems to be able to answer the question I have. I guess that's what this study is all about.

 

 

There was another significant observation of the study that resonated with me. The degree to which call center operations seperated the winners and losers jumped out from the study. Mess up on the call center and lose your customers was basically the message. Ah, the carbon element (people) once again trumps the silicon element of the equation. With a possible recession in the US, it will be interesting to see how many companies run off the ledge with major cutbacks in call center operations killing their NPS numbers.

 

 

Check out the full study here.

... more >>
0 Comments Permalink
Richard Owen's and Laura Brooks' Blog

loading...

Actions